Education Loan

NBFC Education Loan for Abroad Studies

NBFC Education Loan for Abroad Studies

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Looking to avail an educational loan from an NBFC? Click now to get all details about education loan from NBFC without collateral, advantages of NBFC education loans & more!

GyanDhan
Ananya Ghai
Updated on:  07 Jun 2024  | Reviewed By: 
Aman 
| 31.5K | 9  min read

According to the Global credit rating agency CRISIL, NBFC education loans are projected to experience a significant growth of up to 40% in the financial year 2023-24. Specialised business models and the increasing number of students traveling abroad have raised the demand for education loans.

Over 90 per cent of the education loans are for studying abroad, with India-based courses accounting for the rest.

 

  1. What are NBFCs?
  2. Best NBFC for abroad education loans
  3. Features of education loans from NBFC
  4. Eligibility criteria of Education loans from NBFCs
  5. Documents required from NBFCs
  6. Advantages of education loans from NBFCs
  7. Disadvantages of Education loans from NBFCs
  8. Education Loan from NBFCs via GyanDhan
  9. Frequently asked questions

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What are NBFCs?

NBFCs (Non-Banking Financial Corporations) provide financial services and lending options as an alternative to traditional banks. The key distinction between banks and NBFCs is that banks primarily use customer deposits to lend money, whereas NBFCs raise funds from investors, financial institutions, and banks to offer loans to customers.

Due to lighter regulations, NBFCs often offer more flexibility to their customers. 

Check Your Education Loan Eligibility

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Best NBFCs for abroad education loans 

HDFC Credila, Avanse, Auxilo, and InCred are the best NBFCs for education loans in India. Below is a comparison of the best NBFC education loan without collateral:

NBFC Loan amount NBFC interest rates Processing fee

HDFC Credila

INR 75 Lakh

11.25 - 13%

0.5 - 1.25%

InCred

INR 60 Lakh

12.25 - 14%

1 - 2%

Avanse

INR 75 Lakh

12.25 - 13.5%

0.5 - 2%

Auxilo

INR 65 Lakh

11.25 - 14%

0.5 - 2%


*Repayment during studies for all the NBFCs mentioned above is simple interest or partial simple interest

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Features of education loans from NBFCs

Abroad education loans from NBFC are financial aid designed for students who wish to study abroad. These loans are usually unsecured loans and cover tuition fees, living expenses, travel expenses, and other study-related expenses. NBFCs offering abroad education loans typically have specific eligibility criteria, including academic performance, course selection, and the reputation of the foreign institution.

The interest rates, repayment terms, and loan amounts offered may vary across NBFCs. They take into consideration several factors before approving the loan. These factors are:

 

Tips for a Smooth Loan Experience

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Eligibility criteria of abroad education loans from NBFCs

To be eligible for education loan from an NBFC, a student must meet the following criteria:

  1. The student must be an Indian citizen
  2. The student must be between the ages of 18 and 35 years
  3. The student must have a good academic record
  4. The student must have secured admission to a recognized university or college abroad
  5. The student must have a co-applicant who has a steady source of income and a good credit score
  6. The student must have scored decent scored in pre-requisite exams such as IELTS, TOEFL, and GRE.

 

 

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Documents required for abroad education loans from NBFCs

The documentation required for NBFC education loan without collateral varies depending on the lender. However, some common documents that are usually required include

Applicant's documents

  1. Proof of admission to a recognized university or college abroad
  2. KYC documents of the student: PAN/ Passport/ Driver’s License/ Voter ID card or government-issued identification document.
  3. Education loan application form.
  4. Passport
  5. Past academic record.
    1. 10th standard mark sheet
    2. 12th standard mark sheet
    3. Undergraduate result (semester-wise)
  6. Entrance exam results (e.g. GMAT, GRE, TOEFL, etc.)
  7. Proof of admission: admission letter (A conditional admission letter is also applicable).
  8. Statement of expenses.
  9. 2 passport-size photographs.
     

Co-applicant documents

  1. KYC documents: PAN/ Passport/ Driver’s license/ Voter ID card or government-issued identification document.
  2. Bank account statement of the co-borrower/guarantor, for the last 6 months (in case of takeover of education loan).
  3. If any previous loan is from other banks/ lenders, then the loan A/C statement of 1 year.


Income proof for salaried co-applicant/guarantor

  1. Salary slips for the last 3 months.
  2. Copy of Form 16 of the last 2 years or copy.
  3. Bank account statement for the last 6 months (Salary account).
  4. Brief statement of assets & liabilities of parent/ guardian/ other co-borrower.


