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Raghuvamshi Kanukruthi
Mar 13, 2024

Discover Top NBFC Education Loans in India. Competitive Rates. Flexible Repayment. Find Your Ideal Loan Today!

NBFC Education Loan in India

Moving abroad for further studies can be expensive. But, the quality of education and the opportunities it offers are worth it. More and more learners prefer choosing to study abroad. Also, many of them are using educational loans to pay for it. These loans are helpful because pupils don't have to start paying them back right away. Instead, they begin making monthly payments once they finish their studies and start working. This makes education loans a popular choice for students looking to study overseas.

An education loan works differently from 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. Numerous pupils apply to get an education loan to study abroad. However, they often get confused about opting for a bank loan or a non-banking financial company.

In this article, we will talk about different factors related to loan options offered by NBFCs in India. So, at the end of this article, you'll have a better idea of which loan option is best. Ultimately, you can choose the right one for funding your foreign education.

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

NBFC Education Loan without Collateral

An education loan is money given by banks or companies that are not traditional banks, called NBFCs, to people who want to go to a college or university. This capitalist is meant to help pay for belongings like education charges, housing, books, and other academic expenses.

The main reason for getting an education loan is to help scholars and their families pay for college when they can not afford it on their own. With an education loan, pupils can get the capital they need to go to an academic institution. Now, they can achieve their academic ambitions without fussing too much about funds.

NBFCs are companies that offer banking-like services similar to loans. But, they do not have a banking license. They are not regulated in the same way as traditional banks but still have rules to comply with.

NBFCs are important because they deliver competitive loan options to scholars and their families. They offer flexible ways to pay back the loan, good interest rates, and easy ways to administer the loan. This makes it easier for scholars to get the capitalist they need for college.

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

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.

Also, you might need to submit a few documents for an NBFC education loan. 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)

Looking to know the eligibility for education and student loans?

Documents required for NBFC Education Loan

  • ID Proofs
  • Residence Proofs
  • Signature Proofs

Get a complete list  of essential.  Simplify the process and ensure a smooth application experience.

Different 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.

The Factors to consider in 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.

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:

Particulars Details
Loan Up to ₹60 Lakhs
Interest Rate 12.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 12 Years

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:

Maximum Loan Amount Up to ₹80 Lakhs
Interest Rate 11.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 12 Years

3. Auxilo Education Loans:

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

Loan Amount Up to ₹50 Lakhs
Interest Rate 12.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 10 Years

4. InCred Education Loans:

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

Loan Amount Up to ₹65 Lakhs
Interest Rate 12.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 10 Years

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,

Bank Loan Interest Rate Processing Fees Repayment During Course Repayment Tenure
Avanse Education Loans Up to ₹60 Lakhs 12.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 12 Years
HDFC Credila Education Loans Up to ₹80 Lakhs 11.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 12 Years
Auxilo Education Loans Up to ₹50 Lakhs 12.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 10 Years
InCred Education Loans Up to ₹65 Lakhs 12.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 10 Years
Eduvanz Up to ₹15 Lakhs 15% - 45% per annum Not specified Not specified 60 months

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

Comparison Banks - Public and Private Sector Non-Banking Finance Companies (NBFC)
Course Flexibility

Banks offer education loans to approved/reputed universities in India and abroad. The category of courses covered range from graduate, post-graduate, diploma, etc., mainly in the non-vocational streams.

Some nationalised banks offer education loans for vocational courses on a case-by-case basis.

Non-Banking Finance Companies are comparatively relaxed on the course types and offer education loans to a wider selection of courses across the globe.

Loan Coverage

Education loans sanctioned by banks cover the tuition fees, travel expenses, lab fees and exam fees, lodging fees, cost of books and equipment, library fees, caution deposit and all other related costs.

Education loans sanctioned by NBFCs cover 100% of the tuition fees, travel expenses, lab fees and exam fees, lodging fees, cost of books and equipment, library fees, caution deposit and all other related costs.

