Co-Lending Explained: Could You Get a Cheaper Loan?

Banks like Bank of India are now teaming up with NBFCs to give you loans at lower rates. This co-lending model means better rates and easier access — especially if you're self-employed or have a thin credit file.

Here's what happened: Bank of India has launched a specialised branch in Mumbai focused on partnership-led lending — including co-lending with NBFCs and supply chain finance.. Co-lending allows a bank and an NBFC to jointly fund your loan, splitting the risk — RBI introduced this framework to push credit to underserved borrowers.. Supply Chain Finance and TReDS (Trade Receivables Discounting System) under this setup help small business owners and MSMEs unlock working capital faster..

What you should do: Ask your NBFC or bank if your loan is eligible for co-lending — you may qualify for a lower blended interest rate than a standard NBFC loan.. If you're a small business owner, check TReDS platforms (M1xchange, RXIL, A.TREDS) to discount your invoices and get faster working capital at lower cost.. Compare your current personal or business loan rate against co-lending products — a 0.5% rate difference on ₹25 lakh saves you over ₹75,000 across a 5-year tenure..

Under RBI's co-lending model, banks must take at least 20% of every loan on their books — this forces them to care about loan quality, which often means better underwriting and fairer terms for you.