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What is an NBFC personal loan?

An NBFC personal loan is an unsecured loan given by a non-banking financial company. NBFCs do not provide banking services, but they offer various financial services, including loans and credit. The RBI regulates NBFC personal loans, which are popular for their greater flexibility compared to other bank loans.

Is an NBFC personal loan better than a bank personal loan?

A person looking for credit can approach a bank or an NBFC. While most people go to banks for personal loans, some prefer NBFCs for the benefits they offer. First, NBFCs’ eligibility criteria are simpler than banks’. While most banks want a good CIBIL score of 750 or above to approve loans,  NBFCs have a lower credit score criterion of 650 or above.

NBFCs are less strict than banks, so their loan processing and disbursement are faster. They are approached mainly by borrowers with larger or unique loan requirements. Flexibility is a significant benefit provided by NBFCs, allowing borrowers to decide their loan amount and tenure. However, a personal loan from an NBFC may carry a higher interest rate.

Key features and benefits of an NBFC personal loan

Choosing an NBFC for an online personal loan can work in favour of the borrower as it offers the following benefits:

• Easy loan processing: NBFCs have simpler verification and basic documentation processes, enabling quicker loan processing. Most companies have a digitised process in place.
• Simpler eligibility criteria: Qualifying for an instant personal loan from an NBFC is easier, as their eligibility criteria are simpler.
• Customised: NBFC personal loans are more personalised, offering specific products that suit individual needs.
• Flexible: Applicants can also pick EMI options or loan tenures to suit their repayment preferences.

NBFC personal loan eligibility criteria: Who can apply?

Most bank loans are available only for those with a stable income source and a good credit score of 750 or above. NBFC instant personal loans come with easier criteria and can be availed of by salaried individuals, self-employed people, first-time borrowers, and those with a moderate CIBIL score. Some basic requirements that an applicant should meet include: ​

• Residential status: Applicants should be citizens of India. Non-resident Indians (NRIs) can also apply for these loans.
• Applicant’s age: NBFC personal loans can be availed by applicants aged 21-70.
• Employment requirement: NBFCs accept applications from individuals with diverse employment profiles, including salaried and self-employed individuals, as well as employees of public- and private-sector companies.
• Income requirement: Different NBFCs offering personal loans have varying income criteria, but those earning ₹15,000 per month may qualify
• Credit score limit: NBFCs provide loans for applicants with a minimum credit score of 600-650.

How to apply for an NBFC personal loan online through Urban Money?

Urban Money offers a quick online NBFC loan application. After deciding on a loan amount, interested borrowers can follow this step-by-step process:

• Confirm eligibility: Use the personal loan eligibility calculator and enter basic details such as name, contact, loan amount, tenure, etc.
• Apply: Select the loan product and click on ‘apply now’. Submit the form by providing name, phone number, city and other relevant details as required.
• Provide documents: Supporting documents must be submitted to the lender, including identity, address, and income proofs.
• Get instant assistance: Loan applicants will receive expert support. After the initial verification, the lender issues a sanction letter.
• Accept loan: After verification is complete and the borrower accepts, the lender will send the loan amount to the borrower’s account.

Documents required for NBFC personal loan

When NBFC personal loan applicants apply for a loan, they are required to furnish some supporting documents to the lender, such as:

• Application form: The form should be completed with relevant details, including recent passport-size photographs.
• Identity proofs: The applicant should provide one of the following identity proofs: Aadhaar Card, PAN, Voter’s ID, Driving Licence, Passport, etc.
• Address proofs: These include Aadhaar card, Voter’s ID, Driving licence, and utility bills.
• Income proofs: Lenders may ask for a bank statement for at least six months.
• Salaried professionals may need to provide recent three-month salary slips and Form 16/ITR for the last three years. Self-employed individuals may need to provide tax returns, profit-and-loss statements, business registration documents, etc., to obtain a personal loan from an NBFC.

How to calculate NBFC personal loan EMI?

NBFC personal loan EMIs are computed in the same way as banks,  based onthe following formula:

EMI = [P × r × (1 + r)^n]/[{(1 + r)^n} – 1]

Urban Money provides an online Personal Loan EMI calculator that lets prospective borrowers enter their loan amount, loan tenure, and interest rate to get a precise estimate of their monthly EMI.

Pro Tip: See how loan amount and tenure affect your monthly budget with our Personal Loan EMI Calculator.

NBFC personal loan interest rates

Compared with banks, NBFCs offer personal loans at higher interest rates. While bank loans are available at an interest rate of 9-10%, NBFC personal loans are offered at interest rates of 11% to 20-40% based on the borrower’s profile. Various factors affecting NBFC personal loan interest rates include credit score, income stability, loan amount, etc. Further, processing fees and charges for NBFC personal loans range from 2% to 4%. RBI rules govern prepayment and foreclosure charges for NBFC personal loans. These charges do not apply to floating-rate loans.

How to improve the chances of NBFC personal loan approval?

Prospective borrowers can increase their chances of NBFC personal loan approval by maintaining financial discipline and putting some effort in:

• Maintaining a good credit score of 700 or above
• Fulfilling the eligibility criteria of the specific lender
• Having a stable income level and employment
• Keeping their other EMI and credit card dues to a minimum

RBI guidelines for NBFC personal loans

In 2025, the RBI introduced new guidelines for personal loans to protect borrowers’ interests and ensure transparency. It is no longer compulsory for lenders like NBFCs to offer a fixed interest rate product across all equated instalment-based personal loan categories. Another key change in the guidelines, aimed at greater transparency, is that lenders must now disclose overall borrowing costs for their various loan products.

List of Top NBFCs offering personal loans in India

The table below presents NBFC personal loans, including their interest rates and applicable processing fees for applicants.

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