Loan Procurement

Banks have more stringent rules and regulations and mostly offer loans for courses that promise job prospects for the borrower.

When compared to banks, NBFCs have simpler terms and loan procurement is easier for offbeat courses chosen by the student.

Loan procurement is easier for offbeat courses chosen by the student.

Processing Time

Private banks approve loans faster when compared to public sector banks. Public sector banks sanction loans faster based on the relationship that the customer has with the bank.

Banks give quick approvals mainly for recognized courses.

Non-Banking Finance Companies are faster in sanctioning loans irrespective of the type of course.

Processing Fees

The processing fees charged by banks range between 0.5% to up to 2%.

The processing fees charged by Non-Banking Finance Companies range between 1% to up to 2%.

Government Subsidy

All banks offer interest rate subsidy for the weaker section of the society. This subsidy will be applicable during the moratorium period.

Interest rate subsidies are not available with Non-Banking Finance Companies.

Security Collateral

Banks require security collateral based on the loans amount.

For loans below Rs. 4 lakhs, no security is required.
For loans between Rs. 4 lakhs and Rs. 7.5 lakhs, third party guarantee.
Loans above Rs. 7.5 lakhs require tangible collateral security. Loans are approved based on the security provided by the customer.

Non-Banking Finance Companies ask for security based on the loan amount availed and also based on the credit history of the borrower.

Loan Amount

All public and private sector banks impose an upper limit on the loan amount ranging between Rs. 20 lakhs and Rs. 30 lakhs, based on the course and university selected. Depending on the requirement of the borrower, the loan amount sanctioned varies with each bank.

NBFCs do not have a cap on the loan amount sanctioned and structure loans based on the need of the student and the type of course enrolled for.

Charges

Borrowers availing education loans from banks have to pay charges like processing charges, documentation charges, bounce charges, swap charges, prepayment charges, late penalty charges, etc.

Borrowers availing education loans from NBFCs have to pay charges like processing charges, documentation charges, bounce charges, swap charges, prepayment charges, late penalty charges, etc.

Interest Rates

Interest rates are calculated by banks according to the current base rate of the bank. Education loan interest rates range roughly from 10% to 17%, depending on the lender.

Interest rates are calculated by banks according to the current base rate of the bank. Education loan interest rates are offered as floating interest rates by Non-Banking Finance Companies.

Moratorium Period

Private and public sector banks give a moratorium period or holiday period ranging from 6 months to up to 1 year.

Non-Banking Finance Companies give a moratorium period or holiday period of 6 months.

Repayments

Repayments for education loans got from banks can be done within 7 years. The interest repayment can start during the moratorium period and the principal repayment can be done as monthly installments after the borrower has got a job.

Repayments for education loans got from NBFCs can be done within 7 years. The interest repayment can start during the moratorium period and the principal repayment can be done as monthly installments after the borrower has got a job.

Documents required

Admission Letter
Loan Application Form
2 passport photographs
Study Cost Statement
PAN Card
Aadhaar Card
ID Proofs
Residence Proofs
Bank account statement for last six months
Income Tax Returns Statements
Statement of liabilities and assets
Proof of income
ID Proofs
Residence Proofs
Signature Proofs

Admission Letter
Loan Application Form
2 passport photographs
Study Cost Statement
PAN Card
Aadhaar Card
ID Proofs
Residence Proofs
Bank account statement for last six months
Income Tax Returns Statements
Statement of liabilities and assets
Proof of income
ID Proofs
Residence Proofs
Signature Proofs

Customised Services

Some private sector banks offer customised loan packages according to the needs of the borrower along with doorstep services. Additionally, some lenders also give pre-visa or pre-admission loan sanctions.

NBFCs offer special services like pre-visa or pre-admission loan sanctions, fast-track loans, bridge loans, GRE score based loans and certificate of availability of funds.

Pre-closure Charges

Most banks do not levy any pre-closure charges for education loans according to The Reserve Bank of India norms.

