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.
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|
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:
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:
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:
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:
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:
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:
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
Pay the processing fee through your preferred payment method
Wait for the verification and approval status by the NBFC
After you receive the sanction letter, wait for property paper verification
This will be followed by a legal verification, technical check, and site investigation
After successful verification of the above-mentioned details, your loan will be approved through an agreement
The loan will be disbursed in due course
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.
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.
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.
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.
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.
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.
The eligibility criteria set by NBFCs differ, but generally, these prerequisites are easy to meet.
NBFCs ask for minimal documents to make the application process hassle-free. You will be required to present the following general documents:
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:
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.
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.
Generally shorter repayment tenure has a lower interest rate. The more you drag the tenure the higher interest you will have to pay.
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.
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!
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.
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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|Home Loan Prepayment Calculator||Minimum CIBIL Score For Home Loan||How to Apply for Home Loan|
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