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Banks or NBFCs, which is better for student loans in India?

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Banks or NBFCs, which is better for student loans in India?

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  1. Banks or NBFCs, which is better for student loans in India? When it comes to Education loans in India, you have two options – visit a bank or borrow from a non-banking financial company. Both have their advantages but NBFCs hold the edge in certain areas. This article will discuss the same to help you make the right choices between the two.

  2. 1. Loan amounts.NBFCs usually provide higher loan amounts. Some lenders in this segment will offer Educational loans of up to Rs. 40 or 50 lakhs. Banks on the other hand will require you to provide margin money & collaterals to provide higher loan amounts. And even after doing so, it’s highly unlikely that banks will provide such loan amounts to students. NBFCs will provide such loan amounts as long as you are a bright student or come from a strong financial background. 2. 100% financing.As mentioned earlier, banks usually require you to provide some margin money for student loans that exceeds a certain amount. This can be an issue for students who do not have the means to cough-up the required amount; the loan might not be provided to them. However, NBFCs will provide 100% financing for eligible students. 

  3. 3. Easy to apply.Bank student loans, especially public sector banks, can be a real ordeal. They usually entail multiple trips to the bank, strenuous paperwork and complicated documentation. Moreover, the process can take a lot of your time and leave you drained. However, applying through an NBFC can be a real cake walk. Just apply online, it could be from your home or office and even on the move. You’ll get instant approvals and disbursals over the next few hours. Some lenders also promise a turnaround time of just 48 hours. 4. Scope to negotiate.Banks are usually rigid when it comes to their student loans. What they offer is what you get and there’s very little leeway for you to negotiate a better deal. However, with most NBFCs, you can bring down the rates & ask for higher loan amounts if you have a good credit score or amazing grades, a good financial backing, stellar entrance exam results, provide collateral, etc.

  4. 5. Courses accepted.Banks, mostly public sector ones, will have certain reservations when it comes to your choice of education. They will be more willing to offer financial help if you are planning to study at a reputed college and if the course has good prospects. However, NBFCs are more flexible in this regard. They will offer students loans for courses on music, animation, theatre, etc.

  5. These were some of the reasons why NBFCs are a better choice when it comes to student loans in India. With a loan from such companies, you are bound to enjoy smoother, more comprehensive financing. It will ensure you are able to pursue your dreams with ease. We hope this article has been helpful for you and will make it easier for you to choose between the two options. Good luck and all the best, study hard! • Facebook • Twitter • Instagram • LinkedIn

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