Top 10 NBFCs for Home Loans in India

Non-Banking Financial Companies (NBFCs) have emerged as significant players in the housing loan sector. Unlike banks, NBFCs are not governed by the same regulations as banks, allowing them more flexibility in their operations. This flexibility often translates into competitive interest rates and more lenient eligibility criteria.

In this article, we will look at some of the most popular NBFCs for home loans.

List of Top 10 NBFCs for Home Loans

Here is a list of the top NBFCs for home loans:

HDFC Ltd.

As one of the largest housing finance companies in India, HDFC Ltd. offers a wide range of home loan products with competitive interest rates and flexible repayment options.

LIC Housing Finance

Backed by the Life Insurance Corporation of India, LIC Housing Finance offers various home loan schemes, including loans for construction, purchase, and renovation.

Bajaj Finserv

Bajaj Finserv provides home loans with minimal documentation and flexible tenures, making it an ideal choice for borrowers seeking convenience and speed.

PNB Housing Finance

A subsidiary of Punjab National Bank, PNB Housing Finance offers a range of home loan products.

Sammaan Capital Limited

Formerly known as Indiabulls Housing Finance Limited, Sammaan Capital Limited is a mortgage-focused non-banking financial company.

Cholamandalam Investment and Finance Company

Part of the Murugappa Group, Cholamandalam offers home loans with flexible terms and competitive interest rates. It focuses on providing financial solutions to underserved segments.

Tata Capital Housing Finance

Tata Capital Housing Finance Limited is a subsidiary of Tata Capital Limited and is registered with the National Housing Bank as a Housing Finance Company. It offers long-term funds for housing purposes with attractive interest rates and flexible repayment options. 

Aditya Birla Housing Finance

Aditya Birla Housing Finance Limited is a subsidiary of Aditya Birla Capital Limited. It is a fast-growing housing finance company that is registered with the National Housing Board as a non-deposit-accepting housing finance company.

ICICI Home Finance

A subsidiary of ICICI Bank, ICICI Home Finance offers a variety of home loan products. The company provides a range of home loans and home improvement loans, office premises loans, home equity loans, and loans against property.

L&T Finance

L&T Finance, part of the Larsen & Toubro Group, provides a complete financial solution for homeowners. They offer home decor finance, dedicated relationship managers, and a digitized process.

Pros and Cons of Taking Home Loans from NBFCs

Here are the pros and cons to consider while taking home loans from NBFCs:

Pros

• Easier qualification for diverse income sources: NBFCs often have more lenient lending criteria. This makes it easier for self-employed people or those with non-traditional income streams to qualify for a home loan.

• Faster loan processing than traditional banks: The loan approval process at NBFCs is usually quicker than that of conventional banks.

• Tailored loan solutions for specific needs: NBFCs often provide customized loan products made for the specific needs of customers.

• Strong presence in semi-urban and rural areas: With a strong presence in semi-urban and rural areas, NBFCs make financial services more accessible to those who may not have easy access to traditional banks.

• Simplified application process: The documentation requirements for NBFC home loans are usually not as stringent as those of traditional banks.

• Competitive interest rates: NBFCs may offer competitive interest rates, which can be appealing to borrowers looking for affordable financing options. These rates can sometimes be lower than those offered by traditional banks.

Cons

• Lower regulatory scrutiny compared to banks: NBFCs are not subject to the same level of regulatory oversight as banks, which can pose risks in terms of financial stability and consumer protection.

• Inconsistent loan terms and conditions: The terms and conditions of loans from NBFCs can vary significantly.

• Fewer financial products than banks: Although NBFCs offer customized products, they may not have the same breadth of financial products and services as traditional banks.

• Risk of undisclosed charges: There is a potential risk of hidden fees or charges that may not be immediately apparent in the loan agreement.

• Stricter policies affecting creditworthiness: Some NBFCs may have stricter policies regarding credit score impacts, which could affect a borrower's creditworthiness if not managed properly.

Conclusion

Non-Banking Financial Companies have carved a niche in the home loan sector in India, offering a viable alternative to traditional banks. Their flexibility in operations, competitive interest rates, and customized loan solutions make them an attractive option for borrowers.

While NBFCs offer several advantages, such as faster loan processing and simplified application procedures, potential borrowers must also be aware of the associated risks. These include lower regulatory scrutiny, the possibility of inconsistent loan terms, and the risk of undisclosed charges.

You can choose a trusted NBFC for your housing financial needs through Moneyview. Home loans from Moneyview’s lending partners start at 8.50% per annum. To know more, visit our website or download the Moneyview app now.