{"id":12114,"date":"2020-08-06T11:59:08","date_gmt":"2020-08-06T06:29:08","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=12114"},"modified":"2020-08-06T11:59:14","modified_gmt":"2020-08-06T06:29:14","slug":"nbfc-home-loans","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/","title":{"rendered":"NBFC Home Loans: How It Is Better Than Bank Home Loans?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Nowadays, the <strong><em>trend<\/em><\/strong> of <strong><em>choosing NBFC Home Loans<\/em><\/strong>\nover Bank Home Loans is <strong><em>rising swiftly<\/em><\/strong>. The <strong><em>main\nreason<\/em><\/strong> behind the rise is the <strong><em>accessibility of loans to borrowers<\/em><\/strong>.\nHowever, there is still a <strong><em>part of the population<\/em><\/strong> present in\nthe economy that <strong><em>faces<\/em><\/strong> the <strong><em>dilemma and confusion<\/em><\/strong> between <strong><em>NBFC and\nBank Home Loans<\/em><\/strong>. <\/p>\n\n\n\n<p>This <strong><em>blog <\/em><\/strong>will resolve all the issues and\ndiscuss <strong><em>factors<\/em><\/strong> that make <strong><em>NBFC Home Loans better than Bank Home Loans.<\/em><\/strong><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a28d1c742076\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a28d1c742076\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Concept_of_NBFC_Home_Loans\" title=\"Concept of NBFC Home Loans\">Concept of NBFC Home Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Concept_of_Housing_Finance_Companies\" title=\"Concept of Housing Finance Companies\">Concept of Housing Finance Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Benefits_of_NBFC_Home_Loans_in_India\" title=\"Benefits of NBFC Home Loans in India\">Benefits of NBFC Home Loans in India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Faster_Processing\" title=\"Faster Processing\">Faster Processing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Minimum_Documentation\" title=\"Minimum Documentation\">Minimum Documentation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Less_Stringent\" title=\"Less Stringent\">Less Stringent<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Faster_Disbursement\" title=\"Faster Disbursement\">Faster Disbursement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Low_Interest_Rates\" title=\"Low Interest Rates\">Low Interest Rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Accessible_to_Low_Credit_Scorers\" title=\"Accessible to Low Credit Scorers\">Accessible to Low Credit Scorers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Lesser_Rules_and_Regulations\" title=\"Lesser Rules and Regulations\">Lesser Rules and Regulations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Offer_Higher_Loan_Quantum\" title=\"Offer Higher Loan Quantum\">Offer Higher Loan Quantum<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Disadvantages_of_Bank_Home_Loans_in_India\" title=\"Disadvantages of Bank Home Loans in India\">Disadvantages of Bank Home Loans in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#NBFCs_that_Provide_Home_Loans\" title=\"NBFCs that Provide\nHome Loans\">NBFCs that Provide\nHome Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Difference_between_NBFC_Home_Loans_and_Bank_Home_Loans\" title=\"Difference between\nNBFC Home Loans and Bank Home Loans\">Difference between\nNBFC Home Loans and Bank Home Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Factors_to_Consider_Before_Choosing_NBFC_Home_Loans\" title=\"Factors to Consider Before Choosing NBFC Home Loans\">Factors to Consider Before Choosing NBFC Home Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/learning\/nbfc-home-loans\/#Conclusion\" title=\"Conclusion \">Conclusion <\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_NBFC_Home_Loans\"><\/span>Concept of NBFC Home Loans<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>NBFCs<\/em><\/strong> or <strong><em>Non Banking Financial Companies<\/em><\/strong>\nare the financial institutions that<strong><em> offer banking services<\/em><\/strong> but up to a <strong><em>limited\nextent<\/em><\/strong>. However, these institutions <strong><em>do not<\/em><\/strong> have a <strong><em>banking\nlicense<\/em><\/strong>. That means they are <strong><em>different from commercial banks<\/em><\/strong>.