Month: June 2024

Gone are the days of rummaging through paperwork and waiting in long queues for a personal loan. In today’s digital India, paperless personal loans are revolutionizing the way we access funds. But what exactly are they, and how can they benefit you? Let’s dive in!

Fast Money, Fewer Forms: 

What is an Instant Paperless Loan?

It’s a type of loan offered by many lenders that doesn’t require you to provide hard copies of your documents. They are usually called instant paperless loans because they are quick and don’t involve paperwork.

An instant paperless loan is a type of personal loan where the entire application and approval process happens online, eliminating the need for physical documents. Imagine needing urgent cash for a medical emergency or a sudden car repair. With an instant paperless loan, you can apply from your phone or laptop, upload scanned copies of required documents, and potentially receive approval within minutes – all without stepping out the door. 

How Does a Paperless Loan Work?

The process is remarkably streamlined. Here’s a breakdown:

1. Apply Online: Head to the lender’s website or mobile app and fill out the online application form. This typically includes information about your income, employment, and loan amount.

2. Digital Documents: Instead of submitting physical copies, you’ll upload scanned versions of documents like your PAN card, ID proof, address proof, and income proof (bank statements or salary slips). Some lenders might use eKYC (electronic Know Your Customer) through Aadhaar for faster verification.

3. Credit Check & Approval: The lender will assess your credit score and other factors to determine your eligibility and loan terms.  

4. E-Signing and Disbursal: Once approved, you’ll receive a loan agreement and electronically sign it.  The approved loan amount will be directly transferred to your bank account.

Also, Read: Need 30,000 Rupees Loan Urgently In a Day

Benefits of Paperless Personal Loans: 

Here’s why a paperless personal loan might be the perfect solution for your financial needs:

1. Speed and Convenience: Apply anytime, anywhere, from your phone or computer. No more branch visits or lengthy paperwork! 

2. Faster Approvals: The digital process allows for quicker evaluation, potentially leading to same-day approvals for qualified borrowers.

3. Minimal Documentation: No need to collect and submit physical documents – a breeze for those who value organization!

4. Environmentally Friendly: Say goodbye to paper trails! Paperless loans contribute to a greener future.

Eligibility Requirements for Paperless Personal Loans:

Although the eligibility criteria for paperless loans vary from lender to lender. But here are some of the basic eligibility criteria lenders usually follow:

1. Must be an Indian resident possessing a valid PAN card.

2. The minimum age requirement is 21 years (subject to change based on the lender).

3. Applicant should be either salaried or self-employed, meeting specific minimum income criteria.

4. Requires a favorable credit score, favorably above 700.

Interest Rates and Charges On Paperless Personal Loan: What to Keep in Mind

While paperless loans offer convenience, it’s crucial to understand the associated costs. Interest rates on paperless loans can vary depending on the lender, your credit score, and the loan amount.  There might also be processing fees, which could be a flat fee or a percentage of the loan amount. Below is the list of top lenders in India, with the interest rates they offer:

How Can I Get An Instant Paperless Personal Loan?

Previously, obtaining a loan swiftly and without paperwork was nearly impossible for many. However, technological advancements have transformed this process. To apply for a paperless personal loan, consider the following general steps, though keep in mind that the specifics may differ from one lender to another.

Also, Read: I Need 1000 Rupees Loan Urgently

Steps To Apply For A Paperless Personal Loan: 

1. Choose Your Lender: Research and select a reputable lender offering paperless personal loans.

2. Check Eligibility: Ensure you meet the lender’s criteria (age, income, credit score).

3. Apply Online: Fill out the online application form with accurate information.

4. Upload Documents: Upload scanned copies of the required documents.

5. Await Approval: The lender will review your application and credit score.

6. E-sign and Receive Funds: Once approved, electronically sign the loan agreement and receive the loan amount directly in your bank account.

Important Considerations Before You Apply For Paperless Personal Loan

• Compare Offers: Don’t settle for the first option. Research and compare interest rates, processing fees, and repayment terms offered by different lenders. 
• Read the Fine Print:  Understand all loan terms and conditions before signing the agreement. 
• Borrow Responsibly: A personal loan is a financial commitment. Only borrow what you can comfortably repay within the stipulated timeframe.

Emerging Trends: The Future of Paperless Personal Loans

The future of paperless loans is bright, with trends like:

• Instant Approvals: Advanced data analytics might lead to even faster loan approvals based on a combination of traditional and alternative data sources.
• Focus on Mobile: Expect a seamless mobile app experience for applying, managing, and repaying your loan.

