Quick Facts | ||
---|---|---|
Interest Rate | Processing Fees | Loan Margin |
Starts @ 11.25% | 0 (Up to 20 Lakhs) INR 750 per lakh (More than 20 Lakhs) |
15% |
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.
Table of Content
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.
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 |
INR 75 Lakh |
11.25 - 13% |
0.5 - 1.25% |
|
INR 60 Lakh |
12.25 - 14% |
1 - 2% |
|
INR 75 Lakh |
12.25 - 13.5% |
0.5 - 2% |
|
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
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:
To be eligible for education loan from an NBFC, a student must meet the following criteria:
Looking For An Abroad Education Loan?
Fill the form to get free expert help
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
Co-applicant documents
Income proof for salaried co-applicant/guarantor
Income proof for self-employed co-applicant/guarantor
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. |
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:
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.
<!--td {border: 1px solid #cccccc;}br {mso-data-placement:same-cell;}-->
Some of the best Non-Banking Financial Corporations (NBFCs) in India that focus on lending educational loans are:
The NBFC interest rates range from 11-13.5%.
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.
Yes, an education loan balance transfer from an NBFC to a bank is possible.
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.
Yes HDFC Credila is an NBFC.
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.
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.
About Author
Ananya Ghai
A post-graduate with over three years of expertise in the education abroad industry. Ananya has a knack for writing blogs. Previously, she has worked as an IELTS trainer and SOP writer. A passionate writer and a literature geek, describe her perfectly.