There are a large number of Housing Loan offers that are currently flooding the market. If you’re considering to buy a home, its better to buy it right now. With so many interest rate brackets to choose from, finding the one that fits your financial needs and budget really won’t be difficult. What you need to be concerned about is your eligibility criteria.
There is also a secondary concern because today, most Indians struggle while deciding between two options. The question stands—Who offers the lowest Home Loan interest rate between Banks and Non-Banking Financial Corporations (NBFCs)?
And the answers might be a little complicated than usual.
The Facts and Figures
As far as the numbers are concerned, it is no doubt that NBFCs have a lot to offer to customers, than banks do. Now when it comes to choosing between the similar services offered by two very different providers, anyone would get confused.
In the last Financial Stability Report from RBI, it is seen that most customers are satisfied with their services from NBFCs, as opposed to banks. There is a 15% increase in customer satisfaction from NBFC services.
When picking between the two providers, it is important that you clearly understand the differences between the two.
Differences between Banks and NBFCs
One of the difference is that these two institutions are managed by two seperate government agencies. While the RBI keeps a checks on the banks, it is the Companies Act that regulates NBFCs. This means it’s easier to get a loan from an NBFC as compared to banks.
NBFCs usually offer all kinds of property loans though there a few that offer car loans, personal loans, education loans, and education loans as well. Banks provide all kinds of loans. No NBFCs offer overdraft facilities. As far as banks are concerned, only a handful few offers overdraft facilities.
When you apply for Home Loan, or any other kind of loan, as a new customer, you can benefit from some of the schemes and offers provided by NBFCs. Whereas banks usually offer discounts only to existing customers.
You might ask—What about interest rates? Well, this is a comparison that you need to make. The interest rates offered by banks and NBFCs are usually comparable as there is a lot of competition in the market.
Both banks and NBFCs offer other facilities such as Home Loan Balance Transfer, and easier repayment tenor options. The final choice rests completely on you.
What Should You Opt For?
When it comes to figures, NBFCs have the higher ground. However, depending on your personal needs and financial standing, you can decide which one best suits your needs.
You’ll find that NBFCs take documentation and eligibility quite lightly, when compared to banks. NBFCs understand that most loan needs are urgent and unpredictable, and by cutting down on the processing time, they attract a lot of people looking for a quick loan. Documents required for Home Loans are minimum when it comes to NBFCs. The procedure in the case of banks is more cumbersome.
Compare interest rates while making the final choice. However, that doesn’t mean that this should be the only factor to consider. Consider processing time, documents required, approval procedure, flexibility in foreclosure and prepayments, and even customer care services as well.
Those looking to get a quick loan and people without a credit history often turn to NBFCs. Things such as credit history and CIBIL score, are important and accurate representation of one’s financial trajectory.
Use a Housing Loan interest calculator to know what is the interest that you need to pay. Maintain a credit score of 750 and above to increase your chances of Home Loan approval. Approach a trusted NBFC to get your Home Loan request approved.
Published by Tranding Stories