Home Loan from an NBFC or bank which is better ?
The home loans can be availed from either the banks or the NBFC’s. An individual takes the loans for the fulfillment of the needs of an individual. Due to the sky-rocketing prices, an individual can’t buy a house without loans. The competition for the home loans disbursement is fiercely competitive; thus, the customer is left with wide options for obtaining loans. Different banks charge loans interest rates differently and also the processing fees. The private banks & public sector banks charge lower interest rates, while the co-operative credit society has higher interest rates & the NBFC’s; it varies; some charge very low rates and some very high. The chances of approval of the loans vary according to the type of institution. Some institutions are very rigid in providing loans, while others are liberal in providing the loans. The bank in which the customer may have an account is the most preferred source of obtaining loans by an individual.
The borrower, before obtaining loans, should do a thorough survey of the interest rates being charged and the processing fees being charged by the bank. The data of the interest rates being charged by the bank is visible on the internet. Thus the applicant should avail the loans from the lending institution which charges the lowest interest rates. Also, the terms & conditions should be read before the approval of loans from the bank or an NBFC. The tenure of the loan and the penalty charged by the bank in case of delay or default are also important factors in taking the loans. The private banks & the NBFC’s are amongst the most aggressive lenders for the disbursement of loans, as these institutions are in constant touch with the prospective buyers for the disbursement of loans. Many private banks or NBFC’s are having tie-ups with the private real estate developers for the disbursement of loans at lower interest rates to the borrower. Most of the time, the pre-approved category loans for the houses are available from the private banks or NBFC’s. The customers’ service experience is also very good in the private banks or NBFC’s as these institutions do not want to lose business from the prospective customers, and these private institutions set aggressive targets.
NBFC different from banks:
The NBFC’s are the non-banking finance companies that are into the business of core lending of the financial institutions. The NBFC’s do not provide other core banking services as the banks do.
Benefits of the NBFC’s:
· The sanctioning loan process is quick and fast.
· Flexible terms & conditions.
· Attractive features for the old as well as new customers.
· Better customer services are provided for the customers.
· NBFC’s provide loans at a cheaper rate than banks most of the time.
· NBFC’s are liberal in the approval of the loans of the customer.
· A door-step facility is provided by the NBFC’s for the picking up of documents. Also, after-sales service of door-step cheque collection service is provided for the customers which most of the banks do not provide the facility.
Processing of the Loans
Both the private banks and NBFC’s are quick in the disbursement of the loans to the customers. The approval of the home loans of an individual requires rigorous and thorough checks for lending financial institutions so that the loans should not turn into bad debts. Thus the approval process is fast & quick by the private lending institutions. The NBFC is quick and efficient in providing services to the customers as these lending institutions have no other source of income other than the disbursement of loans. In other cases for the banks, they have multiple sources of income. Thus the NBFC’s are more concerned about the business and thus provide more quick and efficient services to the customers.
The NBFC’s are solely dependent on the disbursement of the loans NBFC should be the customer’s preferred choice. The NBFC provides more efficient service, a liberal approval policy, and better customer satisfaction. While the banks also do charge lower interest rates and have attractive offers on home loans so isn’t