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What is NBFC?

NBFC in India stands for Non-Banking Financial Company. This is the NBFC full form in banking. They are financial institutions, similar to banks, that can provide loans and other forms of credit. However, there are several significant differences between NBFC and banks.

Unanticipated expenditures may develop at any time. Having access to dependable financial instruments is essential for managing these circumstances. In such cases, NBFC loans can represent a perfect solution.

NBFC offers loans ranging from Rs. 10,000 to Rs. 3 lakh. They provide a broader range of loan amounts, from modest sums for unexpected needs to more significant amounts for home improvements or debt consolidation. People frequently utilize NBFC loans for medical crises, wedding expenditures, travel, and even starting a small company.

Loan Features

Borrowers may find NBFC loans appealing due to their range of services. The following are some crucial factors to think about:

  • NBFCs frequently shorten the application procedure to expedite loan approvals.
  • NBFCs provide more flexible repayment choices.
  • NBFCs are more accepting of borrowers with variable credit scores.
  • There are more options for loan amounts offered by NBFCs.

Eligibility Criteria

Eligibility criteria for NBFCs are generally less strict; this is the main difference between NBFCs and banks. Here’s a breakdown of some common factors NBFCs consider when evaluating loan applications:

  • You must be 21-45 years old.
  • You must be a resident of India.
  • Both salaried and self-employed individuals are eligible.
  • Salaried applicants typically need a minimum monthly salary of Rs. 12,000.
  • Required documents include:
    • Aadhar card
    • PAN card
    • Bank statements
    • Salary slips
    • Recent photographs

Steps to Apply NBFC Loan

Instamoney is operated by Innofin Solutions Pvt. Ltd., an RBI-registered NBFC-P2P., offers a convenient and user-friendly mobile app to streamline the application process. To get you started, follow this step-by-step guide:

  1. Download the InstaMoney App from Google Play.
  2. Open the app after installation and start the account creation process.
  3. Enter your phone number and get it verified through an OTP.
  4. You can also log in by connecting your Google account.
  5. Next, enter your PAN number. Add other details such as your name, date of birth, and pin codes.
  6. Select your preferred language.
  7. Next, enter your professional details, such as employment type and company name.
  8. Finally, enter your loan requirement details. Submit the application.
  9. Once you have entered the details and the verification process is completed, your loan will be approved. The amount will be disbursed to your account within a few hours of approval.

Bank Vs. NBFC Personal Loan

Before applying, you should understand the fundamental distinctions between banks and NBFC in India. Here’s a breakdown to help you decide which is the best option for your situation:

CriteriaBank Personal LoanNBFC Personal Loan
Approval TimeTypically longer application process and approval time.Often faster approval times due to streamlined processes.
Interest RatesGenerally offer lower interest rates.Interest rates can be higher.
DocumentationGenerally requires more documentation for verification purposes.Requires less documentation compared to banks.
FlexibilityLoan terms might be less flexible with regard to repayment options or interest rates.Can offer more flexible repayment options.
Customer ServiceExtensive branch networks offering face-to-face customer service.Customer service may be primarily app-based or online.
Eligibility CriteriaGenerally stricter eligibility criteria, especially for credit score requirements.Eligibility criteria can be more relaxed, considering a wider range of credit scores, including NBFC personal loans for bad credits.
Processing FeesProcessing fees might be lower compared to NBFCs.Processing fees can vary, but it’s important to factor them into your overall loan cost.
Repayment OptionsRepayment options may be more standardized.May offer more flexible repayment options.
Loan Amount RangeMay offer larger loan amounts, especially for established borrowers.Loan amounts can vary, but NBFCs might cater to smaller loan needs as well.

Still trying to decide whether an NBFC loan app is right for you? Don’t hesitate to download the InstaMoney app and explore our loan options.

Who Should Take an NBFC Loan?

Loans from NBFCs are a helpful instrument for a range of people and circumstances. Let’s see who may profit the most from an NBFC personal loan:

  • NBFC loans are appropriate for those with an average credit score.
  • People searching for a quick loan will welcome the simplified application process, which is speedier than traditional banks.
  • NBFCs serve individuals seeking lower loan amounts for specialized purposes.
  • Those who want a more straightforward application procedure might utilize NBFC mobile apps.

Suitable Loan Purposes

NBFC loans may be a valuable tool for a range of applications. Here are some of the most popular ways people use NBFC loans to enhance their lives:

  • Unexpected expenses such as medical bills may strain anyone’s finances. An NBFC loan app can assist cover these expenses and reduce the stress of a medical emergency.
  • As a young professional with a good credit score, you’ll need a couple of lakhs for a used scooter/bike down payment. An NBFC loan with flexible repayment options may be appropriate.
  • As a self-employed individual needing new business equipment, an NBFC loan in India may provide more understanding and flexibility.
  • NBFC loans help you fund a dream vacation or invest in your education or professional skill development.

Key Considerations Before Applying

Prepare for a good loan experience by carefully examining these criteria.

  1. NBFCs are flexible regarding credit ratings; however, a strong score might result in a reduced interest rate. Check your credit report and make any necessary corrections before applying for a loan.
  2. Make sure you can pay the loan installments by reviewing your income and spending plan.
  3. Read and comprehend the loan conditions, which include the interest rate, processing costs, payback period, and prepayment penalties.
  4. Compare loan alternatives and interest rates from several NBFCs. The InstaMoney app allows you to pre-qualify and view tailored rates without damaging your credit score.
  5. To prevent paying extra interest, borrow only the amount you need for your specific purpose.
  6. When asking for a loan, be open and honest about your financial condition to guarantee you acquire one that meets your needs.

FAQ

How does credit scoring affect NBFC loan approval?

Credit scoring plays a crucial role in determining loan eligibility and interest rates. Higher scores typically result in better terms and higher chances of approval.

How long does it take to process an NBFC loan application?

Processing times vary but usually range from a few hours to a couple of days, depending on the complexity of the application and documentation.

Can I acquire an NBFC personal loan despite my poor credit?

NBFCs provide personal loans for individuals with lower credit scores. Interest rates and loan amounts may be higher for those with lower credit scores than those with good credit.

What is the usual range of interest rates that are available for personal loans?

Interest rates for NBFC personal loans generally range from 12% to 24% per annum, depending on factors like credit score, loan amount, and repayment tenure.

Whether you’re facing an unexpected expense, planning a dream vacation, or looking to invest in your future, an NBFC loan from InstaMoney could be the solution you’ve been waiting for.

Download the InstaMoney app today!