NBFC vs Bank Home Loan

Whenever you think of buying a home then without a loan it is not possible to fulfill this dream. If you apply for a home loan then there are many NBFCs and banks that lend home loans at an attractive rate of interest. But many individuals don’t know the difference between NBFC vs Bank Home Loan. Both of them are quite different from each other. The rate of interest might also vary between an NBFC Home Loan and Bank Home Loan. Therefore, we will compare both NBFC and Bank Home Loan. In this article to give you a clear picture of the loan. The interest rates offered by NBFCs are quite higher than the Banks. But banks offer you different schemes on home loans.

Comparison of NBFC Home Loan and Bank Home Loan

In the table given below, you can point out the major differences between the Home Loan from an NBFC and a bank.

Basis of DifferenceNBFC Home LoanBank Home Loan
RegistrationNBFCs are registered under the Companies Act 1956Banking Institutions are registered under RBI Banking Act 1956.
ServicesYou can avail of loans from an NBFC including Home Loans but you can deposit money in FDs, RDs, Savings Accounts, and Current Accounts.Banks give you home loans and you can also have deposits with the bank in the form of Fixed Deposits, Recurring Deposits, Savings accounts, and Current Accounts.
Cash Reserve RatioWhen NBFCs lend home loans, they don’t have to maintain CRR with RBI or any other institutions. They give you home loans from their capital and no restrictions are made from the RBI.The banks have to maintain CRR with the Reserve Bank of India and when they lend excess home loans they have to increase the CRR with the RBI. RBI monitors all the banks when they lend loans to their customers.
Interest RateThe interest on NBFC home loans is decided by the NBFC itself. Usually, the interest rate is based on the Prevailing rates in the market. The borrower can negotiate the interest rate if he is borrowing a home loan from an NBFC.- The interest rate on home loans is regulated by the Reserve Bank of India and they are linked to RBI’s Repo Rate. The rate may fluctuate if the RBI increases or decreases the repo rate.
- RBI Changes Repo Rates due to the economic condition of the country.
TenureThe NBFC can give you a repayment tenure of up to 20 to 25 years. But the repayment tenure of the NBFC home loan is low in comparison with the Bank Home Loan.The banks offer you a long tenure for the loan repayment for up to 30 years. You will get a high tenure on your home loan if you are borrowing it from the bank.
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You have seen all the major differences between NBFC vs Bank Home Loan. And now you can choose the one as per your needs. Both the institutions have unique offers on home loans and different interest rates. We have compared both the loans and now the ball is in your court. You will have to choose the institution that suits you better for borrowing a home loan.

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  • Home Loan Interest Rates October 2022
    Axis Bank7.60% - 8.05%
    Bank of Baroda7.45% - 8.80%
    Citibank6.65% - 7.40%
    HDFC8.10% - 9.10%
    ICICI Bank7.10% - 8.85%
    Indiabulls Housing Finance Limited8.65%
    Kotak Bank7.99% - 8.60%
    LIC Housing8.00% - 9.25%
    Piramal Capital & Housing Finance10.50%
    PNB Housing Finance8.00% - 10.70%
    Reliance Home Finance8.75% - 14.00%
    State Bank of India/SBI8.00% - 8.55%
    Tata Capital7.75%