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Why Is An NBFC Personal Loan Better Than Bank Loan

mahindra-finance-author

by Mahindra Finance

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February 5, 2024

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3 mins read

In today's fast-paced world, financial needs can arise at any moment. Whether it's for a medical emergency, home renovation, or a dream vacation, personal loans have become a popular choice for individuals seeking quick and hassle-free financing. When it comes to personal loans, there are two primary options: bank loans and Non-Banking Financial Company (NBFC) loans. While both options have their merits, NBFC personal loans often offer several advantages over traditional bank loans. In this blog post, we will explore why NBFC personal loans are better than bank loans.

1. Flexible Eligibility Criteria:

One of the significant advantages of NBFC personal loans is their flexible eligibility criteria. Banks typically have stringent requirements, including high credit scores, stable employment, and a long credit history. On the other hand, NBFCs are more lenient and consider various factors beyond credit scores, such as income stability, repayment capacity, and even social media presence. This flexibility makes NBFC personal loans accessible to a wider range of individuals, including those with a less-than-perfect credit history.

2. Quick Approval and Disbursement:

Time is of the essence when it comes to financial emergencies. NBFCs understand this and offer quick approval and disbursement of personal loans. Unlike banks, which may take several days or even weeks to process loan applications, NBFCs have streamlined processes that allow for faster approvals. In some cases, NBFCs can disburse the loan amount within 24 to 48 hours of application submission. This speed and efficiency make NBFC personal loans an ideal choice for those in urgent need of funds.

3. Minimal Documentation:

Another advantage of NBFC personal loans is the minimal documentation required. Banks often demand a plethora of documents, including income proof, bank statements, identity proof, address proof, and more. This extensive documentation process can be time-consuming and cumbersome. In contrast, NBFCs have simplified documentation requirements, making the loan application process hassle-free. This convenience is particularly beneficial for individuals who may not have all the necessary documents readily available.

4. Customized Loan Products:

NBFCs are known for their ability to offer customized loan products tailored to individual needs. Unlike banks, which often have rigid loan structures, NBFCs can provide flexible repayment options, competitive interest rates, and personalized loan terms. This flexibility allows borrowers to choose a loan product that aligns with their financial goals and repayment capabilities. Whether it's a short-term loan with higher EMIs or a long-term loan with lower EMIs, NBFCs can cater to diverse borrower preferences.

5. Accessibility for Self-Employed Individuals:

Self-employed individuals often face challenges when it comes to obtaining bank loans. Banks typically prefer salaried individuals with a stable income source. However, NBFCs are more inclusive and consider self-employed individuals for personal loans. They understand the unique financial situations of entrepreneurs, freelancers, and small business owners, making NBFC personal loans a viable option for self-employed individuals who may not meet the strict criteria set by banks.

In conclusion, NBFC personal loans offer several advantages over bank loans. The flexible eligibility criteria, quick approval and disbursement, minimal documentation, customized loan products, and accessibility for self-employed individuals make NBFCs a preferred choice for many borrowers.

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