Paperless personal loans offer a convenient and efficient way to access funds in India. By understanding the process, considering the costs, and comparing offers, you can leverage this financial tool to meet your needs. Remember, responsible borrowing is key. So, research, compare, and choose the best option to get the financial boost you need delivered straight to your bank account!

We hope you liked this blog on paperless personal loans. Do you have any questions or thoughts on this topic? Share them in the comments section below – we’d love to hear from you!

Also, Read: How to Get 20,000 Loan Without Documents?

FAQs:

1. What is the Procedure for Securing A Loan Without the Need for Bank Statements And Salary Proofs?

Here are the steps to apply for a personal loan without needing to provide bank statements:

• Engage with a lender you already have a relationship with to increase your chances of approval and potentially negotiate better interest rates.
• Keep your Fixed Obligation to Income Ratio (FOIR) below 50%.
• Strive to achieve a credit score of 700 or above.

If you want to know the next steps, read our blog: “Loan without bank statement and salary slips”.

2. What Are the Consequences of Failing to Make A Payment On A Paperless Personal Loan?

Failing to pay an installment on your paperless personal loan could result in a penalty for late payment, and this lapse may adversely affect your credit rating.

3. What is the Duration Required to Get Approval for A Paperless Personal Loan?

The approval time for a paperless personal loan varies depending on the lender and the specificities of their verification procedures. With Credmudra, you can get pre-approved loan offers in just 3 minutes*.

Managing family finances is difficult, especially for housewives without an independent income. Personal loans for housewives are designed to make their lives easier. They serve as a safety net to cover unforeseen expenditures for educational expenses, medical needs, and home businesses. This article will discuss these loans—their pros and cons and features. It will give housewives the knowledge they need to meet their financial needs and the confidence to become financially independent.

What is An Instant Personal Loan for Housewives?

An instant personal loan for housewives is an effective financial lifesaver that ensures hassle-free access to funds for women who perform household tasks without a stable income. Unlike typical loans, which substantially rely on proof of income and a strong credit record for consideration, these loan schemes are specially designed for housewives and have more flexible conditions for approval.

Key Features of Personal Loans for Housewives:

• Quick Approval and Disbursal
• Minimal Documentation
• No Income Proof is Required
• Flexible repayment Terms
• No collateral needed
• Tax benefits

Also, Read: How to Get 20,000 Loan Without Documents?

Features of Personal Loan for Housewives

Learning about these distinctive features will help evaluate whether it suits your specific needs. Here are the key features:

1. Unsecured Loans

This loan does not require applicants to pledge an asset as security.

2. Flexible Loan Amounts

You can decide on the loan amount needed, so there will be no over-borrowing.

3. Competitive Interest Rates

Despite their unsecured nature, these loans provide competitive rates, which make them accessible and affordable.

4. Simplified Application Process

They have a straight-forward application procedure with minimal documentation requirements.

5. Instant Access to Funds

An instant disbursement of money provides financial relief in case of emergencies.

6. Flexible Repayment Terms

The wide range of repayment plans suits different budget levels and individual financial plans.

Benefits of Personal Loan for Housewives

Let’s take a look at the primary advantages of availing a personal loan.

1. Financial Independence 

With these loans, applicants do not need a guarantor to have credit access; therefore, they support and foster financial independence.

2. Emergency Funding

Personal loans for housewives are like a secure safety net for emergent fund requirements for medical emergencies, utility bills, or costs of electronic appliances.

3. Education and Skill Development

Housewives can also use the loan amount for personal growth, such as education and skills training to improve job prospects or launch a business.

4. Debt Consolidation

Merging various debts into a single loan with lower interest rates is a great way to ease financial burden and plan monthly expenses.

5. Flexibility of Use

A personal loan allows you to cover various expenses, such as home repairs, starting a business, or traveling.

6. Predictable Monthly Payments

The fixed rates and repayment terms make interest rate payments predictable, making it easier to plan your budget.

7. Credit Score Improvement

On-time repayment will build a healthy credit history, a prerequisite for further small business loans.

Also, Read: How to Get Rs 3 Lakh Loan Without Documents?

