Advantages Of Taking Housing Loan From NBFC
If you are looking to apply for a home loan, you may have two options. You can apply for a home loan from the banks or use from the NBFCs (Non-banking financial institutions). To decide about this, you have to consider factors like loan repayment period, processing fee, interest rate, etc.
The advantages of taking a housing loan from NBFCs are –
1. Higher loan quantum
Talking about NBFC’s, this comes with a higher loan, including both stamp duty and the registration cost as a part of the property’s market valuation. For instance, the market value of the property is Rs.50 lakhs. Mr XYZ informs that the average stamp duty charges are 5 per cent of the total market value. In comparison, the average registration charges are 1 per cent of the market value. The total market value of the property becomes Rs.53 lakhs. So if the NBFCs are providing 80% of property market value as a loan, you will get a higher loan quantum. The loan shall be provided at 80% of the total Rs.53 lakhs, which is 42.4 lakh. But in the case of banks. The loan shall be sanctioned as 80 per cent of the Rs.50 lakhs, Rs.40 lakhs.
2. Flexible Interest Rates
If you are looking to apply for a home loan from NBFCs, then you must know about the interest rates applicable on loans, provided by them. In the case of banks, which RBI regulates, their interest rates fluctuate based on changes in the RBI policies. Whereas, in the case of NBFCs, which RBI does not control, one can negotiate with the lender and has the power to decide the interest rate with greater flexibility. This, in turns, depends upon your good credit score.
3. Flexible terms
NBFCs offer you a facility of paperless work while applying for a home loan. This provides a benefit to you over banks where the process involves lengthy paperwork. Companies like Muthoot FinCorp offer you the facility to apply for your home loan online too. The documentation process of NBFCs is also quicker. They have a speedy process when it comes to sanctioning of loan to the buyers. Not only NBFCs are flexible in approving your home loan applications, but they also help to provide you with a home loan at ease despite insufficient income.
4. Eligibility criteria
Talking about housing loans, it holds different criteria in both banks as well as NBFCs. Your housing loan depends upon various factors such as your credit score, the city you live or work, valuation of home you intend to buy, etc. If you have a low credit score in the case of banks, you may not be eligible to apply for the loan. However, the same is not in the case of NBFCs. There is a simple criterion of hallmark NBF’s, which allows you to quickly apply for your home loan. This can be given at a higher interest rate than a nominal rate. Even if your credit score is below 750, you will be still eligible to apply for muthoot home renovation loan. NBFCs have their credit scoring models and come with more advanced parameters to help you arrive at your credit score.
5. Better customer services
Though, both the banks and NBFCs provide you with home loans, but when it comes to dedicated customer services, the NBFCs are considered much more convenient than banks. NBFCs make sure to keep a check on all your loan details, payments, and charges with your online account’s help. They will also assign a customer relationship manager. He/she shall be responsible for attending to all your queries and helps in efficiently managing your loan through the whole process. NBFCs provide cheaper loans at lower interest rates to their customers. They consistently come up with many attractive features and benefits for their customers.
6. Fewer Rules & Regulations
As compared to banks, NBFCs have lesser rules and regulations to follow. This involves easy accessibility of home loan applications and more sanctioning of loans to the borrowers. NBFCs are less stringent when it comes to both paperwork as well as regulations.
So, keeping this information and the facts associated with NBFCs, you may look at the benefits that will help you to decide for your home.