Advantages of Availing Property Loan with NBFCsPosted by Rahul Kumar on February 28th, 2020
Financial crunches necessitate for immediate solutions. Loan against property is a viable and secured option for obtaining credit. Unlike the unsecured loan options of personal loans (where interest rates range from 11% to 24% ), the property wagered for property loan acts as the security. Hence the interest rates are generally lower. NBFC platforms such as Fullerton India provides property loans at interest rates starting from 9%. Nonetheless, as borrowers, we are often caught in the tango between banks and NBFCs on which would serve as a better lender. Devised below is a compilation that lists out the advantages of choosing an NBFC for a property loan. 1. Competitive Interest Rates Interest rates are the necessary sieve that we borrowers adopt to segregate lenders that synchronizes best with our goals. Recognizing this necessity, many NBFCs have lowered their interest rates to values either equal to the bank rates or lower than that. Lower interest rates have resulted in lower EMIs (Equated Monthly Instalments), thus making it more affordable. However, the interest rates are dependent on the credit history, income of the applicant. Applicants can compare the interest rates and EMIs of various lenders using a loan against property EMI calculator to determine the best scheme. These calculators are free for use and provided by most of the lenders online. 2. Faster Processing Time A loan against property is sought in the direst situation when financial requirements should be immediate. With hassle-free and quicker handling, the loans are sanctioned faster in NBFCs compared to banks. 3. Less Stringency The NBFCs are monitored under the Company Act. Hence the rules and regulations are less stringent compared to banks. Therefore with satisfactory credit score and income, borrowers can obtain loans easier and faster in NBFCs. 4. Loan Availability for Individuals With a Lower Rating Banks often hesitate to sanction loans with lower credit ratings. Any individual with a credit rating less than 600-650 will find it difficult to obtain loan from banks, as they are often reviewed as high-risk profiles. However, NBFCs offer loans with the flexibility to individuals with lower credit rating also. However, the interest rates are dependent on the credit score and income of the applicant. 5. Minimal Documentation The supporting documentation required during loan submission is minimal in NBFCs when compared to banks. Hence there is a higher approval ratio in NBFCs when compared to banks. 6. Faster Disbursements With respect to the points mentioned above, one can conclude that the loan disbursal is quicker in NBFCs when compared to banks. Thus surmising,
Final Thoughts Choosing between a bank or NBFC for a property loan is influenced by the personal concerns of the individual. in a very immediate situation approaching an NBFC would serve as a feasible option because of its quick disbursal. Individuals are, however, recommended to do a quality analysis between various interest rates and lenders using loan against property loan calculators before making an informed decision. These calculators also help applicants in calculating the EMI that would be required to pay under each scheme. Thus individuals can choose plans and lenders that harmonize with their financial appetites. Like it? Share it! |
