NBFC Home Loans: Complete List, Interest Rates and How to Apply
With more NBFCs or Non-Banking Financial Companies launching loan apps, it has become easier for potential homebuyers to apply for loans. Still, there are apprehensions among people, especially when it comes to choosing between a traditional bank and an NBFC. Read this blog to know whether you should consider an NBFC home loan offer.
5 Best NBFCs for Home Loans in 2023
The following table will give you a comprehensible idea about the 5 best NBFCs for a home loan in India in 2023 along with their interest rates and loan repayment tenure:
| NBFC | Maximum loan amount* | Interest rates* |
| Navi | Up to ₹5 Crore | 8.60% onwards |
| PNB Housing Finance Ltd. | Up to 75% on loans above Rs. 75 lakh | 8.50% onwards |
| Tata Capital | Up to ₹5 Crore | 8.95% onwards |
| Indiabulls | ₹5 Crore | 9.30% onwards |
| LIC Housing Finance | Up to ₹15 Crore | 8.65% onwards |
5 Top NBFC for Home Loans – Detailed Overview
Need an instant home loan, not in weeks but in minutes? Then, Navi Home Loan is your answer. Navi has made the entire loan journey paperless, meaning from loan application to approval, everything will happen on the Navi App itself. As it is a secured loan, you will have to pledge your home as collateral. You can conveniently repay the loan in fixed monthly installments. Here are some other important details:
- Interest Rate for Salaried Employees: 8.60% p.a. onwards
- Interest Rate for Self-employed People: 8.60% p.a. onwards
- Eligibility Criteria:
- Indian resident
- Salaried or self-employed
- Aged between 25 and 62 years
- Processing Fee: Nil
- Loan Tenure: Up to 30 years
- Foreclosure Charges: Nil
2. PNB Housing Finance Ltd.
There’s a saying that a dream home is never that far away when you have the right home loan. To buy, rebuild, or renovate a home, PNB Home Loan could be an option worth considering, with which you can get up to 90% of your property’s value. Based on your eligibility, you can get a low-cost, low-interest loan, which fits your budget perfectly. Some other interesting details are:
- Interest Rate for Salaried Employees: 8.50% p.a. onwards
- Interest Rate for Self-employed People: 8.55% p.a. onwards
- Eligibility Criteria:
- 21 years or more at the time of applying
- Age not more than 70 years at the time of loan maturity
- Minimum monthly salary or income of at least ₹15,000
- A CIBIL score of at least 611
- 3+ years of business continuity for self-employed or work experience for salaried
- Processing Fee: 1% of the loan amount
- Loan Tenure: Up to 30 years or till the borrower turns 70
- Foreclosure Charges: Nil
3. Tata Capital
Want to own your dream home without any further delay? You could consider a home loan from Tata Capital to meet your capital needs. Taking out a mortgage on your home from Tata Capital is convenient because each offer is taylor-made based on your housing needs. The lender boasts of quick and easy processing, minimum documentation, and fast approval. Here are some more details:
- Interest Rate for Salaried Employees: 8.95% p.a. onwards
- Interest Rate for Self-employed People: 8.95% p.a. onwards
- Eligibility Criteria:
- At least 24 years at the time of application
- No more than 65 years at the time of completion of the loan
- Salaried or self-employed
- A CIBIL score of 750 or more
- Processing Fee: 0.5% of the loan amount + applicable taxes
- Loan Tenure: Up to 30 years
- Foreclosure Charges: Nil, subject to certain conditions
4. Indiabulls
Indiabulls gives you the option to choose your home from among 10,000+ pre-approved properties across multiple cities in India. Not just this. You can make your search for your dream home easier with the IB Home Finder feature, which gives instant access to information about 4 Lakh+ properties. The lender also claims to make your home buying process as seamless as possible by making the entire lending process digital, the documentation simple, and the approval and disbursal quick. Here are some other interesting details about the loan:
- Interest Rate for Salaried Employees: 9.30% p.a. onwards
- Interest Rate for Self-employed People: 9.30% p.a. onwards
- Eligibility Criteria:
- At least 21 years at the time of application
- No more than 65 years at the time of completion of the loan
- Salaried or self-employed
- Processing Fee: 0.50% onwards
- Loan Tenure: Up to 30 years
- Foreclosure Charges: Nil for individual borrowers
5. LIC Housing Finance
LIC Housing Finance offers home loans to resident as well as non-resident Indians. You could also avail of a loan to buy a plot of land for building your home within 3 years. This NBFC also offers loans for home improvement and renovation among others. You can get a loan of up to 90% of your property value. If you want, you can also get a balance transfer loan to pay off your existing home loan and start a new loan with LIC. Other important details include:
- Interest Rate for Salaried Employees: 8.65% p.a. onwards
- Interest Rate for Self-employed People: 8.65% p.a. onwards
- Eligibility Criteria:
- At least 21 years at the time of application
- No more than 65 years at the time of completion of the loan
- Salaried or self-employed
- Processing Fee: Up to 0.50% onwards
- Loan Tenure: Up to 30 years for salaried employees and up to 25 years for self-employed individuals
- Foreclosure charges: Nil
Also Read
How to Apply for NBFC Home loan?