<\/p>\n\n\n\n<p>Further, an <strong><em>NBFC<\/em><\/strong> is <strong><em>exempt<\/em><\/strong>\nfrom the ambit of the <strong><em>Banking Regulations Act, 1949<\/em><\/strong>, which\nmeans it is <strong><em>not required<\/em><\/strong> to <strong><em>follow <\/em><\/strong>the<strong><em> compliances<\/em><\/strong> that of a traditional\n<strong><em>bank<\/em><\/strong>.<\/p>\n\n\n\n<p>An NBFC is <strong><em>not eligible<\/em><\/strong> to <strong><em>accept\ndeposits<\/em><\/strong> and provide an <strong><em>overdraft facility<\/em><\/strong>. However, these\ninstitutions can offer<strong><em> underwriting services, credit facilities<\/em><\/strong>,\nand <strong><em>loans<\/em><\/strong>.\nThe term \u201c<strong><em>loans<\/em><\/strong>\u201d denotes <strong><em>Auto Loan, Gold Loan, Educational Loan<\/em><\/strong>,\nand <strong><em>Home\nLoan<\/em><\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Housing_Finance_Companies\"><\/span>Concept of Housing Finance Companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An <strong><em>HFC<\/em><\/strong> or <strong><em>Housing Finance Company<\/em><\/strong>\nis a type of NBFC PAN-India that is engaged in the <strong><em>principal business<\/em><\/strong> of <strong><em>offering\nFinance<\/em><\/strong> for the <strong><em>construction, development<\/em><\/strong>, and <strong><em>acquisition\nof Houses<\/em><\/strong>.<\/p>\n\n\n\n<p>The <strong><em>Reserve Bank of India<\/em><\/strong> has the <strong><em>authority<\/em><\/strong>\nto <strong><em>regulate\nand administer<\/em><\/strong> HFCs in India. <\/p>\n\n\n\n<p>Further, a <strong><em>Housing Finance Company<\/em><\/strong> cannot commence its business operations or lend money without obtaining a <strong><em>Certificate of Registration (COR<\/em><\/strong>) from the <strong><em>Reserve Bank of India<\/em><\/strong><a href=\"https:\/\/www.rbi.org.in\/\">[1]<\/a> .<\/p>\n\n\n\n<p>Moreover, an HFC can provide <strong><em>NBFC Home Loans<\/em><\/strong> for the <strong><em>purchase,\nrenovation<\/em><\/strong>, and <strong><em>expansion of a plot or house<\/em><\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_NBFC_Home_Loans_in_India\"><\/span>Benefits of NBFC Home Loans in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"768\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/Benefits-of-NBFC-Home-Loans-in-India-1024x768.png\" alt=\"Benefits of NBFC Home Loans\" class=\"wp-image-12116\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/Benefits-of-NBFC-Home-Loans-in-India-1024x768.png 1024w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/Benefits-of-NBFC-Home-Loans-in-India-300x225.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/Benefits-of-NBFC-Home-Loans-in-India-768x576.png 768w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/Benefits-of-NBFC-Home-Loans-in-India.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n\n<p>The <strong><em>benefits<\/em><\/strong> of choosing <strong><em>NBFC\nHomes Loans<\/em><\/strong> over Bank Home Loans are as follows:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Faster_Processing\"><\/span>Faster Processing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One of the <strong><em>major reasons<\/em><\/strong> for the <strong><em>growth<\/em><\/strong>\nof <strong><em>NBFC\nHomes Loans<\/em><\/strong> in India is the <strong><em>faster loan processing facility<\/em><\/strong>. Normally,\n<strong><em>banks<\/em><\/strong>\ntake a <strong><em>lot of time<\/em><\/strong> to <strong><em>grant a home loan<\/em><\/strong>. However, <strong><em>NBFCs<\/em><\/strong>\n<strong><em>process\nloans faster<\/em><\/strong> than banks.