NBFC and Banking Finance
NBFC, a company registered with ROC under Companies Act, 1956
Non Banking Finance Company in short is NBFC. An NBFC is a company registered with ROC under Companies Act, 1956. NBFC is a company that offers banking services to people without a banking license from RBI. Non Banking Finance Companies are under the regulation of RBI. They need to follow Companies Act guidelines too.
Find the Best Loan Consultants for Non Banking Finance Company in Chennai, Tamil Nadu, India
NBFCs offer great support in development of a nation. They support backward sections of society. Rural segments get Bank credits from Non Banking Finance Companies. They aid boosting transport, education and create wealth of an economy.
How Non Banking Finance Company works
NBFC companies do not accept deposits repayable on demand. NBFC are more into credit creation. They do no maintain any reserve ratio. Non Banking Finance Company depositors do not have deposit insurance facility.
Business activities of NBFCs
The nature of business activities of NBFCs can be about loans & advances. Buying of shares, bonds & other securities. Leasing, hire-purchase, insurance or chit business. They do not include companies related to agriculture, immovable property or industrial activities.
Demand for Loans, credit and other financial needs
NBFC supports both individual and business borrowers. They support applicants who have trouble in meeting traditional bank eligibility standards. They meet rising demand for loans, credit and other financial needs of people.
Alternate sources of finance
NBFC are not only an alternate sources of finance, they are more efficient too. Clients have direct contact with NBFCs. Thus this eliminates unnecessary financial intermediaries when one seeks loan. They provide credit and finance to keep the liquidity of our economy.
Wide range of Financial products and services
They offer wide range of products and services. They are credit facilities. Loans & advances. Saving and investment plans. Acquiring of stocks /shares. Hire-purchase. Insurance or chit business. Money transfer services.
Education loans & retirement plans
They also offer education loans & retirement plans. They do stock-shares underwriting and money market trade. In fact, They issue term finance certificate and are in to other activities. NBFCs are also into wealth management services. It can be shares discounting services & stock portfolio management.
Trade finance, venture finance and specialized equipment finance
They offer finance for Construction equipment, Commercial vehicles and cars. They offer gold loans. Loan against shares. Consumer durable loan. 2 wheeler loans. They fund infrastructure assets like plant and machinery and aid project finance too. They provide trade finance, venture finance and specialized equipment finance.
NBFC VS BANKING FINANCE
Getting loan is no more a trouble now. If you are eligible applicant, you can have more than one loan offers from banks and NBFC. When you loan options from both banks and NBFC, you will be in a wondering which loan to opt for. Before you decide, Let us compare both the loan options.
Finance intermediaries
NBFC are becoming popular among borrowers. They offer better performance than banks with great customer support. Banks and NBFC are both finance intermediaries. Their services are pretty much same. This is where the customer is in a dilemma who one to choose.
Some of the advantages of NBFC over bank finance are:
Quick loan sanctioning process. – A loan application goes through varied procedures involving stringent verification. Both banks and NBFCs have their own system of verification. Online facilities and technology can help you bring down loan application process time. NBFCs processing time is low when compared to banks. Hence getting quick loan money in to your account is simple and easy with NBFC.
Less time for loan process. –
NBFC follow stringent verification process like banks. But they accommodate scan proofs of required copies online too. This takes them less time to approve and sanction loans. You can get processed and approved within few hours too with NBFCs.
Flexibility of loan terms. –
Banks need to follow loan and conditions terms as instructed by RBI. But NBFC has the freedom to decide about loan term with the borrowers. Hence NBFC has edge over bank loan terms. You can skip the boring loan paperwork with NBFC. But banks do insist on loan paperwork. NBFC support online loan application. Whereas all banks do not accommodate online loan applications. You can get top loan amount with long tenure within few hours approval with NBFCs.
Attractive features and benefits. –
NBFC offers many positive features and benefits to both new and existing borrowers. Banks loans also have good features and benefits. But they not be as attractive as NBFC.
Wide arrays of tailored loan products.
– NBFC are ready to offer a wide range of tailored loans and other financial products. This is very much beneficial to borrowers when get good loan offers with low loan cost.
Great customer service.
NBFC often do involve any middlemen to approach clients. They have direct contact with clients without any middlemen. This helps them to understand the customers’ needs better. Both banks and NBFC are into meeting finance demands of their customers. But NBFCs offer dedicated customer services to derive customer satisfaction. They have customer relationship manager who are happy to help all the time.
Cheap loans and low interests. –
Bank interest rates are under RBI regulation. Their interest rate includes base rate + margin. Bank loans involves certain costs. They are processing fee, application fee or legal fee. NBFCs interest rate is RPLR based. Non Banking Finance Company have freedom to fix interest rate that is not linked to RBI. Hence one can avail loan at low interest without other fees too.
Less Rules and Regulations. –
Getting loans from NBFC is much easy than bank loan. It is because they do not follow complicated loan processing rules like banks. But do involve in stringent verification that are convenient to clients.
Loan offers for poor credit score. –
NBFC offers loan to applicants who have poor credit score. Banks may not encourage applicants with less credit score below the loan eligibility. They consider low credit score a high risk loan. Non Banking Finance Company accommodates low score applicants with suitable loan products.
Choose Top Finance Consultants in Chennai, Tamil Nadu, India
Sometimes interest and collateral may vary on the credit score. Individuals prefer to get loans from NBFC due to great customer care. Corporate may prefer banking finance due to huge amount and long term. Yet Non Banking Finance Company are competing with banks to bag corporate clients too. Choose Top Finance Consultants in Chennai, Tamil Nadu, India to avail the best Bank Loan offers.
Now you have got a better picture of NBFC loan and bank finance. Choose the loan option suitable for you and overcome your financial hurdles.
Find the Best Loan Consultants for Non Banking Finance Company in Chennai, Tamil Nadu, India
