Who offers the best interest rate on student Education Loan: Bank or NBFC’s?

Interest​​ rate on student​​ Education Loan

 

Education loans​​ have to be chosen according to the type of course,​​ the student has enrolled for either within India or abroad.​​ 

The interest rate acts as the most important factor while choosing an​​ education loan.

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​​ Funding can also be done through scholarships.​​ Banks are safe and secure whereas Non-Banking Finance Companies (NBFC) offer a plethora of financing schemes.

Banks offer​​ a​​ limited grant of money whereas NBFC’s have no limit

With​​ so​​ much​​ options​​ to choose from it becomes a tedious task for a student planning to study abroad to compare all.

Are you worried about staying in a foreign place, read​​ How to rent apartments with a student’s loans?

Do not worry we have​​ searched​​ for the best​​ education loan​​ provider​​ to help you decide.

 

Banks - Public and Private Sector

COMPARISON BASIS

Non-Banking Finance Companies (NBFC)

  • Bank lends loans​​ to only approved/reputed universities in India and abroad.

  • Courses covered range from graduate, post-graduate, diploma, etc.

  • Mostly non-vocational streams

  • Few vocational courses are also covered

FLEXIBILITY IN COURSE

  • Relaxed in choice of Institutes

  • Covers mostly all the courses

  • Vocational and​​ Non-vocational courses covered

  • Tuition fees

  • Travel expenses

  • Lab fees and exam fees

  • Lodging fees

  • Cost of books and equipment

  • Library fees

  • Caution deposit

  • Other related costs

COVERAGE IN LOAN AMOUNT

  • Tuition fees

  • Travel expenses

  • Lab fees and exam fees

  • Lodging fees

  • Cost of books and equipment

  • Library fees

  • Caution deposit

  • Other related costs

  • Rigid rules and regulations

  • Offers loans to better job prospects

LOAN PROCUREMENT PROCEDURE

  • Rigid rules and regulations

  • Offers loans to better job prospects

  • Mostly approves of any loan application

  • Private Banks approve loans faster than public sector banks.

  • Public sector banks sanction loans faster based on the customer relationship with the bank.

  • Quick approvals for recognized courses

LOAN PROCESSING TIME

  • They sanction loan faster as compared to Public or Private Banks irrespective of the type of course the student wishes to undertake

  • It ranges between 0.5% to up to 2%

PROCESSING FEES

  • It ranges between 1% to up to 2%

  • Weaker section of the society (Applicable during the moratorium period)

GOVERNMENT SUBSIDY

  • Not applicable for any section of the society

  • Loan amount: Below Rs. 4 lakhs, no security is required.

  • Loan amount: Between Rs.​​ 4 lakhs and Rs. 7.5 lakhs, Third-party guarantee

  • Loan amount: Above Rs. 7.5 lakhs tangible collateral security required

  • Loans are mostly approved based on the security provided by the customer

SECURITY COLLATERAL

  • Security is required based on the loan amount availed and based on the credit history of the borrower.

 

 

  • Maximum loan amount: ​​ Rs. 20 lakhs and Rs. 30 lakhs

EDUCATION LOAN AMOUNT

  • There is no limit to the loan sanctioned amount

  • Processing charges

  • Documentation charges

  • Bounce charges

  • Swap charges

  • Prepayment charges

  • Late penalty charges

  • Any additional charges, if applicable by bank

CHARGES

  • Processing charges

  • Documentation charges

  • Bounce charges

  • Swap charges

  • Prepayment charges

  • Late penalty charges

  • Any additional charges, if applicable by NBFC’s

  • The current base rate of the bank

  • Education loan interest rates range from 10% to 17%.

INTEREST RATES

  • The current base rate of the bank

  • Education loan interest rates are offered as floating interest rates

  • 6 months to up to 1 year

MORATORIUM PERIOD

  • Mostly within 6 months

  • Within 7 years

REPAYMENTS

  • Within 7 years

  • Admission Letter

  • Loan Application Form

  • 2 passport photographs

  • Study Cost Statement

  • PAN Card

  • Aadhaar Card

  • ID Proofs

  • Residence Proofs

  • Bank account statement for​​ the​​ last six months

  • Income Tax Returns Statements

  • Statement of liabilities and assets

  • Proof of income

DOCUMENTS REQUIRED

  • ID Proofs

  • Residence Proofs

  • Signature Proofs

  • Customized loan packages are offered by some Private banks

  • Some lenders also give pre-visa or pre-admission loan sanctions

CUSTOMISED SERVICES

Offer special services like

  • Pre-visa

  • Pre-admission loan sanctions

  • Fast-track loans

  • Bridge loans

  • GRE score based loans

  • Mostly not there as per the instruction from RBI

PRE-CLOSURE CHARGES

  • Heavy closure charges are applied

  • For women borrowers

CONCESSIONS FOR WOMEN

  • Not applicable with NBFC’s

 

Looking for some motivation read​​ 10 Quotes to follow in students life for ultimate success

 

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