What are the advantages of the non-banking financial company?
- Evaluation of borrowers’ credibility: Before providing any loan, non-banking financial institutions and even any NBFC P2P check the credibility of borrowers or customers through credit score and business history of borrowers. This makes the recovery of loans more reliable.
- Easy availability of Credit: Non-banking financial companies offer loans to customers in easy terms and conditions with fewer formalities. This makes it suitable for small borrowers.
- Unsecured loans: Non-banking financial companies also provide unsecured loans to customers. This facilitates borrowers to take a loan without pledging any assets or property.
- Enhances Standard of living: loans provided by non-banking financial companies’ growth of industrialization increases the purchasing power of the individuals, which ultimately contributed to enhancing the standard of living.
- Provided with small credit or loan: along with high-value business, loans need non-banking financial companies also entertain small credit needs of the customer.
- Study loans from non-banking financial companies: nonetheless, with a study loan from non-banking financial companies you will never have to worry about this. This is because maximum lenders will encompass unusual or vocational procedures along with various different new-age tech courses, data science courses, photography courses, sports engineering, and various others as well.
NO MARGIN MONEY REQUIRED– study loans should leave you nothing to bother about, finance-wise. Nonetheless, this is not invariably the case, extremely when you rent from public locality banks. In many cases, they will require you to provide some sort of margin money or down payment beige they cover the rest of the cost. Nonetheless, this is not the prosecution with study loans put up with non-banking financial companies. These lenders usually provide a hundred percent finance, ensuring that you have nothing to worry about.
COLLATERAL- FREE FINANCING: One of the biggest advantages of study loans from non-banking financial companies. When you obtain from a bank, and extremely some of the community sector banks, they will mandate collateral for an instruction loan that outperforms Rs. 7.5 lakhs. And when it comes to an overseas education loan, your loan amount will most likely exceed that amount. Presently, if the student is brilliant and has a reasonable future, this could be an enormous roadblock if he or she does not have any investments to provide as collateral. However, this is a problem you will most likely never face with a Non-banking financial company. This is because most of the leading NBFC’s will not require you to provide any collateral, even if your loan amount exceeds Rs.7.5 lakhs. Of course, for larger loans of up to 59 lakhs and more, you might be asked to provide some sort of collateral to secure the loan.
What are the disadvantages of NBFC registration?
- Non-banking financial companies cannot accept the demand deposits, since it lies within the dimension of commercial banks. The non-banking financial companies cannot issue cheque drawn on itself, as it is not part of the payment and settlement system. All types of non-banking financial companies cannot accept deposits from the public. The regulatory mechanism for non-banking financial companies is stringent.
Conclusion
There are clear advantages and some disadvantages of NBFC formation in India. Though, considering the size of the humongous Indian financial market, the growth potential for NBFCs is great. Therefore it is recommended that it is the right time to get the NBFC registration to tap on the advantages of a recovering Indian financial market post COVID.
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