Risks and Drawbacks of Personal Loans for Housewives

Even though personal loans for housewives bring many benefits, they have some disadvantages as well. Knowing these aspects assists in the process of decision-making as well as loan management. Here are some of the main risks and drawbacks:

1. Debt Burden

Having too much debt can be overwhelming, especially when you have the responsibility of managing household expenses.

2. High-Interest Rates

Collateral-free personal loans usually have higher interest rates.

3. Impact on Credit Score

Loan mismanagement or failure to pay EMIs on time will lower the borrower’s credit score and impact the probability of getting approved for loans in the future.

4. Limited Loan Amounts

Maximum loan amounts can be lower compared to loans secured with collateral and may not be enough to cover all expenses.

5. Potential for Financial Mismanagement

Quick access to funds often results in overspending.

6. Dependency on Loans

Frequent overspending through loans, especially for daily expenses, can land you in a vicious circle of debt.

7. Fees and Penalties

Extra costs like processing fees, prepayment penalties, and late payment charges can add to the loan amount.

Eligibility Criteria for Personal Loan for Housewives

Here is the standard eligibility criteria that housewives need to meet to secure a personal loan:

• Age Limit

The applicant must be between 21 and 60 years of age

• Credit History 

A clean credit record or minimum credit score (between 750-800) may be needed

• Bank Account

The collection of funds necessitates an active bank account under the applicant’s name

• Alternative Income Proof

For those without a salaried job, proof of alternative income, such as a spouse’s or side income, may be required

• Other Financial Assessments

A lender may conduct a financial assessment, including a review of the applicant’s debt situation and general economic condition, to ensure that the applicant can repay the loan

Documents Required for Personal Loan for Housewives

• Proof of Identity: A government-issued ID (such as a passport, driving license, voter ID, or Aadhar card)
• Proof of Residence: Utility bills, lease agreements, or Government IDs with current address on them
• Bank Statements: The most recent statements, for financial behavior evaluation
• Income Proof of Spouse or Guarantor: If the applicant’s wage does not meet the minimum requirement, a guarantor’s salary slips and tax returns may be required
• Proof of Alternate Income: Documentation for side incomes such as rental or part-time earnings

How Do You Apply for a Personal Loan for a Housewife?

Applying for a personal loan as a housewife entails the following steps:

1. Research Potential Lenders

• • Compare various lenders, like banks, NBFCs, and online lenders
  • Comparing interest rates, loan duration, fees, and other features

2. Check Eligibility Requirements

• • Ensure you fulfill the lender’s specific eligibility criteria

3. Prepare Necessary Documentation

• • Collect the necessary documents like ID card, address proof, proof of income, and bank statements

4. Fill out the Application Form

• • Fill out the application form on the lender’s website or in a branch
  • Validate the details and vital information to  ensure there are no errors

5. Submit the Application

• • Apply online or at the branch

6. Loan Processing and Approval

• • The lender will check your application, confirm the documents submitted, and conduct a credit check
  • Additional information/documentation may be asked for, if required

7. Loan Offer and Acceptance

• • If approved, the lender offers terms including amount, interest rate, and repayment terms
  • Carefully go through the offer and accept if you agree to the terms and conditions

8. Disbursal of Funds

• • Once the contract is in place, you get the money deposited into your bank account
  • The payment is typically released within a few days after the acceptance

9. Repayment

• • Plan the repayment according to the schedule that has been agreed
  • Consider automatic payments to avoid penalties

Interest Rates & Charges on Personal Loans for Housewives

Understanding the interest rates and additional charges is a crucial part of planning your finances so that the loan repayment does not impact your budget. Here’s a detailed look at what to expect:

Interest Rates

• Variability: It depends on the lender, your credit rating, and whether there is additional risk, with interest rates as low as 10% to a high of 25% annually
• Fixed vs. Variable Rates: Select between fixed rates for affordability or variable rates for potential initial savings

Additional Charges and Fees

• Processing Fee: It is generally 1% to 3% of the loan amount to cover administrative expenses
• Prepayment Penalty: Some lenders may charge a prepayment penalty if you repay the loan ahead of the due date to compensate for the estimated interest
• Late Payment Fees: Delayed payments incur fees and can harm your credit score
• Other Charges: There may be additional fees, such as a charge for canceling the loan or making amendments to the agreement

Personal loans for housewives provide a flexible means of handling financial problems in the absence of a steady income. They grant you the freedom to invest in yourself, handle crises, or start a business. However, it’s essential to approach these loans with a clear understanding of their benefits and risks. 

