It’s very common nowadays that Nbfc Companies in Bangalore are getting more preferences than banks when it comes to opting for education loans. But have you thought why people are opting for NBFCs more? WE have jotted down the difference between a bank and a NBFC and we will leave it up to you to decide why NBFC is superior than a bank.
- Difference between Banks and NBFC: Bank borrows money from common people and gives interests on savings accounts and fixed deposits while NBFC borrows money from investors or financial institutions, and their average cost of borrowing money is 9%, and that of banks are 6-7%. When students choose NBFC over banks their interest rates are higher.
- Processing Fees: Banks consumes higher processing time than NBFC. So, if you need a loan on an urgent basis, NBFC is a preferred option over banks.
- Tax Benefits: If you are taking a loan from a bank you automatically become eligible for income tax deduction while when taking a loan from NBFC there are no clear income tax exemption rules mentioned. Although education loans from NBFC is eligible for income tax deduction.
- Repayment during course period: When you take a loan from a bank, you can start repaying while studying. You have to repay once you get a job or 6 months after the completion of your particular course. In NBFC, you have to pay a certain amount every month.
Advantages of Borrowing from an NBFC:
- The biggest advantage of borrowing from an NBFC is that they cover a huge range of institutions and courses universally, as against banks, who restrict their loan offerings based on the course and the destination.
- NBFC's lending process is far more relaxed, easier, and transparent and is often much faster in sanctioning & disbursing loans. They are also more likely to offer a wide range of customer friendly services that may be specifically suited to certain students.
- A lesser amount of paperwork is required to obtain a loan from NBFC than a bank.
- NBFCs usually don't cap the amount of loan that they can offer a student. Based on the course requirements & its value NBFC can offer loans to the tune that the student is requesting. Banks, on the other hand, have a limit set on the amount they can offer a student.
Therefore, from the above conclusion we can assume that NBFCs are more relaxed when it comes to providing loans. So if you need a loan on a urgent basis you can search for “List of Nbfc in Bangalore” and get your loan approved in a blink.