NBFC Education Loan - Top Best Loans in India (2024)

NBFC Education Loan in India

An education loan works differently from other loans for things like buying a house or personal expenses. The repayment process usually takes place after you finish your studies and get a job. Many aspiring students apply to get an education loan for domestic as well as international studies. However, how to decide between opting for a bank loan or a non-banking financial company.

Before we talk about what NBFCs are, know that in the last few years, NBFC education loans have experienced an ongoing significant growth. Major contributors to this are the abroad education loans. 

 In this article, we will talk about different factors related to loan options offered by NBFCs in India, thus giving you a better picture of which loan option is best. Ultimately, you can choose the right one for funding your foreign education.

Also, check out complete guide to  Education Loan for MS Abroad 2024: Financing options for MS in the USA,  Germany, and India. Secure your future studies!

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What are NBFCs? 

NBFCs (Non-Banking Financial Companies) in India are financial entities that provide financial and lending services to consumers, as an alternative to traditional banks. They are categorized separately from banks primarily because traditional banks utilise demand deposits from consumers, to in turn, lend money to the borrowers. On the other hand, NBFCs use their funds raised from investors and other financial institutions to lend to the borrowers.

NBFCs providing education loans specifically focus on financing higher education expenses for students. They often provide more flexible terms and conditions compared to traditional banks, making education loans more accessible to students from diverse financial backgrounds.

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Top 5 NBFC Education Loans Interest Rate

1. Avanse Education Loans:

They are dedicated to providing easy loans for Indian students aiming to pursue studies abroad. Here are the specifics of Avanse's student loans:

Loan Details:

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2. HDFC Credila Education Loans:

HDFC Credila is a leading education loan provider in India. It was founded to empower students to pursue higher education abroad. Notably, HDFC Credila offers loan approval even before admission confirmation. This may provide early financial assistance to students. Here are the details of HDFC Credila's student loans:

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3. Auxilo Education Loans:

Auxilo has quickly become the top financial support for students. Here are the details of Auxilo's student loans:

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4. InCred Education Loans:

InCred caters to the educational financing needs of aspiring students. Here are the details of InCred's student loans:

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5. Eduvanz:

According to Eduvanz

• Maximum loan amount: between 8–15 lakhs,
• Repayment tenure: 60 months.
• Interest rate can range: 15–45%.

Eduvanz's charges may include:

• Forex charges: 2% plus taxes
• Processing fee: Up to 2% plus taxes

Eduvanz's terms and conditions state that they are not obligated to refund any registration, upfront, processing, or any other fee.

In short,

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Hassle Free Education Loans. Disbursal in Just 7 Days. Apply Now!

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Features of NBFC Education Loans

NBFCs offer education loans with specific features tailored to meet the financial needs of students pursuing higher education. Here are some of those key features:

1. Loan Amount and Coverage

NBFCs typically offer education loans covering tuition fees, exam fees, hostel charges, books, equipment, and other related expenses. The loan amount can vary based on the course pursued, institution reputation, and collateral provided, if required. 

2. Repayment Terms

Repayment schedules for education loans from NBFCs are flexible, often allowing a grace period post-completion of the course before the repayment begins. This period is known as the “Moratorium Period”. 

3. Collateral Requirements

Depending on the loan amount and policies of the NBFC, collateral may be required. This could include tangible assets like property, fixed deposits, or third-party guarantees.

4. Loan Processing and Disbursement

NBFCs streamline the loan application and approval process, typically requiring minimal documentation compared to traditional banks.

Hence, the disbursement of funds is much faster upon verification of eligibility requirements. 

5. Additional Benefits

Some NBFCs may also offer additional benefits such as insurance coverage for the borrower or special schemes in collaboration with educational institutions or employers.

6. Eligibility Criteria

Eligibility criteria for education loans from NBFCs differs across lenders and includes factors like academic performance, course duration, employability prospects, and co-borrower/guarantor details.

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NBFC Education Loan without Collateral

An education loan is money given by banks or NBFCs, to people who want to go to a college or university. This capital is meant to help pay for belongings like education charges, housing, books, and other academic expenses.

NBFCs, in most cases, offer education loans without requiring collateral, making them accessible to students who may not have substantial assets to pledge.

In such cases, these loans are granted based on the applicant's creditworthiness, academic record, and potential future earnings rather than requiring assets as collateral.

However, for an education loan without collateral, applicants need to meet specific eligibility criteria such as academic performance, course duration, and potentially having a co-borrower or guarantor with a stable financial background.