Non-Banking Finance Companies might levy pre-closure charges based on the reason for closure, tenure left and the borrower’s profile.

Concessions for Women

Most public sector banks offer concessions on interest rates for women borrowers.

This feature might not be available with Non-Banking Finance Companies.

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

List of Banks Providing Education Loans in India

  • Andhra Bank
  • Allahabad Bank
  • Axis Bank
  • Bank of Baroda
  • Bank of India
  • Bank of Maharashtra
  • Canara Bank
  • Central Bank of India
  • City Union Bank
  • Corporation Bank
  • Dena Bank
  • Dhanlaxmi Bank
  • Federal Bank
  • HDFC Bank
  • Indian Bank
  • Indian Overseas Bank
  • IDBI Bank
  • Jammu And Kashmir Bank
  • Karnataka Bank
  • Karur Vysya Bank
  • Lakshmi Vilas Bank
  • Oriental Bank of Commerce
  • Punjab & Sind Bank
  • Punjab National Bank
  • Saraswat Bank
  • South Indian Bank
  • SBBJ Bank
  • State Bank of Hyderabad
  • State Bank of India
  • State Bank of Patiala
  • State Bank of Travancore
  • Syndicate Bank
  • Tamilnad Mercantile Bank
  • UCO Bank
  • Union Bank of India
  • United Bank of India
  • 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.

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

Wrapping up

This list doesn't include all NBFCs that offer education loans in India. We suggest that to make the best choice, it's a good idea to compare things. You should inquire about interest rates and fees from different NBFCs. This will allow you to pick the right educational loan option. We hope that it fits your needs and budget.

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
  • give options for delaying payments
  • have a 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!

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

Raghuvamshi Kanukruthi
March 13, 2024
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March 15th 2022

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NBFC Education Loan in India

Moving abroad for further studies can be expensive. But, the quality of education and the opportunities it offers are worth it. More and more learners prefer choosing to study abroad. Also, many of them are using educational loans to pay for it. These loans are helpful because pupils don't have to start paying them back right away. Instead, they begin making monthly payments once they finish their studies and start working. This makes education loans a popular choice for students looking to study overseas.

An education loan works differently from 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. Numerous pupils apply to get an education loan to study abroad. However, they often get confused about opting for a bank loan or a non-banking financial company.

In this article, we will talk about different factors related to loan options offered by NBFCs in India. So, at the end of this article, you'll have a better idea of which loan option is best. Ultimately, you can choose the right one for funding your foreign education.

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

NBFC Education Loan without Collateral

An education loan is money given by banks or companies that are not traditional banks, called NBFCs, to people who want to go to a college or university. This capitalist is meant to help pay for belongings like education charges, housing, books, and other academic expenses.

The main reason for getting an education loan is to help scholars and their families pay for college when they can not afford it on their own. With an education loan, pupils can get the capital they need to go to an academic institution. Now, they can achieve their academic ambitions without fussing too much about funds.

NBFCs are companies that offer banking-like services similar to loans. But, they do not have a banking license. They are not regulated in the same way as traditional banks but still have rules to comply with.

NBFCs are important because they deliver competitive loan options to scholars and their families. They offer flexible ways to pay back the loan, good interest rates, and easy ways to administer the loan. This makes it easier for scholars to get the capitalist they need for college.

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

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.

Also, you might need to submit a few documents for an NBFC education loan. 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)

Looking to know the eligibility for education and student loans?

Documents required for NBFC Education Loan

  • ID Proofs
  • Residence Proofs
  • Signature Proofs

Get a complete list  of essential.  Simplify the process and ensure a smooth application experience.

Different 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.

The Factors to consider in 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.