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Minimum_Documentation\"><\/span>Minimum Documentation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In comparison to traditional banks,\nNBFCs require <strong><em>less documentation<\/em><\/strong> for <strong><em>granting home loans<\/em><\/strong>. That means\nthere is a <strong><em>higher chance<\/em><\/strong> for an <strong><em>individual<\/em><\/strong> to get his\/her <strong><em>loan\nrequest approved<\/em><\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Less_Stringent\"><\/span>Less Stringent<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Usually, <strong><em>traditional banks<\/em><\/strong> are <strong><em>more\nstringent<\/em><\/strong> in <strong><em>approving a home loan<\/em><\/strong>, whereas <strong><em>NBFCs\n<\/em><\/strong>follow a <strong><em>less strict procedure<\/em><\/strong> for granting a home loan. This is because\nthe <strong><em>primary\nobjective<\/em><\/strong> of an NBFC is to provide <strong><em>easy credit facilities<\/em><\/strong> to the <strong><em>backward\nsection of the society<\/em><\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Faster_Disbursement\"><\/span>Faster Disbursement<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the <strong><em>three benefits<\/em><\/strong> mentioned above <strong><em>results<\/em><\/strong>\nin the <strong><em>faster disbursement of a loan request<\/em><\/strong>. That means there is no\nneed for the applicant to wait for months to get a home loan. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Low_Interest_Rates\"><\/span>Low Interest Rates<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Due to the <strong><em>cut-throat competition<\/em><\/strong> in the Home\nLoan Sector, <strong><em>NBFCs<\/em><\/strong> are <strong><em>compelled to offer<\/em><\/strong> home <strong><em>loans\nat low rates<\/em><\/strong>. That means the <strong><em>borrower<\/em><\/strong> will <strong><em>benefit<\/em><\/strong> from both <strong><em>low\ninterest rate<\/em><\/strong> and <strong><em>reduced Loan EMI<\/em><\/strong>. <\/p>\n\n\n\n<p>The <strong><em>Interest Rates<\/em><\/strong> offered by NBFCs on\nHome loan <strong><em>ranges<\/em><\/strong> from <strong><em>8% to 19%.<\/em><\/strong> According to an <strong><em>analysis<\/em><\/strong>\npublished by <strong><em>Finance Buddha<\/em><\/strong>, the <strong><em>lowest interest rate<\/em><\/strong> provided on the\n<strong><em>Home\nLoan<\/em><\/strong> is by the <strong><em>PNB Housing Finance Ltd<\/em><\/strong>. It offers a\nminimum of <strong><em>9% interest<\/em><\/strong> on a loan amount of <strong><em>Rs 50000<\/em><\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Accessible_to_Low_Credit_Scorers\"><\/span>Accessible to Low Credit Scorers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As specified earlier, <strong><em>banks<\/em><\/strong> are <strong><em>more stringent<\/em><\/strong> and <em><strong>inflexible<\/strong><\/em> in <strong><em>granting home loans<\/em><\/strong> than NBFCs. This factor applies to the <em><strong>Credit Score<\/strong><\/em> of an individual as well. It means a <em><strong>traditional bank<\/strong><\/em> tends to <em><strong>provide loans<\/strong><\/em> to that <strong><em>person<\/em><\/strong> who has a <strong><em>high credit score<\/em><\/strong>. <\/p>\n\n\n\n<p>In contrast, <strong><em>NBFCs <\/em><\/strong>are formed for the <em><strong>betterment<\/strong><\/em> of the<em><strong> backward section<\/strong><\/em> of the <em><strong>society<\/strong><\/em>. Therefore, they <em><strong>easily provide loans<\/strong><\/em> to people with <em><strong>low credit scores.