These loans cater to students seeking financial assistance for higher education without the burden of providing collateral, facilitating easier access to education financing in India.

To know more, explore collateral free education loans - check list of banks, eligibility, documents required,  how to choose the right loan and get your application approved.

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NBFC Education Loan Eligibility

While specific conditions may vary slightly between NBFCs, some general eligibility criteria for benefiting from an education loan from an NBFC include

1. Age: Generally, between 18 and 35 years old.
2. Nationality: Must be an Indian citizen.
3. Educational Background: A good academic record in former studies, demonstrating the capability for academic success in the chosen program.
4. Admission Confirmation: An acceptance letter from an honored university/ council for the asked course, attesting registration and course legitimacy.
5. Co-applicant: A cosignatory with a stable income is often obligatory. It often provides added security to the lender.

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12th Marks Based Approvals. No Collateral Required. Apply Now!

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Also, check out the eligibility for education and student loans?

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Documents Required for NBFC Education Loan

The documents required for NBFC education loan might differ across lenders and the kind of courses. However, the most common documents required are as follows: 

1. For the Applicant

1. Duly filled and signed loan application form. 
2. KYC Documents that include ID Proof, Address Proof and Signature Proof. The acceptable KYC documents are PAN, Passport, Voter ID, Aadhar Card, Driver’s License, or any other government issued identification document.
3. Past academic record that includes all previous marksheets and pass certificates.
4. Entrance exam results for the concerned course. 
5. Admission proof in the concerned institute. 
6. Passport size photographs
7. Statement of Expenses

2. For the Co-Applicant

1. KYC Documents- same as for applicant
2. Bank account statement of the last 6 months
3. In case of any existing loan, the loan account statement for the previous 1 year. 
4. Income documents as mentioned further. 

Income Documents for Salaried Co Applicant

1. Salary slips for last 3 months
2. Last 2 years Form 16 copy
3. Statement of assets and liabilities
4. Last 6 months bank account statement

Income Documents for Self Employed 

1. Business Address proof
2. Last two years IT returns
3. TDS certificate (Form 16A, if applicable)
4. Certificate of qualification ( for professionals)
5. Statement of assets and liabilities
6. Last 6 months bank account statement
   

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Types of Courses Covered by NBFC Education Loans

A. Traditional Degrees

1. Undergraduate Programs: It covers bachelor's degrees that typically last for four years. NBFCs usually provide loans for these undergraduate programs. They should be offered by recognized universities and colleges in India.
2. Postgraduate Programs: These are advanced programs that offer Master's degrees. They allow students to specialize in specific fields. NBFCs often support postgraduate programs in diverse disciplines.

B. Professional Courses

1. Management Courses: These programs prepare individuals for managerial roles in organizations. They include MBAs and operations. NBFCs offer loans for management education to meet the request for skilled experts.
2. Law Courses: These programs train students to become lawyers or pursue legal careers. NBFCs typically finance LLB degrees and certificate courses in specific legal areas.
3. Medical Courses: These programs offer degrees like MBBS postgraduate medical degrees. NBFCs may support various medical courses, depending on their internal policies.
4. Engineering Courses: These programs focus on technical knowledge needed for different engineering disciplines. NBFCs often provide loans for BE/B. Tech degrees and postgraduate engineering programs.

C. Skill Development and Vocational Courses

1. Vocational Courses: It substitutes short-term programs that provide job-oriented skillfulness. NBFCs recognize the importance of vocational education and offer loans for such courses.
2. Certificate Courses: Many programs offer specialized skills in specific areas within a field. NBFCs may finance certificate courses that complement traditional degrees. It also caters to specific skill development needs.

D. Study Abroad Programs

International Undergraduate and Postgraduate Programs: These programs allow students to obtain degrees from universities outside India. NBFCs offer loans for study abroad programs. They often consider factors like the university's reputation and the overall cost of living in the destination country.

It is important to research specific NBFCs and their loan offerings. Pupils should do this as eligibility criteria and course coverage may vary. Contacting the NBFC directly can help clarify any doubts and ensure suitability for educational goals.

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Factors to Consider While Taking NBFC Education Loans

1. Loan Amount:

The maximum amount of capital from NBFCs for education loans can vary a lot. It depends on:

• which NBFC you go to
• what course you want to study
• your personal details.

But usually, you can borrow anywhere from Rs. 4 lakhs to Rs. 40 lakhs. Sometimes, NBFCs may even offer higher amounts for specific cases.