Income proof for self-employed co-applicant/guarantor

  1. Business address proof.
  2. Last 2 years IT returns ( If IT Payee).
  3. TDS certificate (Form 16A, if applicable).
  4. Certificate of qualification (for C.A./ doctor and other professionals).
  5. Brief statement of assets & liabilities of parent/ guardian/ other co-borrower
  6. Bank account statement for the last 6 months.
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Advantages of abroad education loan from NBFC

Advantages Description

No collateral required

Students do not need to provide any assets as collateral for the loan.

Flexible repayment options

Repayment periods of 10-15 years, providing students with ample time to repay the loan.

Quick processing

Streamlined loan processing system, ensuring students receive the loan amount promptly.

More colleges and expenses covered

Cover various expenses, including tuition fees, living expenses, travel costs, and more.

Customizable loans

Loan products to cater to the unique requirements of students, offering flexibility in loan terms.

Pre-approval of education loans (selective)

Pre-approval of loans before admission, saving time and offering financial assurance to students.

Merit-based loans

Consider academic performance and the chosen course's employability prospects when approving education loans.


 

Calculate your Education Loan EMI

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Disadvantages of abroad education loan from NBFCs

Disadvantages Description

Higher interest rates

Generally have higher interest rates compared to public and private banks.

High processing fees

Processing fee of 1-2% of the loan amount, increasing the overall cost of the loan for students.

Co-applicant requirement

Require a co-applicant with a steady income and good credit score, which can be challenging for students.

No tax benefits

Do not offer tax benefits under section 80E for education loan interest.

Excluded from government schemes

Not eligible for government schemes that provide benefits on education loans, unlike banks.

Include hidden charges

May impose various hidden charges, such as bounce charges, prepayment charges, and penalty charges.

 

Pro Tip: Situations where NBFCs are a perfect option for an education loan

 

NBFC education loans offer an alternative financing option for students pursuing higher education. These loans cater to the needs of individuals who may not qualify for traditional bank loans or government-sponsored educational funding. While exploring education loan options, it is essential to consider the terms and conditions associated with NBFC loans.

This includes being aware of additional charges such as processing fees, prepayment charges, and penalty fees. Properly understanding and comparing these factors will empower borrowers to make informed decisions and choose the loan that best suits their needs.

Read more about:

  • list items Study abroad scholarships for Indian students
  • list items Abroad education loan without parental income
  • list items Documents required for education loan
  • list items Expenses covered under education loan
  • list items Abroad  education loan by the Indian government
  • list items Abroad education loan without collateral
  • list items Abroad education loan with collateral
  • Check Your Education Loan Eligibility

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    Education Loan from NBFCs via GyanDhan

    When considering education loans from NBFCs, GyanDhan offers a seamless and transparent process, making the entire loan application and disbursement journey hassle-free. The expert education loan counsellors at GyanDhan compare the loan products of different lenders to identify the most suitable loan option for your needs. This involves comparing the interest rates, loan amounts, repayment terms, processing fees, and other features of different lenders.

    Not only this, we stand by our promise to offer you the most competitive education loan in the market. We bring the best deal possible for you. If you find a better offer, we'll cover the difference in interest rates for the ENTIRE duration of your education loan. Best of all? We do not charge any kind of fees or commissions from the applicants at all.

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    Frequently asked questions

    Which are the top NBFCs for an education loan in India?

    Some of the best Non-Banking Financial Corporations (NBFCs) in India that focus on lending educational loans are:

  • list items Incred
  • list items Avanse
  • list items HDFC Credila
  • list items Auxilo
  • What are the NBFC interest rates for an education loan?

    The NBFC interest rates range from 11-13.5%.

    What are the repayment terms for an education loan from an NBFC?

    The repayment tenure for education loans from NBFCs is up to 15 years. Certain NBFCs offer flexible repayment options based on the applicant's financial profile.

    Can I transfer my education loan from NBFC to a bank?

    Yes, an education loan balance transfer from an NBFC to a bank is possible.

    What is the processing time for NBFC education loans?

    The processing time of NBFC education loans varies from lender to lender. Generally, it takes 7 - 15 working days to process an education loan. However, if you apply via GyanDhan, we can get your loan sanctioned within 4 - 5 working days if all your documents are in place. 

    Is HDFC Credila an NBFC?

    Yes HDFC Credila is an NBFC.

    What is the difference between an NBFC and Bank?

    Banks are authorized to accept deposits from the public, allowing individuals to open savings and current accounts. On the other hand, NBFCs can only provide lending services to citizens.

    Is it safe to take an NBFC education loan?

    Taking education loans from NBFCs is a viable financing option for students who seek unsecured loans of a bigger amount and their intended university is not listed by the banks. 

    Check Your Education Loan Eligibility


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