<\/strong><\/em> However, it shall be <strong><em>relevant to note<\/em><\/strong> that a <em><strong>person<\/strong><\/em> with a <strong><em>low credit score<\/em><\/strong> will <strong><em>suffer<\/em><\/strong> from <em><strong>high interest rates<\/strong><\/em>, and the <em><strong>person<\/strong><\/em> with <strong><em>high credit scores<\/em><\/strong> will <strong><em>benefit<\/em><\/strong> from a <strong><em>low credit score<\/em><\/strong>.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read this Amazing Blog<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/banks-vs-nbfcs\/\">Difference Between Banks v\/s NBFCs<\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Lesser_Rules_and_Regulations\"><\/span>Lesser Rules and Regulations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As an <em><strong>NBFC<\/strong><\/em> is <strong><em>different <\/em><\/strong>from a <em><strong>conventional bank<\/strong><\/em>, it has <strong><em>lesser rules<\/em><\/strong> and <em><strong>regulations<\/strong><\/em> to follow than a bank.<\/p>\n\n\n\n<p>This feature makes the <strong><em>accessibility<\/em><\/strong> of the <strong><em>NBFC Home Loans easy<\/em><\/strong> and <strong><em>approval <\/em><\/strong>process <strong><em>less intricate and complex<\/em><\/strong>. &nbsp;<\/p>\n\n\n\n<p>However, it will be noteworthy to note that the <strong><em>amount of loan disbursed <\/em><\/strong>by an <strong><em>NBFC<\/em><\/strong> will be<em><strong> lesser than<\/strong><\/em> that of a <em><strong>scheduled bank<\/strong><\/em>. The reason behind this is that the <strong><em>cases<\/em><\/strong> of <strong><em>non-payment <\/em><\/strong>also <strong><em>increase<\/em><\/strong> with the <strong><em>minimum regulations<\/em><\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Offer_Higher_Loan_Quantum\"><\/span>Offer Higher Loan Quantum<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The term \u201c<strong><em>Higher Loan Quantum<\/em><\/strong>\u201d denotes that <strong><em>NBFC Home Loans<\/em><\/strong> <strong><em>include<\/em><\/strong> both <em><strong>Registration Cost<\/strong><\/em> and <strong><em>Stamp Duty<\/em><\/strong> in the <strong><em>Market Valuation<\/em><\/strong> of the <strong><em>Property<\/em><\/strong>.<\/p>\n\n\n\n<p><strong><em>For example<\/em><\/strong>, the market value of a property is Rs 60 lakhs, and the average stamp duty and registration cost is 5% and 1% of the market value of the property. So, both come to 6% of Rs 60 lakhs, i.e., Rs 360000. <\/p>\n\n\n\n<p>Now, if the Home Loan is taken from an HFC, then the amount of Rs 360000 is already included in the market value of the property. In this way, the <em><strong>borrowers<\/strong><\/em> <em><strong>avail of higher loan quantum<\/strong><\/em>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_Bank_Home_Loans_in_India\"><\/span>Disadvantages of Bank Home Loans in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Some of the <strong><em>major disadvantages<\/em><\/strong> of <strong><em>Bank Home Loans<\/em><\/strong> in India are as follows:<\/p>\n\n\n\n<ol><li><em><strong>Traditional Banks<\/strong><\/em> follow a <em><strong>complex<\/strong><\/em> and <em><strong>intricate process<\/strong><\/em> of <strong><em>documentation<\/em><\/strong>. Hence, they take <strong><em>more time <\/em><\/strong>to <strong><em>process<\/em><\/strong> a <em><strong>home loan application<\/strong><\/em>.<\/li><li>Banks <strong><em>do not offer<\/em><\/strong> loans to people with a<em><strong> low credit score<\/strong><\/em>. That means, if an<strong><em> individual <\/em><\/strong>has a <em><strong>credit score<\/strong><\/em> of <strong><em>less than 750<\/em><\/strong>, he\/she will <strong><em>not be able<\/em><\/strong> to <strong><em>avail of<\/em><\/strong> a <em><strong>home loan<\/strong><\/em><strong> <\/strong>in India easily.