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:

Particulars Details
Loan Up to ₹60 Lakhs
Interest Rate 12.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 12 Years

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:

Maximum Loan Amount Up to ₹80 Lakhs
Interest Rate 11.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 12 Years

3. Auxilo Education Loans:

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

Loan Amount Up to ₹50 Lakhs
Interest Rate 12.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 10 Years

4. InCred Education Loans:

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

Loan Amount Up to ₹65 Lakhs
Interest Rate 12.5% - 13.5% per annum
Processing Fees 0.5% - 2%
Repayment During Course Simple Interest / Partial Simple Interest
Repayment Tenure Up to 10 Years

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,

Bank Loan Interest Rate Processing Fees Repayment During Course Repayment Tenure
Avanse Education Loans Up to ₹60 Lakhs 12.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 12 Years
HDFC Credila Education Loans Up to ₹80 Lakhs 11.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 12 Years
Auxilo Education Loans Up to ₹50 Lakhs 12.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 10 Years
InCred Education Loans Up to ₹65 Lakhs 12.5% - 13.5% per annum 0.5% - 2% Simple Interest / Partial Simple Interest 10 Years
Eduvanz Up to ₹15 Lakhs 15% - 45% per annum Not specified Not specified 60 months

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

Comparison Banks - Public and Private Sector Non-Banking Finance Companies (NBFC)
Course Flexibility

Banks offer education loans to approved/reputed universities in India and abroad. The category of courses covered range from graduate, post-graduate, diploma, etc., mainly in the non-vocational streams.

Some nationalised banks offer education loans for vocational courses on a case-by-case basis.

Non-Banking Finance Companies are comparatively relaxed on the course types and offer education loans to a wider selection of courses across the globe.

Loan Coverage

Education loans sanctioned by banks cover the tuition fees, travel expenses, lab fees and exam fees, lodging fees, cost of books and equipment, library fees, caution deposit and all other related costs.

Education loans sanctioned by NBFCs cover 100% of the tuition fees, travel expenses, lab fees and exam fees, lodging fees, cost of books and equipment, library fees, caution deposit and all other related costs.

Loan Procurement

Banks have more stringent rules and regulations and mostly offer loans for courses that promise job prospects for the borrower.

When compared to banks, NBFCs have simpler terms and loan procurement is easier for offbeat courses chosen by the student.

Loan procurement is easier for offbeat courses chosen by the student.

Processing Time

Private banks approve loans faster when compared to public sector banks. Public sector banks sanction loans faster based on the relationship that the customer has with the bank.

Banks give quick approvals mainly for recognized courses.

Non-Banking Finance Companies are faster in sanctioning loans irrespective of the type of course.

Processing Fees

The processing fees charged by banks range between 0.5% to up to 2%.

The processing fees charged by Non-Banking Finance Companies range between 1% to up to 2%.

Government Subsidy

All banks offer interest rate subsidy for the weaker section of the society. This subsidy will be applicable during the moratorium period.

Interest rate subsidies are not available with Non-Banking Finance Companies.

Security Collateral

Banks require security collateral based on the loans amount.

For loans below Rs. 4 lakhs, no security is required.
For loans between Rs. 4 lakhs and Rs. 7.5 lakhs, third party guarantee.
Loans above Rs. 7.5 lakhs require tangible collateral security. Loans are approved based on the security provided by the customer.

Non-Banking Finance Companies ask for security based on the loan amount availed and also based on the credit history of the borrower.

Loan Amount

All public and private sector banks impose an upper limit on the loan amount ranging between Rs. 20 lakhs and Rs. 30 lakhs, based on the course and university selected. Depending on the requirement of the borrower, the loan amount sanctioned varies with each bank.

NBFCs do not have a cap on the loan amount sanctioned and structure loans based on the need of the student and the type of course enrolled for.

Charges

Borrowers availing education loans from banks have to pay charges like processing charges, documentation charges, bounce charges, swap charges, prepayment charges, late penalty charges, etc.

Borrowers availing education loans from NBFCs have to pay charges like processing charges, documentation charges, bounce charges, swap charges, prepayment charges, late penalty charges, etc.

