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No one knows when big expenses will arise in life. Be it expensive children’s education, some big household work, a sudden illness, or an auspicious occasion like marriage, money can be needed at any time. If you don’t already have savings or an emergency fund, the first thing we do is look at the bank. Apply for personal loan.
But, the path to bank is not easy. Their terms and conditions are quite strict. There is a detailed scrutiny of the documents, and sometimes the loan application gets rejected just because the documents are not complete or the credit score (CIBIL) is slightly low. In such a situation, when time is critical and money is needed immediately, a feeling of uneasiness arises in the mind.
This is where a big option comes to your rescue..Non-Banking Financial Companies, i.e. NBFCs. These companies have come as a big relief for those people who are not able to get money immediately from the bank. But remember, all that glitters is not gold. As easy as it is to take a loan from NBFCs, there is a big trick hidden in it, which is very important for every customer to understand.
Why does NBFC give loan immediately?
The biggest specialty of NBFCs is that their entire process is much simpler than that of banks. If you are tired of visiting the bank, then these companies can provide you immediate relief.
- Less Documents: Doesn’t require a lot of documents like banks do.
- Fast Processing: Their loan processing time (time to approve the loan) is much less than banks.
- Quick loan on KYC: If your KYC is clear, then the loan can come into your account instantly.
NBFCs are no less than a boon for those whose credit score is slightly low or whose source of income is not as stable as the bank requires. This is a path where money does not get stuck.
The whole game is of interest rate
Here comes the thing on which you need to pay the most attention. NBFCs are undoubtedly giving you loans easily and quickly, but it has to be paid at a high cost.
In simple words, the interest rates of NBFCs are generally higher than that of banks. There are some major NBFCs in the market, which provide personal loans. Their starting rates are like this.
- Tata Capital: Here you can get loan ranging from ₹ 40,000 to ₹ 35 lakh. Interest rates start around 11.50%, but can fluctuate depending on your credit score. Processing fees can also be up to a maximum of 3.5%.
- Bajaj Finance: Their initial interest rate is around 10%. But the final rate depends on the customer’s income, credit score and loan amount.
- Shriram Finance: Here the personal loan starts at an interest rate of 11%, which can change according to the financial profile of the customer.
Keep this one thing in mind
Market experts and financial advisors give a clear opinion that if you are not able to get a loan from a bank or are in a hurry, then NBFCs are a great option. But do not take any decision in haste.
A customer should not only look at the interest rate. They should also keep in mind the total cost of the loan, i.e. processing fee, interest rate, and late payment charges if the EMI is missed. Taking a loan is a responsibility. If you take a loan from NBFC keeping all these things in mind, then not only your needs will be fulfilled, but you will also be saved from future financial pressure.