Do I have to take a home loan from a bank? Are there any other lending alternatives available?

No. Banks are not the only lending institution in the country. Although it wasn’t the case a few years ago, there are multiple reputed lenders available now

You can avail of any loan, be it home, personal, car, education, etc from non-banking financial institutions (NBFCs) too. What’s important is that these lenders offer attractive interest rates and flexible lending terms and conditions as well.

Many borrowers get dejected when banks reject their loan applications thinking that banks are the only lending option available. But this couldn’t be farther from the truth.

List of NBFCs offering loans:

- Reliance Capital

- L&T Finance

- Mahindra and Mahindra Financial Services Limited

- Sundaram Finance

- LIC Housing Finance Limited

- Indiabulls Housing Finance Limited

- Power Finance Corporation Limited

- Bajaj Finserv

- HDFC

- Muthoot Homefin

While NBFCs are great lending alternatives to private as well as public banks, you must note that an NBFC could reject your loan for the very reason that a bank rejected it in the first place. For example, if your credit score is found to be wanting, then an NBFC, too, could reject your loan.

But this isn’t to say that you must not apply to an NBFC for a loan. This is because banks have far more stringent eligibility and loan approval criteria than NBFCs, so you stand a better chance of getting a loan approved from an NBFC vis-à-vis a bank.