How safe is it to take secured loan from outside the bank
by Finway FSC Empowering People FinanciallyA continuous flow of adequate funds in the pipeline is the
pre-requisite of making the business system functional in every aspect. Whether
the firm is in its initial stage or has already been a long player in the
industry, a project in its initial stages or in the developmental phase all
these stages require ample financial backup to keep up with their growth
momentum in the markets. And with so many financial institutions both banking
and non-banking ones offering lucrative fund options the process of zeroing
adequate funding becomes quite a tough challenge to be met. Borrowers are stuck
in making a choice amongst the NBFCs and banks or either while selecting one
amongst the secured loans like mortgage
loan against property and the unsecured loans like unsecured
personal loan.
Hassle-free
and stress-free borrowing
The boundaries between the industries are blurring out and
there’s a great storm of startups and small to medium-sized enterprises (SMEs)
protruding up in the market with little to no credit scores. And as per the
recent industry reports SMEs will need around $650 billion on yearly basis for
sustained business operations and mainly for growth capital. In such a case,
the traditional process of taking loans from the banking firms turns out to be
a lengthy, tedious and confusing as the functional set can’t be determined
easily. Hence, making the new-age businessmen avoid lending from the bank mode
and go for NBFCs that offers much easy loan process with least of hassles and
best of EMI options.
Availability
at low-interest rate
Secured
loans are termed best for supporting the tremendous wave of startups that
has hit the nation. And, the tailor-made borrowing options, as well as lower
interest rates offered by NBFCs, have brought most of the nation’s SMEs up
close with their secured loans instead of that from the banking institutions.
Earlier more than half of the SME sector was dependant on the self-financing
options like gold loans which were characterized by high-interest rates but
after the government’s intervention into the subject, the banks took various
initiatives to help out these firms. Still, not much changed in the lending
fundamentals and there remained a huge gap between the requirement of funds and
the availability of funds in the market. However, with the emergence of NBFCs
the gap is filling up, fast; these firms are offering the new generation of SME
with tailor-made secured loans as per their appetite for business expansion
plans or new business set-up plans.
The secured loans by NBFCs are being provided at competitive
rates much lower than the traditional banking firm’s EMIs. The availability of
cheaper loan products has enabled the young entrepreneurial minds to believe in
their skills and put on their strengths to test with the best of their efforts.
On an overall, this has boosted up the economy with a significant job creation
capacity of around 1.3 million jobs per year and hence, employing around 60
million people. Unlike banks, the NBFCs are spread all throughout the length
and the breadth of the country and helping them out with their finances but it
is the Tier-II and Tier-III countries that have been benefitted the most.
Feeling the
tenor
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Created on Oct 20th 2018 01:47. Viewed 289 times.