written by | March 23, 2022

How to Find the Best NBFC Private Finance Loan and What Are Its Benefits?

Why do institutions, firms and businesses opt to borrow money from lenders? It’s all because of the need for money. Lenders ask for certain guarantees while lending money to girls and individuals, but trust is the only thing that matters in some cases. In the second case, interest rates are generally high. 

Any loan is composed of 3 core components: the loan amount’s principal, interest rate and duration (tenure) of the loan payback. NBFC and banks prove to be the most trusted lenders because they are trustworthy and bound with certain government policies. 

Today, numerous NBFC private finance loan lenders are available, but learning the intricacies of such loans is vital before opting for one. The following section covers the intriguing facts about NBFC private finance loans.  

Did you know?

The MSME sector was among the most Covid affected sectors. Hence, the Union Government and Reserve Bank introduced numerous programs to revive activity in this domain. 

Programs by the Union Government and RBI to Revive Activity in MSME Sector

  1. AIFIs enjoyed special refinance facilities, including ₹15,000 crore funds to SIDBI for refinancing the MSME sector.
  2. Emergency Credit Line Guarantee Scheme offering unsecured loans worth ₹3 lakh crore to businesses and MSMEs.
  3. Extension of the one-time loan restructuring scheme to MSMEs without any asset categorisation downgrade.
  4. Permitting bank lending funds to NBFCs (except MFIs) for on-lending to the agriculture sector, housing and MSMEs to be recognised as PSL (priority sector lending).
  5. Permitting bank lending funds to NBFCs (except MFIs) for on-lending to the agriculture sector, housing and MSMEs to be recognised as PSL (priority sector lending).
  6. Introduction of on-tap TLTRO (Targeted Long-Term Repo Operations) in Oct. 2020 for reviving certain sectors, including MSMEs.

You have learned about the interesting facts, next, we have discussed the different types of NBFCs. 

Also Read: SIDBI 59 minute Loan Scheme: 2.19 lakh loans, 81 percent of sanctioned amount disbursed

Different Types of NBFC

There are 8 types of NBFC (Non-Banking Financial Company) we have listed below, which play a vital role in the financial system of India. 

NBFCs can be of the following types:

  1. Investment companies
  2. Infrastructure Finance companies
  3. Asset Finance companies
  4. Loan companies
  5. Housing Finance companies
  6. Mortgage Guarantee companies
  7. Core Investment companies
  8. Micro Finance companies

Best Banks in India Providing Finance Loan

SBI Bridge Home Loan

  1. No prepayment penalty
  2. 0.35% processing fee of the loan amount
  3. Attractive interest rates beginning from 9.50% per annum
  4. No hidden charges
  5. Up to 2 years Loan tenure 

Kotak Mahindra Bank

  1. Processing fee of up to 0.5% of the loan amount
  2. Low-interest rates beginning at 6.50% per annum
  3. Up to 30 years loan tenure 
  4. Balance transfer available with a top-up loan 
  5. No prepayment charges 

Axis Bank Home Loan

  1.  Up to ₹5 crore loan amount 
  2. Low-interest rates beginning from 6.75% per annum
  3. 30 years maximum repayment tenure 
  4. No prepayment/foreclosure charges
  5. 1% processing fee of the loan amount

Canara Bank Housing Loan

  1. 30 years maximum repayment tenure 
  2. Attractive interest rates for women beginning from 6.90% per annum
  3. 0.50% processing fee of the entire loan amount
  4. Zero prepayment charges
  5. Can use funds to buy or construct a flat/house

HDFC Reach Home Loans

  1. Minimum income of ₹2 lakh p.a. and minimal documentation
  2. 30 years maximum repayment tenure 
  3. Add a woman co-owner to enjoy lower interest rates
  4. Amazing rates beginning from 8.75% per annum
  5. 2% processing fee of the loan amount

SBI Home Loan

  1. No hidden charges
  2. 30 years maximum repayment tenure 
  3. Low-interest rates beginning from 6.70% per annum
  4. Women borrowers enjoy interest concession
  5. 100% waiver on processing fee if you apply via the YONO app

SBI Privilege Home Loan

  1. Interest concession on offer when checkoff 
  2. Zero processing fee
  3. Interest rates beginning from 6.75% per annum
  4.  Reduced interest rates for women 
  5. 30 years maximum repayment tenure  

LIC HFL Home Loan

  1. People aging up to 70 years can repay their loans
  2. 15 years maximum repayment tenure 
  3. Fabulous interest rates beginning from 6.90% per annum
  4. Individuals aging above 50 years with a pension scheme but still employed are free to apply
  5. ₹10,000-₹15,000 processing fee range 

HDFC Ltd. Home Loan for Purchase

  1. 30 years maximum repayment tenure 
  2. Interest rates beginning from 6.70% per annum
  3. 0.50% processing fee of the loan amount
  4. EMIs beginning at just ₹646 per lakh
  5. Technical and legal counselling from experts
  6. Special arrangement for Indian army employees via AGIF adjoint partnership 

Axis Bank NRI Home Loan: Best for NRIs

  1. 25 years maximum repayment tenure
  2. Interest rates beginning from 6.90% per annum
  3. Zero foreclosure charges
  4. Minimal processing fee
  5. Quick disbursal with minimal documentation 

Besides all these banks, you can also know which Government Loan Scheme is the best for small businesses.

