A loan taken out from governmental or private money lending institutions to pay for expenses associated with education is referred to as an education loan. In this situation, it is particularly challenging for parents to finance the funding of their children's higher education because higher education costs are increasing every year. As a result, a lot of them are forced to use education loans as a form of financial aid to help pay for their studies and other expenditures associated with their education.
Top banks (public and private), including State Bank of India, Bank of Baroda, and NBFCs (Non-Banking Finance Companies), like Avanse, Incred, etc., provide a variety of loan options for prospective students to pursue their further education at their desired colleges in India and overseas. It might be difficult to compare and select from among these programs because it depends on a number of different aspects, including the course, college costs, the interest rate being offered, the borrower's ability to repay, the need for collateral, etc.
The following are some key differences between the education loan programs provided by banks and NBFCs:
Course flexibility- The majority of reputable universities in India and overseas are eligible for education loans from banks. Graduate, postgraduate, and diploma programs all cover different sets of courses. NBFCs provide student loans for a wider range of unconventional degrees at various colleges. But the interest rate differs for various colleges. For the best universities, the interest rate is lower; for the others, it is higher.
Expenses covered- The banks often leave a margin of 15-20%, which covers 80-85% of all educational expenses, including tuition, test fees, travel expenses, lodging expenses, etc. Whereas NBFCs do so without using any margin money, paying 100% of all educational costs, including travel, tuition, test fees, etc.
Original content:- Differences Between Banks and NBFCs for Education Loan