NBFCs have a very detailed process for home loan applications. To apply for a home loan through an NBFC you have to go through the following procedure:
- Step 1
Visit the website of the NBFC or download their app on your phone, and fill in the home loan application form by providing accurate information and then upload the required documents
- Step 2
Pay the processing fee through your preferred payment method
- Step 3
Wait for the verification and approval status by the NBFC
- Step 4
After you receive the sanction letter, wait for property paper verification
- Step 5
This will be followed by a legal verification, technical check, and site investigation
- Step 6
After successful verification of the above-mentioned details, your loan will be approved through an agreement
- Step 7
The loan will be disbursed in due course
Features of NBFC Home Loans
1. Competitive Interest Rates:
To compete with the low-interest rates offered by traditional banks, NBFCs have also started offering loans at low rates. Today, you can get NBFC home loan interest rate as low as 7.05% p.a. with an NBFC.
2. Can be Obtained with a Low Credit Score:
NBFCs usually don’t follow a stringent loan application and approval process like traditional banks. As a borrower, it’s easier to get a loan with a relatively lower credit score from an NBFC than from banks. However, this may vary from financing company to company and may also affect the NBFC home loan interest rate.
3. Ensures Quick Procedure:
NBFCs are more tech-focused. With the introduction of consumer-friendly apps, taking a home loan has never been this easier. You can experience a hassle-free application process, minimal documentation, and quick loan disbursal with NBFCs.
Benefits of Getting NBFC Home Loans
1. Easy Approval of a Home Loan
NBFCs are more flexible when it comes to approving a home loan. One of the many goals of NBFCs is to offer a customer-friendly, hassle-free loan application process. They are pretty flexible in terms of eligibility and documentation.
2. Minimal Documentation Required
The documentation procedure could be relatively hassle-free in the case of NBFCs. Most NBFCs have resorted to online documentation (for application) and KYC post-pandemic. This also decreases the disbursal time for loans.
3. Increased Loan-to-Value ratio
Every borrower has to pay stamp duty and registration costs for the property for which they are getting a loan. States set their own stamp duty, and usually, borrowers have to cover this cost themselves. While banks fund none of these costs, some NBFCs include some of these additional costs in their loan schemes. This eventually contributes to higher LTVs.
Eligibility Criteria for NBFC Home Loans
The eligibility criteria set by NBFCs differ, but generally, these prerequisites are easy to meet.
- Nationality: One needs to be an Indian citizen to avail of this loan. Some NBFCs may give loans to non-resident Indians as well.
- Age: The age range differs for salaried and self-employed citizens, however, anyone ranging from 23 to 65 years is eligible.
- Employment Status: Only earning citizens can apply for a home loan. Unemployed citizens can apply as co-applicants.
- Work Experience: A salaried employee needs to have a work experience of 3 years. A self-employed individual needs to be in the current business for 5 years.
- Credit Score: NBFCs usually look for a credit score above 750. Those with lesser credit scores can still apply, but the interest rates will be higher for them.
