CRISIL estimates that unsecured loans from non-banks (except government non-banks) are expected to increase at a CAGR of 25% in FY 2020-21. The earlier estimate was 6 to 8%, the lowest in the last decade.
Non-banking financial companies (NBFCs) have been exceptional in this market owing to customised offerings, broader reach, robust risk management, co-lending agreements, and a dynamic digital presence.
Borrowers prefer an NBFC loan compared to a bank loan owing to benefits originating from these reasons
Some typical advantages of availing a personal loan from an NBFC are:
Borrowers do not have to comply with a long list of eligibility criteria when they apply with NBFCs. The primary parameter that these lenders consider is the credit score. Applicants need a minimum CIBIL score of 750 to receive approval.
Individuals with low credit scores can also apply if they have a substantial income and sound career portfolio.
Alongside credit score, other requirements for an NBFC loan are:
The eligibility criteria for personal loans from banks by contrast remain quite stringent, especially for self-employed applicants.
Existing or pre-approved customers do not need to submit any documents when applying for a personal loan with an NBFC.
For new customers, the documents required are limited to OVDs for KYC, bank account statements, and latest salary slips.
In the case of banks, both existing and new customers may have to comply with a lengthy paperwork requirement. These lenders may also require additional documents from self-employed applicants.
Pre-approved customers can receive loan approval within a few minutes of applying with the best NBFC for a personal loan.
NBFCs can process an application within one working day after approval. Borrowers can, thus, receive the money in their account in under 24 hours with select non-banking financial companies.
Quick disbursal time has made a personal loan from non-banking financial institutions one of the ideal financing options for urgent funding needs such as medical emergencies. In 2019, people availed of personal loans the most to address healthcare expenses and purchase consumer durable goods.
The disbursal time for a personal loan from banks can extend anywhere between a few days to a few weeks.
Bajaj Finserv offers an entirely online and paperless application process. Customers only have to provide their basic details such as name, phone number, and city to initiate the procedure.
In contrast, an online loan application process is still not available from several banks. This makes it all the more difficult as borrowers must visit a bank branch and apply manually.
Last, but not the least, NBFCs have a superior customer service that can be relied on by customers. These lending companies usually assign a customer relationship manager ready to assist a borrower before and after the application or sanctioning of an NBFC loan.
On the other hand, such services with banks, especially those in the public sector, remain less customer-centric.
For all these reasons, choosing an NBFC loan company is always a better option. A borrower can also avail of an instant loan of higher quantum from a non-banking financial company (based on his/her eligibility) as compared to a bank. Apply for your personal loan with Bajaj Finserv to enjoy such attractive features and benefits against nominal interest rates.