All About NBFC Home Loans

Non-Banking Financial Companies (NBFCs) have become a popular choice for home loans in India. They offer flexibility, faster processing, and competitive interest rates, making them a good alternative to traditional banks. Moreover, NBFCs cater to a wide range of customers, including those with lower credit scores, making homeownership accessible to more people.

In this blog, we’ll explore the key aspects of NBFC home loans, such as their benefits, top NBFCs offering home loans, and how they compare to traditional bank loans. We’ll also discuss the expected NBFC home loan interest rates, eligibility criteria, necessary documents, repayment options, and what to consider when choosing an NBFC housing loan. Plus, you’ll discover how Urban Money can help to secure the best NBFC for your home loan. Let’s get started!

Advantages of Getting a Home Loan From a NBFC

NBFC housing finances have gained popularity due to their customer-centric approach and the variety of benefits they offer. Here are some key advantages:

• Flexibility in Eligibility Criteria: Unlike traditional banks, NBFCs have more lenient eligibility criteria, making it easier for individuals with varying financial backgrounds to secure a home loan.
• Quicker Loan Approval and Disbursement: NBFCs are known for their faster processing times, which can be a significant advantage when you need funds quickly.
• Competitive Interest Rates: NBFCs often offer lower interest rates tailored to your financial situation, potentially saving you money over the loan term.
• Customised Loan Products: Many NBFCs offer specialised loan products, such as home loans for individuals with low credit scores or those looking for a higher loan-to-value ratio.
• Enhanced Customer Service: NBFCs often provide more personalised customer service, with dedicated relationship managers to guide you through the loan process.
• Flexible Repayment Options: NBFC home loans feature more flexible repayment terms, allowing borrowers to choose a plan that best suits their financial situation.

Top NBFC Home Loan Company List in India 

The following are the top 10 NBFC home loan companies list in India. This ideally helps you determine the best NBFCs for home loans, along with NBFC home loan interest rates, loan tenure, and maximum loan amounts:

NBFC vs Bank Home Loan

When deciding between an NBFC and a traditional bank for your home loan, it’s important to understand the key differences:

• Eligibility Criteria: NBFC housing loans generally have more relaxed eligibility criteria than banks, which can benefit borrowers with low CIBIL scores or irregular incomes.
• Interest Rates: While NBFC home loan interest rates are typically competitive, banks tend to have slightly lower rates for customers with a strong credit profile.
• Processing Time: NBFCs are known for quicker loan processing and disbursement, making them a better choice for those needing immediate funds.
• Loan-to-Value Ratio (LTV): NBFC home loans often offer a higher LTV ratio, allowing borrowers to finance a larger portion of their property value through the loan.
• Regulation: Banks are regulated by the RBI, focusing on security and stability. While NBFCs are also regulated, have more flexibility and offer customised financial solutions that banks may not.

Eligibility Criteria for NBFC Home Loans

While the specific eligibility criteria for an NBFC housing loan can vary from one NBFC to another, the general requirements include:

• Age Limit: The borrower should be aged somewhere between 18 to 65 years old.
• Income Criteria: Steady income from employment or business is essential, with some NBFCs being more lenient towards applicants with irregular income.
• Credit Score: A CIBIL score of 650 and above is generally preferred, although NBFCs may offer loans to individuals with lower scores at higher interest rates.
• Employment Stability: A minimum of 1-2 years of employment stability or 3 years in the same business is often required.
• Property Value: The property must match the NBFC’s valuation standards and be free of legal disputes.
• Co-Applicants: Including a co-applicant with a strong financial profile can improve the chances of loan approval and potentially secure better terms.

Documents Required for NBFC Home Loans

Here are the applicable documents required for NBFC housing finance:

• Identity Proof: Aadhaar Card, PAN Card, Passport, Voter ID, or Driving License.
• Address Proof: Utility Bills, Rent Agreement, Passport, or Aadhaar Card.
• Income Proof: Salary slips for salaried individuals or Income Tax Returns (ITR) for self-employed individuals.
• Employment Proof: Offer letter and Form 16 for salaried individuals; Business Registration Certificate for self-employed individuals.
• Property Documents: Sale Deed, Allotment Letter, NOC from the builder, and Approved Building Plan.
• Bank Statements: Last 6 months’ bank statements to assess financial stability.
• Photographs: Passport-sized photographs of the applicant and co-applicant.

Repayment Options and Flexibility With NBFC Home Loans

NBFC home loans offer various repayment options that provide flexibility to borrowers. Here are the five common repayment options available to some of the best NBFCs for home loans:

• EMI (Equated Monthly Instalment): This is the most common method, where the loan is repaid in fixed monthly instalments over the loan tenure.
• Step-Up EMI Plan: In this option, the EMI starts low and increases over time, making it ideal for individuals expecting a rise in income.
• Balloon EMI Plan: This option involves paying lower EMIs initially, with a large sum paid towards the end of the loan tenure.
• Flexi EMI Plan: This plan allows borrowers to pay lower EMIs during the initial years and higher EMIs later, offering flexibility based on financial growth.
• Part-Payment: Some NBFCs allow part-payment of the loan, which can reduce the principal amount and subsequently lower the EMI burden.

Factors to Keep in Mind Before Obtaining a Home Loan From a NBFC

Have a close look at the certain tips you must keep in mind when you apply for NBFC housing finance:

• Interest Rates: Compare the interest rates across various NBFCs and opt for the best NBFC home loan interest rate.
• Loan Tenure: Choose a tenure that aligns with your financial goals. Longer tenures have lower EMIs but higher interest, while shorter tenures mean higher EMIs but lower interest.
• Processing Fees: NBFCs may charge higher processing fees than banks, so it is advisable to be aware of these costs upfront.
• Prepayment Penalties: Check if the NBFC charges prepayment penalties, especially if you plan to repay the loan early.
• Customer Service: Research the customer service reputation of your chosen NBFC. Good service can make the loan process smoother and stress-free.
• Loan-to-Value Ratio: Lower LTV ratios allow you to borrow a larger loan amount and often come with better terms and rates.

How Do You Apply for an NBFC Home Loan through Urban Money?

Following is the application process for NBFC home loans through Urban Money:

• Visit the official Urban Money website.
• Tap on the ‘Loan’ menu and select the ‘Home Loan’ option.
• You will be taken to a page titled ‘Home Loan.’
• There, you can compare over 50 home loan lenders.
• Once you locate the NBFC that suits you best, click the ‘Apply Now’ button.
• A brief online form will appear on your display.
• Fill in your name, mobile number, and city in the form.
• A 6-digit OTP will be sent to your phone.
• Fill in the OTP number and click on the ‘Submit’ button.
• A home loan specialist from our team will contact you within a day.

Advantages of Applying for NBFC Home Loan Through Urban Money

Urban Money offers several advantages that make it an ideal platform for applying for an NBFC housing loan:

• Comprehensive Comparison: Urban Money provides multiple options, allowing you to compare various NBFC home loans based on interest rates, tenure, fees, and more.
• Customised Offers: The platform tailors loan offers to match your specific financial profile, ensuring that you receive the most relevant options.
• Expert Assistance: Urban Money’s financial experts are available to answer your questions and provide guidance throughout the loan application process, empowering you to make informed decisions.
• Hassle-Free Process: The application process is entirely online. This helps you to save time and effort, as you are not required to visit bank branches or NBFC offices.
• Real-Time Tracking: The Urban Money platform allows you to monitor the progress of your loan application at every stage, ensuring you’re always informed and free of uncertainties.
• Secure Platform: Urban Money uses advanced encryption technology to ensure your personal and financial information security throughout the application process.

Frequently Asked Questions