<\/li><li>Conventional <strong><em>Banks<\/em><\/strong> provide a <strong><em>lower loan quantum<\/em><\/strong> in comparison to Housing Finance Companies. This is because the banks usually <strong><em>do not<\/em><\/strong> <strong><em>include Stamp Duty charges<\/em><\/strong> and <strong><em>Registration Cost<\/em><\/strong> in the <strong><em>market value<\/em><\/strong> of the <strong><em>property <\/em><\/strong>while granting loans.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NBFCs_that_Provide_Home_Loans\"><\/span>NBFCs that Provide\nHome Loans<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <em><strong>NBFCs<\/strong><\/em> that provide <em><strong>Home Loans in India<\/strong><\/em> are as follows:<\/p>\n\n\n\n<ol><li>Reliance Capital;<\/li><li>L&amp;T Finance;<\/li><li>Mahindra and Mahindra Financial Services Limited;<\/li><li>Sundaram Home Finance Limited;&nbsp;<\/li><li>LIC Housing Finance Limited;&nbsp;<\/li><li>Indiabulls Housing Finance Limited;&nbsp;<\/li><li>Power Finance Corporation Limited;&nbsp;<\/li><li>Bajaj Finserv;<\/li><li>HDFC;&nbsp;<\/li><li>Muthoot Homefin;<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_between_NBFC_Home_Loans_and_Bank_Home_Loans\"><\/span>Difference between\nNBFC Home Loans and Bank Home Loans<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td><strong>Basis<\/strong>   <\/td><td><strong>Housing   Finance Companies<\/strong>   <\/td><td><strong>Commercial   Banks<\/strong>   <\/td><\/tr><tr><td><strong>Type of Loans offered<\/strong>   <\/td><td>HFCs offer <strong><em>mono-line product,<\/em><\/strong> i.e., only Home Loan   <\/td><td>Commercial Banks offer <em><strong>loans of all types<\/strong><\/em>, such as Home Loan, Educational Loan, Auto Loan, Personal Loan, etc.   <\/td><\/tr><tr><td><strong>Lending Rate<\/strong>   <\/td><td>PLR (<strong><em>Prime Lending Rate<\/em><\/strong>)   <\/td><td>MCLR (<em><strong>Marginal Cost of Fund Based Lending Rate<\/strong><\/em>)   <\/td><\/tr><tr><td><strong>Documentation Process<\/strong>   <\/td><td><strong><em>Less strict<\/em><\/strong> documentation process   <\/td><td><strong><em>Stringent<\/em><\/strong> procedure for documentation   <\/td><\/tr><tr><td><strong>Interest Rates<\/strong>   <\/td><td><strong><em>Lower<\/em><\/strong> than Banks   <\/td><td><strong><em>Higher<\/em><\/strong> than Housing Finance Companies   <\/td><\/tr><tr><td>\n  <strong>Overdraft\n  Facility<\/strong>\n  <\/td><td>HFCs <strong><em>do not<\/em><\/strong> provide <em>Overdraft Facility<\/em>   <\/td><td>Traditional Banks <em><strong>provide Overdraft Facility   <\/strong><\/em><\/td><\/tr><tr><td><strong>Benefits of Interest Rates<\/strong>   <\/td><td><strong><em>Slower <\/em><\/strong>in <strong><em>Passing Interest Rate benefits<\/em><\/strong> <strong><em>to borrowers <\/em><\/strong>as compared to traditional banks<br>   <br>      <\/td><td><strong><em>Faster <\/em><\/strong>in<strong><em> Passing Interest Rate benefits to borrowers<\/em><\/strong> as compared to Housing Finance Companies.   <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Factors_to_Consider_Before_Choosing_NBFC_Home_Loans\"><\/span>Factors to Consider Before Choosing NBFC Home Loans<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <strong><em>factors to consider<\/em><\/strong> <em><strong>before choosing NBFC Home Loans<\/strong><\/em> in India are as follows:<\/p>\n\n\n\n<ol><li><strong><em>NBFC Home Loans<\/em><\/strong> are based on <em><strong>PLR (Prime Lending Rates)<\/strong><\/em>, but <strong><em>Bank Home Loans <\/em><\/strong>are<em><strong> linked<\/strong><\/em> to <strong><em>MCLR (Marginal Cost of Fund Based Lending Rates)<\/em><\/strong>. <strong><em>MCLR<\/em><\/strong> is more <em><strong>beneficial<\/strong><\/em> to the owner as it provides <strong><em>similar interest rates<\/em><\/strong> on all home loans. However, <em><strong>PLR<\/strong><\/em> offers <strong><em>higher interest rates<\/em><\/strong> that may <em><strong>fluctuate throughout<\/strong><\/em> the period of Home Loan.