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Understanding Non-Banking Financial Companies (NBFCs)
A Non-Banking Financial Company (NBFC) operates under the Companies Act, 1956, engaging in various financial activities such as providing loans and advances, acquiring securities, leasing, hire-purchase, insurance, and chit fund operations. However, NBFCs do not include institutions primarily involved in agricultural, industrial, or real estate activities. Additionally, a category known as Residuary non-banking companies includes those NBFCs primarily receiving deposits under specific schemes. Many NBFCs in India offer personal loans with competitive interest rates ranging from 10.99% p.a. to 36.00% p.a., with loan amounts typically reaching up to Rs. 25 lakh or more. It's essential to compare personal loan offerings from different NBFCs before selecting the most suitable option for your needs.
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What are the eligibility criteria for NBFC loans?
Eligibility criteria vary depending on the type of loan and the NBFC. Generally, factors such as income, credit history, age, and employment status are considered.
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How much can I borrow through an NBFC loan?
Loan amounts vary based on individual circumstances, loan type, and NBFC policies. Typically, NBFCs offer loan amounts ranging from thousands to lakhs of rupees.
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What documents are required to apply for an NBFC loan?
Commonly required documents include proof of identity, address proof, income documents (such as salary slips or business financials), and property documents (for LAP).
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What is the interest rate and repayment tenure for NBFC loans?
Interest rates and repayment tenures vary across NBFCs and loan types. Rates may be fixed or floating, and repayment tenures can range from months to years, depending on the loan amount and purpose.
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Are there any additional fees or charges associated with NBFC loans?
NBFCs may levy processing fees, prepayment charges, late payment fees, and other charges. It's essential to review the loan agreement carefully to understand all applicable fees and charges.
