Co-Lending Boom: Will Your Loan EMI Get Cheaper?

When big banks team up with NBFCs through co-lending deals, they can offer cheaper loans to more people. Here's how this banking trend could lower your EMI and widen your access to credit.

Here's what happened: Banks and NBFCs are increasingly signing co-lending partnerships to jointly fund retail and MSME loans at blended interest rates.. Under RBI's co-lending model, banks take 80% of the loan on their books while the NBFC retains 20%, sharing risk and reward.. This structure lets borrowers — especially those underserved by big banks — access formal credit at lower rates than pure NBFC loans..

What you should do: Compare your current personal or home loan rate against co-lending products offered by your bank's NBFC partners — savings can be 0.5–1.5%.. Check your CIBIL score now: co-lending schemes still require a minimum score (usually 700+), so fix errors before applying.. Ask your lender specifically if they offer a 'co-lending' or 'co-origination' loan product — many banks don't advertise it upfront..

Co-lending loans often carry the bank's lower interest rate on 80% of your principal — meaning your effective EMI can be noticeably cheaper than a standalone NBFC loan, even for the same tenure.