Documents Required to Apply for NBFC Home Loans
NBFCs ask for minimal documents to make the application process hassle-free. You will be required to present the following general documents:
- Identity proof: PAN card, passport, Aadhar card, driving license.
- Address proof: residence agreement, ration card, electricity bill, Voter ID, Passport.
- Passport size photograph.
- Bank statement of last 6 months for salaried employees and salary slip of last 3 months.
- Business details like practice license, income tax returns, business registration proof etc., for self-employed individuals.
- A filled-up home loan form with details about the cost of the property.
- Property documents, such as sale deed or transfer of ownership.
How to Avail NBFC Home Loans at Low-Interest Rates?
The following factors will affect your home loan interest rates. By taking care of these factors you will be able to avail of NBFC home loan at low-interest rates:
1. Credit Score
Maintaining a high credit score will have some advantages over your home loan interest rates. Many lenders provide lower interest rates if the borrowers have a credit score that is over 750.
2. Down Payment
The more the amount of the down payment, the lower the interest rate. Generally, any down payment of more than 20% of the property value will help you get a lower interest rate.
3. Repayment tenure
Generally shorter repayment tenure has a lower interest rate. The more you drag the tenure the higher interest you will have to pay.
Banks Vs NBFCs: Which one to Choose for Home Loans?
When it comes to home loans, it is debatable whether to choose a bank or an NBFC. It depends on the financial situation of the borrower and the terms and conditions of the lender that one is choosing.
As we have seen, it is easier to get a loan approved by an NBFC than to get it sanctioned by a bank. There are many other benefits that you can avail of from an NBFC while getting a home loan which is otherwise not provided by banks. So, one should consider the interest rate, repayment tenure, offers available, loan charges, etc. to compare and choose between the available options.
Factors You Should Consider before Obtaining NBFC Home Loans
- The eligibility criteria and documentation process is devised to suit every customer. But this does not mean that everyone qualifies for obtaining NBFC home loans. Knowing the requirements of the process beforehand is important before applying.
- Traditionally, the interest rates charged by NBFCs were on the higher side. However, with RBI taking the decision to regulate them via average base rates, new borrowers can pay much lower interest rates. Thus, while choosing which lender to avail a loan from, make sure to compare the interest rates.
- When choosing a scheme, a borrower should analyse their financial goals and capabilities. A wrong scheme can hamper your repayment plan. If you are unable to repay the loan in the specified tenure, your credit score will decrease. This can hinder any loan you might want to take in the future.
Final Word
NBFC home loans are designed to fulfil every borrower’s dream of buying a house. NBFCs home loans often come with benefits, such as hassle-free loan application process, instant approval, and quick disbursal. Moreover, the entire process is usually paperless.
The Navi Home Loan, for example, is accessible, affordable, and fully digital. What’s better is that it has no processing fee, simple KYC process, and end-to-end customer support, wherever necessary. Give it a try and know for yourself!
FAQs
No, they are not the same thing. Housing finance companies (HFCs) are NBFCs that provide financial aid to people only for housing-related purposes.
In 2020, RBI allowed NBFCs to co-lend with banks. This co-lending arrangement is made to improve underserved sectors of Indian society. This allows registered NBFCs to borrow from RBI, but only with banks.
A borrower should analyse many factors before obtaining a home loan like interest rates, eligibility criteria, processing time etc. However, the option about which scheme is better is subjective and varies according to the financial capabilities of individuals.
Generally, home loans are given to individuals above the age of 23. But few NBFCs make special provisions for 18-year-olds to get these loans.
There are two types of home loan interest rates offered by NBFCs- fixed and floating interest rates.
If you compare fixed and floating interest rates offered by NBFCs, fixed interest rates are always 1%-2.% higher than the floating interest rates. Floating interest rates usually prove to be more beneficial than the fixed interest rate.
Home loan interest rates as offered by NBFCs are not influenced by RBI and usually depend on the Prime Lending Rate. The borrower can further negotiate with the lender to get a suitable interest rate.
Before you go…
Are you looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to ₹5 crore. Install the Navi app now and get instant in-principle approval right away! Interest rates starting at 8.60% p.a.
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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