{"id":24540,"date":"2021-01-20T14:33:20","date_gmt":"2021-01-20T09:03:20","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=24540"},"modified":"2021-01-20T14:33:22","modified_gmt":"2021-01-20T09:03:22","slug":"impact-of-nbfc-on-the-vehicle-and-housing-loan-sector-in-recent-times","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/impact-of-nbfc-on-the-vehicle-and-housing-loan-sector-in-recent-times\/","title":{"rendered":"Impact of NBFC on the Vehicle and Housing Loan Sector in Recent Times"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In the past few years, the Indian economy has encountered innumerable banking frauds done by bigger organizations, which in turn creates the liquidity crunch in the financial sector. The government has continued to tighten the existing compliances to curb such fraudulent activities. However, that measure has hindered the ability of financial houses to grant easy loans to the credit seeker. In this blog, we will pay attention to the financing of Vehicle and housing loan by NBFCs.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><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><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-nbfc-on-the-vehicle-and-housing-loan-sector-in-recent-times\/#Contribution_of_NBFC_in_Recent_Times\" >Contribution of NBFC in Recent Times<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-nbfc-on-the-vehicle-and-housing-loan-sector-in-recent-times\/#Role_of_Non-Banking_Financial_Company_in_the_Present_Scenario\" >Role of Non-Banking Financial Company in the Present Scenario<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-nbfc-on-the-vehicle-and-housing-loan-sector-in-recent-times\/#An_General_overview_on_the_Vehicle_Loan_offered_by_Banks_and_Private_Lenders\" >An General overview on the Vehicle Loan offered by Banks and Private Lenders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-nbfc-on-the-vehicle-and-housing-loan-sector-in-recent-times\/#An_Overview_on_Housing_Loan_offered_by_Conventional_Lenders_and_NFBCs\" >An Overview\non Housing Loan offered by Conventional Lenders and\nNFBCs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-nbfc-on-the-vehicle-and-housing-loan-sector-in-recent-times\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Contribution_of_NBFC_in_Recent_Times\"><\/span>Contribution of NBFC in Recent Times<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>But thanks to <a href=\"https:\/\/corpbiz.io\/nbfc-registration\"><strong>NBFCs<\/strong><\/a> which responded proactively against this stressful situation. Non-banking Financial Companies contribution towards the financial sector in the past few years has nothing short of the remarkable fleet. And they are still going stronger by providing affordable and seamless financial services to the needy ones.&nbsp;&nbsp;<\/p>\n\n\n\n<p>NBFCs are quite remarkable when it comes to rendering affordable\nand diverse financial services. Also, they have a wide portfolio of financial\nservices including housing loans and car loans accessible to the individual at\na nominal rate of interest.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Role_of_Non-Banking_Financial_Company_in_the_Present_Scenario\"><\/span>Role of Non-Banking Financial Company in the Present Scenario<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>At present, NBFCs are perceived as a sole alternative to a bank.\nTheir scope of operation and nature of services is quite identical to that of\nbanks. In general, these entities are not provided with the right to accept\ndemand deposit from the general public.<\/p>\n\n\n\n<p>With the rise of NBFCs in our country, the portfolio of financial services has been extended to considerable extent, which allows unbanked section of the society to avail the loan. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/types-of-nbfcs-in-india\/\">Types of NBFCs in India \u2013 An Overview<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"An_General_overview_on_the_Vehicle_Loan_offered_by_Banks_and_Private_Lenders\"><\/span>An General overview on the Vehicle Loan offered by Banks and Private Lenders<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Buying a vehicle is one of the most imperative decisions for\none\u2019s life. One of the primary constraints in purchasing the vehicle is the\nscarcity of financial resources. Majority of the individual fails to purchase a\nvehicle owing to the non-fulfillment of financial demand that the banks were\nunable to cater due to stringent policies.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Issues Encountered by the Individual\nwhile Availing Vehicle Loan&nbsp;<\/h3>\n\n\n\n<p>Issues related to the Vehicle loans that borrower faces on the\nprominent basis. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Strict Norms<\/strong><\/h4>\n\n\n\n<p>As compared to private lenders, the norms of the conventional\nbank are not somewhat favorable for individual having low CIBIL score or\nincome. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Credit History<\/strong><\/h4>\n\n\n\n<p>Banks considered the CIBIL score as a prevalent parameter for\njudging the creditworthiness of an individual, which sometimes becomes a\nconstraint for people having an inconstant and low income.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Fees and Charges<\/strong><\/h4>\n\n\n\n<p>Apart from stringent eligibility criteria, the banks, mainly the\nmainstream ones, imposed various types of processing charges before disbursing\nthe actual amount of loan, which otherwise act as a hassle for many\nindividuals.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How NBFCs Supports Vehicle Loan Financing?&nbsp;<\/h3>\n\n\n\n<p>Non-Banking financial companies have emerged as the savior for\nthe unbanked sector of the country. It allows financially challenged people to\navail cost-effective credit including car loans at an affordable interest rate.\nPast success has allowed the NBFCs to increase their loan portfolio and boost\nthe vehicle loan sector for widespread reach.&nbsp;<\/p>\n\n\n\n<p>Availability of various NBFCs offering a wide range of credit\nschemes offers ample benefits to the proposed vehicle owners. Some of the\nadvantages are listed below.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Faceless Verification Process&nbsp;<\/strong><\/h4>\n\n\n\n<p>NBFCs leverage faceless verification process by implementing\ntechnology similar to Fintech companies. This not only overcome the hassle of\nmanual processing but also minimize turnaround time (aka TAT) for the\ndisbursement of the loan amount.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Reduce Turnaround Time&nbsp;<\/strong><\/h4>\n\n\n\n<p>With improved IT setup and implementation of newer technology,\nit becomes incredibly easier for the NBFCs to minimize the overall time taken\nfor disbursement of the loan. With that said, people applying for a loan now do\nnot have to wait for long to obtain their credit amount.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Affordable Interest Rate<\/strong><\/h4>\n\n\n\n<p>Cost of the vehicle is the decisive parameter for calculating\nthe interest rate. That means the vehicle cost is directly proportional to the\nrate of interest. The non-banking financial company offers flexible interest\nrates set out for different criteria.