2. Interest Rates:

The interest rates on education loans from NBFCs are usually higher. This is because NBFCs cover students who might not have a long credit history. The interest rates can be between 10% to 17% per year. These rates can change depending on things:

• your credit scores
• the course you're studying
• how much money you're borrowing

3. Repayment Terms:

Reimbursing the education loan usually takes around 5 to 10 years. Some NBFCs might give you a break from paying back the loan while you're still studying. This is called a moratorium period.

Visit Propelld if you're thinking about getting an education loan. They present some of the best rates in the country. Also, they try to make the reimbursement easier. They have different repayment plans to fit what each student needs.

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Comparison Table - Banks vs Non-Banking Finance Companies (NBFC)

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Click here for Higher Chances of Approval than Banks - Propelld Education Loan

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List of Banks Providing Education Loans in India

1. Andhra Bank
2. Allahabad Bank
3. Axis Bank
4. Bank of Baroda
5. Bank of India
6. Bank of Maharashtra
7. Canara Bank
8. Central Bank of India
9. City Union Bank
10. Corporation Bank
11. Dena Bank
12. Dhanlaxmi Bank
13. Federal Bank
14. HDFC Bank
15. Indian Bank
16. Indian Overseas Bank
17. IDBI Bank
18. Jammu And Kashmir Bank
19. Karnataka Bank
20. Karur Vysya Bank
21. Lakshmi Vilas Bank
22. Oriental Bank of Commerce
23. Punjab & Sind Bank
24. Punjab National Bank
25. Saraswat Bank
26. South Indian Bank
27. SBBJ Bank
28. State Bank of Hyderabad
29. State Bank of India
30. State Bank of Patiala
31. State Bank of Travancore
32. Syndicate Bank
33. Tamilnad Mercantile Bank
34. UCO Bank
35. Union Bank of India
36. United Bank of India
37. Vijaya Bank

Learn about the  education loan moratorium period, a time when payments are temporarily paused. Find out how it can help manage finances and what you need to know during this period.

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‍Hassle Free Education Loans, Disbursed 10 Times Faster than Banks. Apply Now!

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List of Non-Banking Finance Companies providing education loans in India -

• Propelld Education Loan
• Eduvanz Education Loan
• Avanse Education Loan

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If you are considering an educational loan, check Propelld today! It is an NBFC that offers the best rates in the market. They offer services like:

• Loans without needing any collateral
• Options for delaying payments
• Quick and simple online application process

Propelld understands the difficulties students encounter in funding their education. We aim to offer repayment plans that fit each student's needs. So, contact us today if you are going to apply for an education loan, we'll help you out!

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FAQs About NBFC Education Loans

Who can get an education loan from an NBFC?

Generally, any student who is:

1. Between 18 and 35 years old
2. An Indian citizen
3. Have good grades and be accepted into a college (in India or abroad)
4. Have someone with a good income co-sign the loan (sometimes)

What can you borrow, and how much does it cost?

You can borrow a few lakhs to several lakhs. The Interest rates can be between 10% and 17% per year. It may depend on your credit score and loan amount.

Do I have to start paying back while I study?

Not always. Some NBFCs let you wait until after you graduate or get a job. Others might require you to pay some interest during your studies.

What documents do I need to apply?

This can vary, but generally, you'll need the following:

1. ID proof
2. Address proof
3. College admission letter
4. Grades
5. Co-signers income proof (if needed)
6. Proof of any security offered (if applicable)

I have an existing education loan in a bank. Can I transfer it to an NBFC?

Yes, you can transfer your existing education loan from bank to NBFC. You can contact the NBFC, finish the required documentation and process to transfer your loan balance. 

Do NBFCs provide an education loan if the co-applicant has an irregular income?

Co applicant’s income is one of the major factors in unsecured education loans. Hence, if the co applicant has an irregular income, the loan might get rejected. However, you can always go for a secured education loan in such cases. 

Is it safe to take an education loan from NBFC? 

Yes, with the ongoing  progress the NBFCs in the education loan sector have made and are still making,  they occupy a major portion of the education loans market. It is absolutely safe to borrow education loans from NBFCs if the eligibility and the interest rates are aligned with your preferences. 

Can I get an education loan from an NBFC with a  low CIBIL score? 

Yes, NBFCs do provide education loans even if your CIBIL score is less. They verify other details too like your academic records, the promising future, your co applicant details etc. 

Is an NBFC registered under RBI? 

Yes, NBFCs, as financial institutions, are registered under RBI. Propelld is a RBI registered NBFC that can provide you hassle free education loans.