When trying to secure a loan against property, there are two main routes you can take: approaching a traditional bank or turning to a Non-Banking Financial Company (NBFC). While banks have been the traditional go-to for loans, NBFCs are a compelling alternative.
NBFCs are known for their quick, efficient, customer-centric services. Let’s explore why NBFCs can be a better choice for securing a loan against property.
What are NBFCs?
Non-Banking Financial Companies (NBFCs) are financial institutions that offer you various financial and banking services. However, unlike banks they do not accept your deposits or open accounts under your name.
NBFCs can provide a wide range of financial services including loans for homes, vehicles, businesses, investment solutions and wealth management services. NBFCs are fully regulated under the regulatory framework of the Reserve Bank of India. This framework ensures that they maintain transparency and reliability.
In many situations NBFCs are considered to be better than traditional public and private banks. This is because they offer flexible, efficient and tailored services. They usually have easier loan approvals, faster processes, and customisable terms for their services.
What is an NBFC loan against property?
An NBFC loan against property is a type of loan where you borrow money from a Non-Banking Financial Company by offering your property as collateral. This loan can be used for any personal or business need, like expanding your business, funding your child's education, or covering medical expenses.
The amount you can borrow as loan against property depends on the property’s value. You can usually secure large amounts with this loan without having to sell your property. Some features of NBFC loan against property include:
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1. You can secure a significant amount of money, often up to 60-70% of the property's current market value. This could be an amount ranging from Rs 5 lakhs to Rs 5 crore.
2. Interest rates are very competitive and start at 10.10%.
3. You get flexible repayment terms with a loan tenure ranging from 12 to 120 months.
4. You can use residential or commercial properties to secure a loan.
5. An NBFC loan against property is one of the most flexible loans you can avail as you can use it for any purpose.
Why choose NBFCs for loan against property?
When considering a loan against property, opting for a Non-Banking Financial Company (NBFC) can be a smart choice. This can offer you a range of benefits that can improve your overall financial well-being. The benefits of NBFC loan against property include:
1. High loan amounts
Firstly, NBFCs are known for offering higher loan amounts than traditional private banks. This means you can secure a large sum of money against your property. Whether you need funds for business expansion, education, medical emergencies, or any large-scale investment, NBFCs ensure you get the financial backing you require.
2. Convenient process
NBFCs specialise in making the loan process hassle-free and convenient. Unlike traditional banks, where the loan application process can be cumbersome and time-consuming, NBFCs streamline the process. You can initiate your loan application online, submit documents digitally, and even get pre-approved offers. This digital approach saves you time and reduces stress when applying for a loan.
3. Competitive interest rates
While it's a common misconception that loan against property NBFC interest rates are high, many offer competitive rates that are on par with or sometimes even better than those of banks. The interest rates are determined based on your loan amount, property value, and repayment capacity. For example, Tata Capital, the best NBFC for loan against property, offers the most competitive loan against property interest rates in the market.
4. Repayment flexibility
Flexibility in repayment is another compelling reason to go with an NBFC. You can choose a repayment plan that suits your financial situation. Options like flexible tenure, part-prepayment, and foreclosure without hefty charges allow you to manage your loan smartly.
5. Easy eligibility criteria
NBFCs offer a more flexible set of eligibility criteria compared to traditional banks, which is beneficial for self-employed or individuals with fluctuating income. NBFCs consider criteria such as age, income, property value, and credit history, however, they do so with a broader acceptance rate. This makes loans from NBFCs more accessible.
6. Minimal documentations
Private banks usually require submitting a hefty pile of documents for loan approval. NBFCs require minimal documentation to process your loan against property. Typically, documents required for NBFC LAP loans include identity proof, address proof, property papers, and proof of income.
7. Quick approval and disbursal
A notable feature of NBFC loans against property is the quick approval and disbursal process for loans against property. This efficiency is thanks to the fully digitalised application process as it streamlines all the steps from submission of the loan application form to approval. Fast approvals are especially beneficial when you need funds for emergencies.
8. Custom loan products
NBFCs offer a range of custom loan products tailored to meet specific needs. You can easily customise the tenure and loan amount you need based on your repayment capability and financial requirements. Whether you’re looking for a loan with a balloon payment option or a monthly payment plan, NBFCs can create customised solutions for you.
9. Personalised customer service
Lastly, the personalised customer service offered by NBFCs makes the whole loan process less-daunting. With dedicated relationship managers and customer service teams, you receive individual attention and support throughout the loan process. This personalisation ensures a transparent process where all your queries are answered and issues are resolved.
Additionally, NBFC often provide specialised tools such as the loan against property emi calculator which help you understand the financial commitment of monthly repayments better. This helps you make informed decisions.
Final thoughts
Choosing an NBFC loan against property has numerous benefits that cater to your financial needs and preferences. From high loan amounts and convenient processing to personalised customer service, they are an attractive option for securing funds against your property.
Tata Capital stands out as the best NBFC for loan against property with competitive interest rates, convenient online processes and top-notch customer service. Visit the Tata Capital website or download the Tata Capital App to apply for a Loan on Property today!
The details mentioned in this blog may change from time to time and from vendor to vendor or government policies.
11 June 2024
6 mins read
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