Also, Read: I Need 20,000 Rupees Loan Urgently!

FAQs

1. Can Housewives with No Individual Income Apply for A Personal Loan?

Yes, they can get a loan from a bank that offers personal loans designed for housewives. A lender may ask for a co-applicant, like a spouse, or will look at other aspects such as a source of income or a guarantor for creditworthiness.

2. Is it Mandatory to Float Collateral for Personal Loans for Housewives?

In most cases, personal loans for housewives are unsecured, so they do not require any collateral. This simplifies the borrowing process for those who may not have significant assets.

3. How Long Does the Approval Process Usually take for Personal Loans for Housewives?

The loan process differs for individual lenders, but personal loans for housewives are usually designed for fastest processing. After all the documents are submitted, approval could take 24 hours to 2-3 days.

4. Can Personal Loans for Housewives be Used for Any Reason?

Indeed, one of the most vital points of personal loans for housewives is their versatility. This money can be used for a wide range of purposes, such as education, medical bills, home renovation, or setting up a small enterprise.

5. How Can Housewives Improve their Chances of Getting Approved for A Personal Loan?

Housewives can improve their loan approval chances by including a co-applicant with a steady income, ensuring all documents are complete and accurate, keeping a good credit score, and providing a sound financial history.

6. Are There Any Alternatives to Personal Loans for Housewives?

Yes, alternatives for housewives to personal loans are secured loans against assets like gold or property, loans against fixed deposits, credit from cooperative banks or local lending circles, and financial help from non-profit organisations that focus on women’s empowerment.

Life in India can be full of unexpected turns. Whether it is for a medical emergency, home renovation, educational pursuit, or even a dream vacation, a Rs. 2 lakh loan can be a helpful financial tool to bridge the gap and achieve your goals.

But here’s the thing: while the idea of a quick and easy 2 lakh loan might sound appealing, it’s crucial to understand the realities involved. This blog will explore the different options available for obtaining a 2 lakh loan without documents in India, focusing on responsible and transparent lenders. We’ll debunk the myth of the “no-document” loan and explore alternative solutions that fit your needs.

Thesis Statement: While truly document-free loans are uncommon, there are alternative options to secure a Rs. 2 lakh loan that can be more transparent and secure.

Understanding Loan Approvals On 2 Lakh Loan Without Documents

Financial institutions rely on documents like income proof (salary slips or bank statements) and identification (PAN card, Aadhaar) to assess your creditworthiness. This helps them determine your ability to repay the loan. Another crucial factor is your credit score, a numerical representation of your past borrowing behavior and repayment history. A good credit score indicates a lower risk for lenders, making loan approval more likely and potentially offering better interest rates and EMIs (Equated Monthly Installments).

Also, Read: Need 30,000 Rupees Loan Urgently In a Day

Types of Loans Without Documents

When searching for a 2 Lakh Personal Loan without income documentation, you will encounter various options such as:

1. Collateral-Based Loans

Typically, personal loans are unsecured and do not need collateral. Lenders assess your eligibility through factors like income, debt-to-income ratio, and credit score. However, lacking proof of income, you might offer collateral as security. This gives lenders the confidence to extend credit, knowing they can recover funds through asset foreclosure in case of default.

2. Co-Applicant Loans

Without proof of income, adding a co-applicant with solid financial standing could be advantageous. The co-applicant’s involvement decreases the risk for the lender, facilitating loan approval.

3. Credit Score-Based Loans

Many lenders prioritize credit history over income verification. A strong credit record reflects your reliability and commitment to repay debts.

4. Government Schemes and Grants

Various schemes and grants provided by the Indian government aim to broaden access to financing with minimal documentation and straightforward eligibility criteria. These are particularly useful if you lack proof of income.

Features of a 2 Lakh Loan:

• Streamlined Process

The process of applying for and approving a personal loan online is straightforward and does not involve extensive paperwork.

• Simple Eligibility Requirements

Anyone between the ages of 21 to 60 who is steadily employed, whether in a salaried or self-employed capacity, can qualify for the loan.

• Fast Loan Processing

Once all eligibility conditions are met and the loan application is thoroughly reviewed, the loan amount is deposited into your bank account typically within 24 hours.

• Competitive Interest Rates

Interest rates for personal loans range from 11.99% to a maximum of 23.99%, applicable to both salaried and self-employed borrowers.