<\/li><li>Traditional <strong><em>Banks<\/em><\/strong> are <strong><em>obligated<\/em><\/strong> to <strong><em>pass on RBI benefits to customers<\/em><\/strong>. In contrast, there is no need for an <strong><em>NBFC<\/em><\/strong> to pass on any benefit, and it is <em><strong>free to set<\/strong><\/em> its <em><strong>own rate of interest.<\/strong><\/em><\/li><li><strong><em>Banks<\/em><\/strong> are <em><strong>not allowed<\/strong><\/em> to <em><strong>lend money<\/strong><\/em> <strong><em>below<\/em><\/strong> the <em><strong>value<\/strong><\/em> prescribed by <em><strong>MCLR<\/strong><\/em>, whereas an NBFC is free to provide a loan.<\/li><li><strong><em>Banks<\/em><\/strong> can provide an <strong><em>overdraft facility<\/em><\/strong> on a <strong><em>loan amount<\/em><\/strong>. This <strong><em>amount<\/em><\/strong> is <strong><em>linked<\/em><\/strong> to the <strong><em>borrower\u2019s bank account<\/em><\/strong>, and he\/she is all <strong><em>free to use <\/em><\/strong>it to avail of a <em><strong>surplus amount<\/strong><\/em>. However, there is no such option provided by the Housing Finance Companies.<\/li><li>A <strong><em>Non Banking Financial Company<\/em><\/strong> has a <em><strong>smaller customer base<\/strong><\/em> than a conventional bank. That means there are <strong><em>high chances<\/em><\/strong> for an individual to get his\/her <strong><em>loan request approved<\/em><\/strong>.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Although the trend of <strong><em>obtaining NBFC Home Loans<\/em><\/strong> is rising at a mounting rate, however, it is always advised that an individual must <em><strong>evaluate<\/strong><\/em> his\/her <em><strong>repayment capacity<\/strong><\/em>, <strong><em>understand<\/em><\/strong> the <strong><em>concept of Home Loan<\/em><\/strong> before applying for it. <\/p>\n\n\n\n<p>In case of any other confusion and perplexity, reach out to Swarit Advisors, our professionals will provide you a clear understanding of NBFC Home Loans. Our experts rank high in <strong><em><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\">NBFC Registration<\/a><\/em><\/strong> and <em><strong>Advisory Services<\/strong><\/em>.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read, Also<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/importance-of-nbfcs\/\">Importance of NBFC<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nowadays, the trend of choosing NBFC Home Loans over Bank Home Loans is rising swiftly. The main reason behind the rise is the accessibility of loans to borrowers. However, there is still a part of the population present in the economy that faces the dilemma and confusion between NBFC and Bank Home Loans. This blog [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":12115,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[89],"tags":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/12114"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=12114"}],"version-history":[{"count":9,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/12114\/revisions"}],"predecessor-version":[{"id":12127,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/12114\/revisions\/12127"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/12115"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=12114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=12114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=12114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}