Best NBFCs in India Offering Personal Loans

So, which private finance company personal loan is the best for you? Let’s know: 

 

NBFC

 

Loan Amount

Interest Rate (p.a.)

Tata Capital

Up to ₹25 lakh

10.99% onwards

Mahindra Finance

Up to ₹3 lakh

As per lender

IFL Finance

Up to ₹2 lakh

24% p.a. onwards

HDB Financial Services

Up to ₹20 lakh

Upto 36%

Aditya Birla Capital

Up to ₹15 lakh

14.00% to 26.00% p.a

So, among all private financing companies, Tata Capital offers the maximum loan limit.

Important Considerations for Lenders Before Applying for Your Loan

Credit Score

The credit score plays a crucial factor in determining whether the lender will accept your request or simply drop it in the beginning. This is especially true about unsecured loans.

Because a credit score is the applicant's credit record, any loan finance company will check the repayment records of the borrower before determining whether the loan-borrower can conveniently pay in time or fall behind on his payments. The approval of a loan is determined by the lender's decision following the evaluation. 

History of Employment and Income

Your annual/monthly income and your employment history play a huge part in loan approval too. The lender will evaluate your earnings and your income stability through a steady and stable employment background. The lender might or might not be convinced that you'll be conveniently paying back the loan. 

Even if you're an independent contractor, the lending institution will assume that your business has been operating well over the last few years and your company's revenue is acceptable. 

Ratio Debt-to-Income

In addition to having a high income, your debt-to-income ratio is also vital. Suppose you earn an average income of around ₹1 Lac per month, and your debt repayment commitments exceed ₹75,000 already. In that case, the loan you plan to take isn't available to you because you'll require the remaining funds to cover your expenses for your home. 

Thus, regardless of your earnings, you should maintain a low ratio of debt: income to ensure that lenders believe that you have sufficient cash available each month to the family's expenses and pay back the monthly repayments.

Collateral

Based on the collateral amount you've provided and its value in the current market, the lender will figure out the rate of interest of your loan. By providing collateral, you increase the loan's security from the lender's perspective. It leads to a lower loan interest rate and greater trust. Unsecured loans are notorious because you pay a higher interest rate than various other loans.

Down Payment

The money you've saved and the successful implementation of your savings plan to pay for a downpayment will boost the lender's trust. The larger amount you pay as a deposit, the less the loans must be met.

Also Read: What is Emergency Credit Line Guarantee Scheme (ECLGS)

Advantages and Features of Loans

  1. Numerous loans can be grouped as per various aspects.
  2. You can opt for the sort of loan you plan to avail of per your requirements/eligibility.
  3. The lender decides on the guidelines of the Reserve Bank of India.
  4.  Repayment period / Interest rate will be included with each loan.
  5. The lender has the final authority to decide the loan amount they plan to offer you, considering a range of factors like income, paying ability and many more.
  6. Many lenders offer instant loans that can take a few minutes/hours to disburse.
  7. A third-party assurance can be substituted for security in certain situations.
  8. The lender determines the requirements for security.
  9. There could be the option of part or full prepayment.
  10. The loan repayments must be paid in EMIs over the decided period.
  11. Certain types of loans and lenders might impose an interest rate for the early payment of loans.

You have learned about the features and advantages of loans. Below we have summarised this article so that you don't miss any detail.

Conclusion

We explained the various ins and outs of the NBFC private finance loans. Availing these loans brings many advantages, reaping which, you can very well mend your financial status. On top of that, repaying tenures and interest rates are very satisfying in many cases. 

So, you can approach your chosen loan financing company now!

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.Let's discuss the important questions and answers about the finance loan.

FAQs

Q: What maximum personal loan amount can be borrowed?

Ans:

The max loan amount varies with time and from bank to bank. It can even be in crores.

Q: What's the minimum interest rate available concerning a personal loan?

Ans:

6.75% per annum is the minimum interest rate available currently.

Q: What's the age range available to avail a private finance loan?

Ans:

A private finance loan is 100% applicable for all ages between 21-76 years, and that's a huge bracket, though. The 21 years minimum limit is applicable with all banks, while SBI is the only one welcoming 76 years old applicants.

Q: What can maximum repayment tenure be available for me?

Ans:

The maximum repayment tenure available is 7 years (84 months). 'SBI Personal Loan for Pensioners' offers this lengthy loan tenure.

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