A large number of people in India avail personal loans when they are in need of immediate financing. Personal loans can be procured with relative ease thanks to minimal documentation and quick disbursal. Whether you seek finances to meet wedding-related expenses, sponsoring your child’s education, paying off credit card bills, or any other reason, personal loans are the most convenient form of credit.
NBFCs, or Non-Banking Finance Companies, as they are known in their extended form, have become a crucial component of the financial system in India. They are directly supervised by the Reserve Bank of India, while a subsidiary of the Reserve Bank, National Housing Bank, regulates the Housing Finance Companies. A significant part of the personal loans market is made up of personal loans by NBFCs. Moreover, personal loans have been a big source of revenue for NBFCs in the country.
Considering the ever-increasing demand for personal loans in India, NBFCs have designed personal loans in a manner such that they meet the requirements of a diverse customer base. Here is a list of the top personal loans by NBFCs:
Bajaj Finserv Limited
Bajaj Finserv Limited is a part of the Bajaj Group (Bajaj Holdings and Investments Limited). The registered office of the company is located in Pune, and it employs over 20,000 individuals across 1,400 locations in India. Bajaj Finserv Limited is one of the most aggressive companies so far as the personal loan segment in the country is concerned. Around 25 lakh customers have availed personal loans from Bajaj Finserv Limited, and the amount borrowed can be used to meet a variety of financial needs ranging from home renovation to medical expenses, weddings to honeymoons and so on and so forth.
One of the main reasons why Bajaj Finserv Limited has established itself as a dominant player in the Indian personal loan segment is its aggressive use of technology for better customer service. Pretty much the whole personal loan application process is online and the turnaround time is among the shortest in the industry. Right from the submission of documents to the eligibility checks and the calculation of EMIs are done online. Customers can also track their transactions online and enjoy impeccable servicing thanks to Bajaj Finserv’s use of technology.
Mahindra and Mahindra Financial Services Limited
Established in 1991, Mahindra and Mahindra Financial Services Limited has more than 1,000 branches in addition to a customer base with more than 4 million people across India. Mahindra and Mahindra Financial Services Limited is among India’s most popular and respected organisations. It has two affiliates that offer rural housing financial services and insurance services. It also offers vehicle advances, gold advances, home credits, corporate advances, working capital advances, etc. to its customers. Personal loans from Mahindra and Mahindra Financial Services Limited can be availed at competitive interest rates.
Muthoot Finance Limited
The first NBFC in India, Muthoot Finance Limited can trace its origins all the way back to 1888. Having commenced operations as a small lender in a Keralite village, the company offers personal loans only if gold ornaments are pledged by the customer. It is the biggest and best in the gold loan finance market in India, and apart from financing gold transactions, the company also offers money transfers, wealth management services, foreign exchange services and much more. Branches of Muthoot Finance Limited also sell gold coins. The headquarters of Muthoot Finance Limited is located in Kerala, and the company has more than 4,500 branches across India. Muthoot Housing Finance (India) Limited, the parent company of Muthoot Finance Limited, also offers home loans.
HDB Financial Services
HDFC Bank, the largest private sector bank in India, operates HDB Financial Services. It provides a multitude of personal loan solutions, be it secured or unsecured, and has over 1,000 branches across India. HDB Financial Services offers personal loans, business loans, auto loans, doctor’s loans, gold loans, consumer durables loans, car loans, tractor loans, equipment loans, construction equipment loans, and new to credit loans. HDB Financial Services is regarded as India’s quickest growing NBFC, and personal loans from the company can be availed at attractive interest rates and flexible tenures.
Tata Capital Financial Services Ltd.
One of the leading NBFCs in India, Tata Capital Financial Services Limited was incorporated in 2007 and is a subsidiary of Tata Sons Limited. Tata Capital Financial Services Ltd. considers itself as one of India’s best one-stop financial services provider as it caters to the requirements of institutional, retail, and corporate customers across businesses. Tata Capital Financial Services Ltd. is registered with the Reserve Bank of India as ‘Systematically Important Non-Deposit Accepting Non-Banking Financial Company’. It offers a variety of products to businesses, families, and individuals in the form of commercial finance, wealth management, infrastructure finance, consumer loans, and marketing and distribution of Tata Cards.
Interest Rates and Processing Fees
Personal loans from NBFCs can be availed for interest rates that are usually slightly higher in comparison with the interest rates offered by banks. Generally, the interest rates applicable on personal loans by NBFCs range from 10.99% to 24% per annum based on the borrower’s credit profile. Individuals with high credit scores can avail personal loans from NBFCs at lower interest rates, while those with poor credit scores will be charged higher rates of interest. Similarly, interest rates for self-employed borrowers are usually higher than the interest rates charged to salaried employees.
At the time of sanctioning the loans, NBFCs charge a processing fee which could range from 0.25% to 3% of the amount borrowed.
Tenure of Personal Loans by NBFCs
The minimum tenure for personal loans offered by NBFCs is 12 months, while the maximum is usually 60 months. However, certain NBFCs such as Tata Capital provide longer tenures that extend up to 72 months. The tenure of the loan will determine the EMIs applicable to your loan. Prepayment of personal loans will attract a penalty which could range from 1% to 4%.
Documents Required for Personal Loans by NBFCs
When you apply for a personal loan from an NBFC, these are the documents you will be required to submit:
- ID proof and proof of residence:PAN Card, Voter ID, driving license or Aadhaar Card, electricity and telephone bills, license and lease agreement, property tax receipt, society maintenance bill, etc.
- Income proof:Form 16/ITR Copy and salary slips
When you choose to go for a personal loan from an NBFC, click here to compare as many lenders as possible in order to find the solution that best suits your requirements.