There are a number of differences between the features of an NBFC personal loan and that of a bank as given below -
The eligibility criteria imposed by NBFCs are a lot more flexible as compared to those required by banks. For example, most NBFCs require applicants to fulfill the following eligibility criteria* -
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Should be between 21 years to 57 years
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Should have an income of at least Rs. 13,500 per month
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May lend to self-employed applicants
Banks on the other hand are a lot stricter when it comes to income requirements, especially for those who are self-employed.
* Disclaimer - This information can vary from one lender to another.
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Documentation Requirements
Nobody wants to run from pillar to post trying to get multiple copies of multiple documents. But you might have to do this if you are applying for a personal loan from a bank.
But this is not the case for most NBFCs. The documentation requirement is minimal, sometimes requiring only 3 of the most important ones.
While the processing time required for a loan varies from lender to lender, banks generally take anywhere between a few days to a few weeks. This includes the time required to verify documents, approve the loan application, etc.
On the other hand NBFCs have started providing loans with just a few hours of approval time making this the perfect choice for those looking for instant personal loans. For example, Money View provides loans within 24 hours of loan application approval.
The traditional way of applying for a loan is to visit the lender, fill in the required forms, provide documents, and wait for approval. This process is cumbersome and time consuming. With NBFCs however, the entire process is hassle-free and quick as it is all online.
Your credit score is one of the most important factors that lenders take into consideration. Higher the score, higher is the chance of availing a loan at low interest rates. Most banks require applicants to have a CIBIL score of 750 or above. But when it comes to NBFCs, loans for bad credit are also provided. The credit score requirement is not stringent and even those with relatively lower credit scores can apply for one.