• Adjustable Repayment Schedule

Loan repayment periods vary from 12 to 60 months, offering flexibility in managing the repayment amount and schedule. You can use Credmudra’s free EMI calculator to calculate your monthly payments.

Advantages Of 2 Lakh Loan Without Documents:

1. Simplified application process.

2. Quicker approval due to fewer documentation needs.

3. Unsecured loans up to 2 Lakhs are available without the need for a guarantor or collateral.

4. Freedom to use the loan for any legal purposes.

5. Direct deposit of funds into the bank account eliminates the need for physical checks or drafts.

But before you take up any step, it is important to understand the disadvantages of it as well:

Disadvantages Of 2 Lakh Loan Without Documents:

1. Higher interest rates due to increased lending risk.

2. Different documentation may be required to assess financial stability.

3. Loan amounts may be limited based on individual creditworthiness.

4. Shorter repayment periods may be required to ensure prompt return of funds.

5. A high credit score is necessary to demonstrate responsible financial behavior.

Also, Read: How to Get Rs 3 Lakh Loan Without Documents?

Concept of Interest Rate On 2 Lakh Loan:

The interest rate is the cost you pay to borrow money. It’s a percentage of the loan amount charged by the lender for the privilege of using their money. The higher the interest rate, the more you’ll pay overall for the loan. Below is a table of lenders and the interest rate they offer on personal loans.

How To Apply for a 2 Lakh Loan Online?

As previously mentioned, the application process of applying for a 2 lakh rupees loan is simple. Continue reading to know the full detailed steps:

Steps To Apply For 2 Lakh Loan:

1. Start the Application: Go to the online application portal and input your mobile number.

2. Complete the Form: Fill in your personal details as prompted.

3. Employment Information: If you are employed on a salary, specify this.

4. Bank Details: Provide the necessary bank account information.

5. Upload Documents: Submit all required digital documents.

6. Submit and Check Eligibility: Click “Submit” to process your application and immediately receive information about your eligibility.

7. Verification Process: A customer service representative will contact you for additional verification.

8. Receive Funds: Once approved, the loan amount will be deposited into your account within 24 hours or the next business day.

Concept of EMI (Equated Monthly Installment) On 2 Lakh Loan Without Documents:

EMI is the fixed monthly payment you make towards repaying the loan. It combines both the principal amount (original loan amount) and the interest accrued over the repayment period.

The formula used to calculate EMI is:

EMI = P x R x (1+R)^N / ((1+R)^N – 1)

Here’s a breakdown of the variables:

EMI: This represents the Equated Monthly Installment amount you’ll pay towards the loan.

P: This stands for the Principal Loan Amount (the total amount you borrow). In our example, this would be Rs. 2,00,000.

R: This represents the Monthly Interest Rate. To calculate this, you’d need to divide the annual interest rate by the number of months in a year. For example, if the annual interest rate is 18%, the monthly interest rate would be 18% / 12 months = 1.5% (converted into a decimal).

N: This represents the Loan Tenure in Months (the total duration of the loan).

The EMI for a personal loan of Rs. 2 lakh with an 18% interest rate for tenures ranging from 1 to 5 years:

Responsible lenders require documents for a valid reason – it protects both you and the lender. Consider exploring the alternative options mentioned above, such as minimum documentation loans, secured loans, or co-signer loans. Remember to compare interest rates, EMIs, and repayment terms offered by different lenders before making a decision. Loan comparison tools can help you streamline this process. You can opt for Credmudra, as we match you with your right lender, based on your requirements in 3 minutes*.

Improving your credit score can significantly benefit future loan applications. Here are some tips:

Tips For Getting A 2 Lakh Loan without Documents:

To successfully get a 2 Lakh loan without documents, consider these strategies:

1. Researching Lenders and Financial Institutions

It’s crucial to research institutions that offer loans without income documents. Evaluate the eligibility conditions and documentation requirements of various lenders to find the best fit for your needs and repayment ability.

2. Preparing Necessary Documentation

While you may not need to provide income proof, other documents such as identification, residency proof, and tax returns might be requested. Prepare these documents in advance to expedite the lending process.

3. Negotiating Loan Terms and Conditions

You can negotiate terms with lenders even without income proof by demonstrating a strong financial position through adequate income, a high credit score, and minimal financial commitments.

4. Presenting a Convincing Case to Lenders

When applying for a loan without salary slips, convincingly demonstrate your financial stability and responsible credit behavior to gain lender confidence. Provide a compelling reason for the absence of income proof and bolster your case with evidence of credibility.

