With growing technology and widespread access to financing options, availing funds for business activities or for personal usage has become quicker and easier. Financing increases the spending power of individuals, it pushes money through the economy and accelerates business activities. Retail loans enable the masses to make purchase of previously unaffordable items with relative ease. On the other hand, corporate loans help provide small and large business the funds required to scale businesses and serve greater chunks of population. In addition, the enhanced economic activity promotes growth in employment and social mobility of the classes. Thus, financing is a means to reduce inequality among the purchasing powers of the different strata of society. So who provides these loans and financing in our economy?
There are different types of financiers in the financial services industry, they include:
Out of the available options for financing, banks and NBFCs are the more prominent and organized ones in the market as far as business or retail loans are concerned. NBFCs perform similar functions to a bank but there are a few differences between the them. While an NBFC provides lending services and may or may not accept deposits, a Bank does the same and in addition it provides CASA facilities to their customers. CASA facilities stand for current account and saving account facilities. Generally, opting for an NBFC for a loan means quicker process and approval. This is primarily because the licensing agreements as well as terms and conditions are liberal for an NBFC as compared to a bank, hence, they are nimble in nature and quick to respond.
NBFCs were established to provide finance to financially excluded sections of the society, but with growing business opportunities which require faster finances, many prefer to borrow money from an NBFC instead of a bank. Differences between NBFCs and banks explained in various financial articles often highlight that the interest rates of an NBFC could be little higher than that of a traditional bank, this is a small price you pay for easier and faster loan processing with simpler documentation.
Now that we know the broad differences, there are some additional points to keep in mind when choosing the right financier:
To gain complete knowledge about the turnaround time and approval process the applicant should check the online reviews posted by customers. Further, it is advisable to scan recent news about the financier, negative news like adverse action from the regulator should be a red flag. This will give an insight into the financier and you will know what you are in for.
Choose the financier with the most positive results from your research. For the financier, you should not be a one-time customer; they should aim to build a fruitful relationship with you. This can be ascertained with a little online research and comparison among different lenders. Do not settle for the first company that comes your way. Ensure that the terms and conditions of the financier are suitable to you and then make the big decision for your financing.
Hero Fincorp offers a wide range of financial products including Personal Loans for personal needs, Business Loans to support business growth, Used Car Loans for purchasing pre-owned vehicles, Two-Wheeler Loans for bike financing, and Loan Against Property for leveraging real estate assets. We provide tailored solutions with quick processing, minimal paperwork, and flexible repayment options for smooth and convenient borrowing experience.