In the fiscal year 2023–2024, NBFC education loan without collateral are expected to see a notable increase of up to 40%, according to the global credit rating agency CRISIL. There is a greater need for education loans due to specialized business models and the rise in students studying overseas. The remaining 10% of education loans are for courses offered in India; over 90% of the loans are for study abroad.
As an alternative to traditional banks, NBFCs (Non-Banking Financial Corporations) offer lending options and financial services. Banks lend money primarily from customer deposits, but NBFCs raise money from investors, financial institutions, and banks in order to lend money to customers. This is the main way that banks and NBFCs differ from one another. NBFCs frequently give their clients greater flexibility because of their laxer regulations.
Characteristics of NBFC education loan without collateral
The NBFC offers financial aid in the form of loans for overseas education to students who want to study overseas. NBFC education loan without collateral, are used to pay for living expenses, travel costs, tuition, and other costs associated with studying. NBFC education loan without collateral usually have certain requirements for qualifying, such as the foreign institution’s reputation, course offerings, and academic standing.
- NBFCs may differ in the interest rates, loan amounts, and terms of repayment that they offer. Before approving the loan, they consider a number of factors. These elements are:
- The academic details of the applicants (10th, 12th, graduation certificate and degree, test scores, etc.)
- The co-applicant’s income profile, along with supporting documentation (pay stubs, income tax returns, CIBIL score, etc.)
- Target country and degree programme.
Eligibility criteria of NBFC education loan without collateral
To be eligible for NBFC education loan without collateral, a student must meet the following criteria:
- The student must be an Indian citizen
- The student must be between the ages of 18 and 35 years
- The student must have a good academic record
- The student must have secured admission to a recognized university or college abroad
- The student must have a co-applicant who has a steady source of income and a good credit score
- The student must have scored decent score in pre-requisite exams such as IELTS, TOEFL, and GRE
Students pursuing higher education have an alternative source of funding with NBFC education loan without collateral. These loans are intended for people who might not be eligible for government-sponsored school funding or conventional bank loans. It is crucial to take into account the terms and conditions of NBFC education loan without collateral options.
This includes being informed about extra costs like penalty fees, prepayment fees, and processing fees. Borrowers will be better equipped to make decisions and select the loan that best meets their needs if they have a thorough understanding of and comparison between these factors.
Before applying for an educational loan from NBFCs, a few factors to keep in mind are:
- Education loans without collateral interest rates – NBFCs charge higher interest rates than government banks do because their general bracket falls between 11% and 14%. Public banks typically charge low interest rates on student loan programmes that involve overseas study. Before you agree to borrow an education loan for study abroad, make sure you have a thorough discussion with your lender. The interest rates quoted by NBFCs vary depending on the country.
- Maximum loan amount – NBFCs typically allow uncollateralized loans for overseas education up to a maximum of 60 – 80 lakhs. Each country has its own loan limitations for loans for higher education abroad.
- Moratorium Period and repayment – Loan applicants in NBFCs must begin making their first interest payment the month after their educational loan is disbursed. The loan applicants have the choice of paying all or part of the interest. The principal amount may be paid in installments once the moratorium period has ended. The length of the course plus an additional 12 months is known as the moratorium period.
- Maximum loan tenure – The maximum loan tenure accorded by NBFC education loan without collateral is 10 – 15 years
- Processing Fees – In comparison to most government banks, NBFCs charge a processing fee of between 0.5 and 2% of the total loan amount, plus additional GST charges.
When it comes to NBFC education loan without collateral, GyanDhan provides a trouble-free loan application and disbursement process that is transparent and easy to use. To help you choose the best loan option for your needs, the knowledgeable education loan counselors at GyanDhan compare the loan offerings of various lenders. This includes contrasting the terms of repayment, processing costs, loan amounts, interest rates, and other aspects of various lenders.
Benefits of taking a loan from an NBFC
Studying abroad has become more and more expensive, putting a heavy financial burden on students and their families. Is this “relatable”? Finding reliable sources of funding for student loans has become more common as the cost of higher education continues to rise. If banks aren’t the only option available to you for funding student loans, you might be wondering. In the last ten years, a large number of non-bank financial institutions (NBFCs) and private financing firms have emerged to offer educational loans to students.
From the beginning, these NBFCs have gained the public’s trust almost immediately. NBFCs are attracting customers by offering an alluring loan programme that requires little paperwork and can be disbursed quickly.
When offering a study loan or a personal loan for education, NBFCs offer customized, multi-purpose services because they are less strictly regulated. These services could include adjustable loan terms, adjustable monthly installment plans, etc. Additionally, you can customize the loan to meet your specific needs in order to pay for books, tuition, hostel fees, and other expenses. Even if you want to attend a relatively new school or location, you can easily obtain a loan because NBFCs frequently cover a wide range of colleges in India and around the world.
Many students who wish to study abroad and finance their higher education without pledging any collateral may find relief in the fact that NBFCs offer education loans for study abroad without collateral.