5. Seeking Professional Assistance

Engaging a professional loan advisor can be beneficial. They can help organize necessary documents to substantiate your income claims and present your case effectively to lenders.

• Make timely payments on existing debts (credit cards, bills).
• Maintain a low credit card utilization ratio (amount owed divided by credit limit).
• Avoid applying for multiple loans simultaneously.

Disclaimer: This blog is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any financial decisions.
We hope you liked this blog! Let us know your thoughts and feedback in the comments below.

Also, Read: How to Get 20000 Rupees Loan Urgently!

FAQs:

1. What is the Required Credit Score to Get A Personal Loan of 2 Lakhs?

To get a personal loan of 2 lakhs, applicants are typically expected to have a credit score of 650 or above. In addition to a robust credit score, lenders also look for a consistent source of monthly income, a positive history of credit repayment, and compliance with certain age-related criteria.

2. Is it Possible for A Student to Secure A Loan Amounting to 2 Lakhs?

Certainly, a student can be eligible for a loan of 2 Lakhs, provided they have a consistent monthly income of at least Rs 15,000, hold a steady job, and maintain a good credit history. For students who are underage, the loan application may be submitted by their parents or guardians, accompanied by the necessary proof of income.

3. How Long does it Typically take for Lenders to Process A Personal Loan of 2 Lakhs?

The duration required to process a 2 lakh personal loan can differ significantly across financial institutions. While some lenders might offer rapid processing and disbursement within 24 hours, subject to the verification of digital documents, others may take longer due to varying credit evaluation procedures and documentation requirements.

4. How can I Get A 2 Lakh Loan without Income Proof?

Typically, proof of income is required to assess your eligibility and ability to repay the loan. If you lack traditional income proof, providing your bank statements, income tax returns (ITR), and other financial records can serve as sufficient evidence for loan approval.

Ever needed a quick cash boost for an unexpected expense or a dream you want to chase? Personal loans can be a lifesaver, and increasingly, NBFCs (Non-Banking Financial Companies) are becoming popular players in this field. But what exactly are NBFC personal loans, and how do they differ from traditional bank loans? Let’s break it down.

What Is An NBFC Personal Loan?

An NBFC loan is a financial service or credit option offered by a finance company that is regulated and licensed by the RBI. NBFCs are financial entities that provide various financial services and products akin to banks, but they do not hold a banking license. They are essential to the financial system as they extend credit to various economic sectors.

Think of NBFCs as financial institutions that offer various loan products, including personal loans. They’ve become a popular alternative to banks because of their:

5 Benefits Of NBFC Personal Loans

1. Faster Approvals: NBFCs often have streamlined processes, meaning you might get your loan approved quicker than at a bank. Banks generally have more complex internal processes, leading to longer approval times.

2. Flexible Eligibility: They may be more open to borrowers with non-traditional income sources or a less-than-perfect credit score. NBFCs offer straightforward eligibility criteria for personal loans, focusing primarily on your credit score. A CIBIL score of 685 or above usually guarantees quick approval, although those with lower scores can still qualify by demonstrating strong income and a solid career portfolio.

3. Variety of Loan Options: NBFCs offer different types of personal loans, including secured (backed by collateral) and unsecured loans, catering to various needs.

4. Fewer Documentation Needs: For existing or pre-approved customers, NBFCs require no additional documents when applying for a personal loan. New customers only need to provide basic documents like KYC forms, bank statements, and recent salary slips. Banks, however, often require extensive paperwork, including additional documents from self-employed applicants.

5. Fast Loan Processing: NBFCs can process applications and disburse funds within one working day post-approval, making them an excellent option for urgent financial needs. In comparison, banks may take anywhere from a few days to several weeks to process personal loans.

Also, Read: I Need ₹5000 Rupees Loan Urgently: Quick Guide

How Are NBFC Personal Loans Different From Personal Loans Via Banks?

Types of NBFCs in India

Based on Activity:

1. Asset Finance Company (AFC): This type of company focuses on financing physical assets like vehicles, equipment, and industrial machines. At least 60% of its assets and income must come from these activities.

2. Loan Company (LC): Mainly provides loans and advances for various purposes, but does not include activities of an AFC.

3. Mortgage Guarantee Company (MGC): This company specializes in mortgage guarantees, with at least 90% of turnover or income derived from this and a minimum net-owned fund of Rs. 100 crore.