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Low Equated Monthly Installment<\/strong><\/h4>\n\n\n\n<p>The most considerable benefit rendered by NBFC is that offers\nauto loans with lower EMI when contrasted with banks.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Flexible Insurance Options<\/strong><\/h4>\n\n\n\n<p>Along with vehicle loans, NBFC also renders flexible insurance\noptions to meet the requirement of people.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"An_Overview_on_Housing_Loan_offered_by_Conventional_Lenders_and_NFBCs\"><\/span>An Overview\non Housing Loan offered by Conventional Lenders and\nNFBCs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Buying a house requires considerable financial planning. People\nare generally more inclined towards housing loan owing to easy disbursement and\nrepayment options. Unlike traditional banks, where disbursement of housing loan\nis subjected to stringent conditions, NBFCs is more productive in that regards.\nTheir main focus is to put aside all the obstacles that are prominent with\ntraditional lending. They usually excel on paperless verification and seamless\nprocessing so that end users find it convenient to cater to pre-lending\nrequirements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Comparison in the Financing of\nHousing Loan between NBFCs and Banks<\/h3>\n\n\n\n<p>The section below illustrates the factors that act as a ground\nfor comparison between NBFC and banks<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Basis of Interest Rates<\/strong><\/h4>\n\n\n\n<p>Bank uses the parameter like the Marginal cost of lending rate\n(MCLR) as the basis of home loan interest. On the contrary, NBFC calculates the\nrate of interest by taking the Prime lending rate (PLR) into account.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Eligibility\nfor loan<\/strong><\/h4>\n\n\n\n<p>Both banks &amp; NBFCs leverage the credit score of the proposed\nborrower, for determining the interest rate of a home loan. But unlike banks,\nNBFCs norms for a housing loan are more favorable in nature.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Higher Loan Quantum<\/strong><\/h4>\n\n\n\n<p>Banks generally disburse funds up to 80% of the property value,\nwhereas; NBFCs may finance home loan more than that of banks.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How NBFCs makes better Housing\nLoan Financing?<\/h3>\n\n\n\n<p>In the past years, the trends for financial housing loans are\nbeing shifted from traditional lending institute to NBFCs. This sector has been\nsuccessful in building up a positive repo for itself owing to easy disbursement\npolicies and reduced pre-lending requirements.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Type of Benefits offered by\nFinancing of Housing loan<\/h3>\n\n\n\n<p><em><strong>Financing of housing loan from NBFCs also renders additional benefits to the buyers which are as follows:-<\/strong><\/em><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Wide Portfolio of Loans&nbsp;<\/strong><\/h4>\n\n\n\n<p>The non-banking financial company sector provides credit\nfacilities for all type of housing loans, which also includes Housing\nConstruction Loan, Housing Renovation Loan, Housing Extension Loan, etc<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Lower Processing Time<\/strong><\/h4>\n\n\n\n<p>When contrasted with traditional lenders or banks, NBFCs take\nless time in processing the request of the proposed buyers.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Flexible Terms and Conditions&nbsp;<\/strong><\/h4>\n\n\n\n<p>NBFCs facilitate flexible terms and conditions for the clients\nlooking forward to borrowing the housing loans.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Easy Eligibility Norms<\/strong><\/h4>\n\n\n\n<p>NBFCs while funding a home loan sets up various easy eligibility\nnorms related to repayment, location, property valuation, etc.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Differences in customer services&nbsp;&nbsp;<\/strong><\/h4>\n\n\n\n<p>NBFCs being a private institution work are committed to meet\ntheir customer\u2019s demands related to home financing.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Nearly Paperless Processing<\/strong><\/h4>\n\n\n\n<p>Owing to the implementation of the latest technology, most of\nthe NBFCs have shifted their working protocols on the online platform. This\nallows these firms to reduce the time and cost-related assessment of physical\npaperwork.&nbsp;<\/p>\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>NBFCs are a growth driver for the financial infrastructure of this country. These institutions are taking every possible measure to make <em><strong>financial services<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Financial_services\"><em><strong>[1]<\/strong><\/em><\/a><\/sup> accessible to a wide bandwidth of customers. Through the incorporation of the latest technology and IT system, these firms are eyeing to reduce the turnaround time to a drastic level. Favorable financing conditions, flexible interest rate, wide array of financial products makes NBFCs the most preferable choice for the masses.<\/p>\n\n\n\n<p>Getting a vehicle or Housing loan from a conventional bank could be challenging for the individual, particularly in case of low CIBIL score. But thanks to private lenders like <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a> that enable individuals to avail of easy loans via minimal paperwork. Feel free to communicate your concern with CorpBiz expert in case if you need some expert-grade advice on financial services. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/operational-manual-of-the-nbfcs\/\">A Complete Guide on Operational Manual of the NBFCs<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the past few years, the Indian economy has encountered innumerable banking frauds done by bigger organizations, which in turn creates the liquidity crunch in the financial sector. The government has continued to tighten the existing compliances to curb such fraudulent activities. However, that measure has hindered the ability of financial houses to grant easy [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":24572,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[91],"tags":[1449],"acf":{"service_id":"8"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4233,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24540"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=24540"}],"version-history":[{"count":9,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24540\/revisions"}],"predecessor-version":[{"id":24574,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24540\/revisions\/24574"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/24572"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=24540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=24540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=24540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}