Interest Rates

Interest rates are calculated by banks according to the current base rate of the bank. Education loan interest rates range roughly from 10% to 17%, depending on the lender.

Interest rates are calculated by banks according to the current base rate of the bank. Education loan interest rates are offered as floating interest rates by Non-Banking Finance Companies.

Moratorium Period

Private and public sector banks give a moratorium period or holiday period ranging from 6 months to up to 1 year.

Non-Banking Finance Companies give a moratorium period or holiday period of 6 months.

Repayments

Repayments for education loans got from banks can be done within 7 years. The interest repayment can start during the moratorium period and the principal repayment can be done as monthly installments after the borrower has got a job.

Repayments for education loans got from NBFCs can be done within 7 years. The interest repayment can start during the moratorium period and the principal repayment can be done as monthly installments after the borrower has got a job.

Documents required

Admission Letter
Loan Application Form
2 passport photographs
Study Cost Statement
PAN Card
Aadhaar Card
ID Proofs
Residence Proofs
Bank account statement for last six months
Income Tax Returns Statements
Statement of liabilities and assets
Proof of income
ID Proofs
Residence Proofs
Signature Proofs

Admission Letter
Loan Application Form
2 passport photographs
Study Cost Statement
PAN Card
Aadhaar Card
ID Proofs
Residence Proofs
Bank account statement for last six months
Income Tax Returns Statements
Statement of liabilities and assets
Proof of income
ID Proofs
Residence Proofs
Signature Proofs

Customised Services

Some private sector banks offer customised loan packages according to the needs of the borrower along with doorstep services. Additionally, some lenders also give pre-visa or pre-admission loan sanctions.

NBFCs offer special services like pre-visa or pre-admission loan sanctions, fast-track loans, bridge loans, GRE score based loans and certificate of availability of funds.

Pre-closure Charges

Most banks do not levy any pre-closure charges for education loans according to The Reserve Bank of India norms.

Non-Banking Finance Companies might levy pre-closure charges based on the reason for closure, tenure left and the borrower’s profile.

Concessions for Women

Most public sector banks offer concessions on interest rates for women borrowers.

This feature might not be available with Non-Banking Finance Companies.

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

List of Banks Providing Education Loans in India

  • Andhra Bank
  • Allahabad Bank
  • Axis Bank
  • Bank of Baroda
  • Bank of India
  • Bank of Maharashtra
  • Canara Bank
  • Central Bank of India
  • City Union Bank
  • Corporation Bank
  • Dena Bank
  • Dhanlaxmi Bank
  • Federal Bank
  • HDFC Bank
  • Indian Bank
  • Indian Overseas Bank
  • IDBI Bank
  • Jammu And Kashmir Bank
  • Karnataka Bank
  • Karur Vysya Bank
  • Lakshmi Vilas Bank
  • Oriental Bank of Commerce
  • Punjab & Sind Bank
  • Punjab National Bank
  • Saraswat Bank
  • South Indian Bank
  • SBBJ Bank
  • State Bank of Hyderabad
  • State Bank of India
  • State Bank of Patiala
  • State Bank of Travancore
  • Syndicate Bank
  • Tamilnad Mercantile Bank
  • UCO Bank
  • Union Bank of India
  • United Bank of India
  • 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.

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

Wrapping up

This list doesn't include all NBFCs that offer education loans in India. We suggest that to make the best choice, it's a good idea to compare things. You should inquire about interest rates and fees from different NBFCs. This will allow you to pick the right educational loan option. We hope that it fits your needs and budget.

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
  • give options for delaying payments
  • have a 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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Frequently Asked Questions

Who can get an education loan from an NBFC?

Generally, any student who is:

  • Between 18 and 35 years old
  • An Indian citizen
  • Have good grades and be accepted into a college (in India or abroad)
  • 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?

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

  • ID proof
  • Address proof
  • College admission letter
  • Grades
  • Co-signers income proof (if needed)
  • Proof of any security offered (if applicable)

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