4. Investment Company (IC): Engages primarily in acquiring securities.

5. Infrastructure Finance Company (IFC): Focuses on infrastructure loans, maintaining at least 75% of its total assets in such loans, with specific requirements for funds, credit rating, and capital adequacy ratio.

6. Non-operative Financial Holding Company (NOHFC): Enables promoter groups to establish new banks and holds financial services firms, adhering to regulatory standards.

7. Infrastructure Debt Fund (IDF-NBFC): This fund provides long-term debt to infrastructure projects and issues bonds with a minimum five-year maturity. It is sponsored by Infrastructure Finance Companies.

Based on Deposits:

1. Deposit-Accepting NBFCs: These NBFCs are permitted to accept deposits ranging from 12 to 60 months but cannot take demand deposits. Due to stringent regulations, the number of such NBFCs has been decreasing.

Non-Deposit Accepting NBFCs:

1. NBFC – Factors: Focuses on factoring with significant proportions of its assets and income deriving from this business.

2. Micro-Finance Institution (NBFC- MFI): Provides small loans primarily to low-income rural and semi-urban households, with strict criteria on loan amount, tenure, and usage.

3. Core Investment Company (CIC-ND-SI): Holds a significant portion of its assets in shares and securities of group companies, with stringent conditions on asset management and public fund interactions.

Now that you are aware of the various types of NBFCs, let’s examine the eligibility criteria for getting a loan through them.

Also, Read: I Need 50000 Rupees Loan Urgently

Eligibility Criteria for A Personal Loan Through NBFC

The requirements for a personal loan from an NBFC may differ depending on the lender. Here are some of the basic eligibility requirements:

• Nationality: Must be Indian.
• Age: Between 21 and 80 years. You should be 80 years or younger at the end of the loan term.
• Employment: Must be employed with a public sector, private company, or multinational corporation.
• Credit Score: A CIBIL score of 685 or above.
• Monthly Income: Starts from Rs. 25,001, varying based on the city you reside in.

Required Documents for Applying for a Loan from an NBFC

The documents needed can vary by lender, but  you typically need to submit:

• KYC (Know Your Customer) Documents: Aadhaar card, passport, voter’s ID, driving license, or Letter of National Population Register.
• PAN Card.
• Recent Salary Slips: From the last three months.
• Bank Account Statements: From the last three months.

If you have a bad CIBIL score or have just started the loan journey and want to take a loan through an NBFC, read our blog “NBFC Loans Without CIBIL Score: Your Complete Guide.”

While NBFCs offer several advantages, it’s important to compare them with bank loans:

• Interest Rates: Banks generally offer lower interest rates, especially for individuals with a strong credit history.
• Stability: Banks are considered more stable institutions, which can provide peace of mind for some borrowers.

Choosing the Right NBFC Personal Loan Involves:

1. Researching interest rates and terms offered by different NBFCs.

2. Checking their reputation and customer service.

3. Carefully consider the loan amount, tenure, and interest rate.

Instead of wasting hours on researching, you can opt for Credmudra. We will match you with the right lender, based on your requirements! We also ensure the loan disbursement process is smooth for you, so trust us. 

Points To Remember:

1. Borrow responsibly and only what you can afford to repay.

2. Be aware of hidden charges and understand all loan terms before signing.

3. Building a good credit score can help you qualify for better rates in the future.

NBFC personal loans can be a convenient and accessible option for your financial needs. By understanding their features and comparing them with traditional bank loans, you can make an informed decision and choose the right fit for your situation.

If you liked this blog, let us know your thoughts or experiences in the comments section below!

Also, Read: I Need a 3000 Rupees Loan Urgently

FAQs:

1. Can I Change My Personal Loan?

If you want to switch your loan provider or lower your interest payments, refinancing could be a good option. Before committing to a new lender, ensure that the new loan includes all the features that matter to you.

2. What are the Different Types of NBFCs Registered to RBI?

The different types of Non-Banking Financial Companies (NBFCs) registered under the Reserve Bank of India (RBI) include various categories. These are Asset Finance Companies, Investment Companies, Loan Companies, Infrastructure Finance Companies, Microfinance Institutions, and Systemically Important NBFCs.

3. Why do People Choose NBFCs Over Banks?

People choose NBFCs for personal loans because they are more flexible with loan requirements, process loans faster, and can help people with different credit histories. They provide easy-to-access financial options, making them a popular choice for borrowers.