The accumulated quantum of loan disbursements by NBFCs and MFIs at the quarter-end in September 2020 stood at Rs.10,617 crore. In comparison, the average loan amount disbursed to each account in the second quarter of FY2021 was Rs.32,912, noting a 20% increase on the same from the previous financial year.
The prominence of NBFCs in India’s lending market can be primarily attributed to the loan terms they offer. The availability of a suite of financial products has also played a pivotal role here.
Personal loan from NBFCs is one of the most popular products, in this regard. The financial product is equipped with a host of customer-friendly benefits that allow individuals to meet an array of requirements.
Features of personal loan
Here are some prominent features of a personal loan from NBFC –
- Collateral free
Being an unsecured financial product, it does not require individuals to submit any collateral to avail it. Since there is very little verification involved, it shortens the loan application process and saves time. Therefore, once the loan application gets approved and verified, individuals can receive funds within 24 hours*.
- Lenient eligibility and documentation
One of the most prominent features of an NBFC sourced personal loan is that the associated eligibility norms and documentation are not stringent like traditional lending institutions. Typically, they ask for a healthy CIBIL score and regular income along with the submission of KYC details and income proof.
- No end-use restrictions
Personal loans do not come with any usage restrictions. Hence, one can use it to manage an array of financial requirements such as –
- Medical emergency
- Higher education
- Personal expenses
- Home renovation
- Debt consolidation
- Significant loan quantum
Personal loans extend a significant sum, and its value varies from one lender to another. Paired with its quick disbursal, this financial product enables individuals to meet any requirement without delay.
- Flexibility in repayment
Furthermore, personal loans are equipped with a flexible repayment tenor, and methods. Thus, paying off the debt is not a hassle for individuals. Also, borrowers can calculate their personal loan EMIs beforehand, to help them plan the process beforehand.
Apart from these, the availability of online services has allowed individuals to get personal loan without leaving home, further increasing its convenience.
Leading NBFCs like Bajaj Finserv allow its customers to complete the entire personal loan application process online. Borrowers can easily get funds up to Rs.25 lakh from the comfort of their homes.
Moreover, the pre-approved offers extended by Bajaj Finserv further increases the convenience of borrowers. They streamline the application process further, and individuals can skip documentation altogether. This offer is available on other financial products like credit cards, business loans, etc. Applicants can check their pre-approved offer by submitting essential contact details.
Availing a personal loan from NBFC is not a hassle. However, one needs to keep in mind some pointers before making this application to ensure a knowledgeable decision.
- Interest rate: Personal loan interest rate is one of the most prominent factors to consider here. Since interest payment constitutes a large portion of loan repayment, considering this rate beforehand is essential.
- Associated charges: Every loan application includes a host of additional charges like processing fees, foreclosure charges, etc. It is ideal to factor in these expenses, as they can drive up the total cost of borrowing.
- Fine print: It is imperative to read the fine print before you apply for a personal loan to make an informed decision. Every loan agreement includes various clauses, and borrowers must be aware of them to avoid complications in the future.
The above-mentioned benefits, along with the easy to meet eligibility criteria, make personal loan from NBFCs a convenient financial product to avail of. Moreover, individuals can learn about a particular product in detail before they avail it.