1. Why Comparing Education Loan Lenders Matters
As an Indian student going abroad, you mainly have three lender buckets – Indian banks, Indian NBFCs and international lenders. Instead of starting with brand names, it helps to understand how each bucket behaves and how it will impact your EMI, flexibility and peace of mind.
2. Snapshot: Banks vs NBFCs vs International Lenders
| Lender Type | Collateral Style | Processing Speed | Typically Better For |
|---|---|---|---|
| Banks (PSU & Private) | Prefer collateral for higher amounts. Limited no-collateral options for selected profiles. | Moderate to slow, more checks & paperwork. | Families okay to mortgage property and looking for relatively lower interest on secured loans. |
| NBFCs (education-focused) | Strong in profile-based / no-collateral loans. Collateral is optional mainly for very high amounts. | Usually faster and more flexible. | Students going to popular countries & recognised universities who do not want to pledge property. |
| International lenders | Generally no collateral and no Indian property. Based on admit and future earning potential. | Online process, quick decision; rules differ. | Profiles with weak Indian co-applicant but good admit, or those wanting funding directly in foreign currency. |
On StudySahara you can explore detailed lender-wise guides for SBI, Credila, Avanse, InCred, ICICI Bank, Prodigy Finance and many more . This comparison page sits above those individual pages and helps you see the bigger picture.
3. Collateral vs Non-Collateral – How to Think About It
Almost every abroad education loan falls into one of these two buckets. Understanding the basic difference makes the rest of the comparison much easier.
Collateral (Secured) Loan
Backed by your family’s property or deposits
A collateral / secured education loan means your family pledges an asset (house, flat, plot, fixed deposit, etc.) as security. The lender keeps rights over this asset till the loan is repaid.
- Banks usually offer larger amounts and relatively lower interest when collateral and paperwork are strong.
- More branch visits and documentation, but often better long-term cost for big loans.
Non-Collateral (Unsecured) Loan
Based on profile, admit and income – no property pledged
A non-collateral / unsecured education loan does not use property as security. The decision is mainly based on your country, university, course and co-applicant’s income / credit profile.
- Usually faster and more flexible with a digital process.
- Interest cost can be slightly higher compared to a strong collateral-backed option.
Collateral is therefore the first big filter. Many public sector banks are designed around classic, collateral-backed loans. NBFCs and some private banks are more active in the non-collateral / profile-based space and help students who either do not want to pledge property or cannot do so comfortably.
When a bank + collateral loan often makes sense
- Your family has clear-title property they are comfortable pledging.
- You want a relatively lower interest rate on a large loan amount.
- You are okay with slightly slower processing in exchange for better long-term cost.
- You don’t mind detailed paperwork and some in-branch processes.
Some public sector banks (for example, SBI or Union Bank) also have limited non-collateral ranges for selected universities, but broadly they are strongest when you are ready to use collateral.
When non-collateral (profile-based) options are worth exploring
- You do not want to pledge property, or documents are complicated.
- You are going to popular destinations such as USA, Canada, UK, Germany, Ireland, etc. with a reasonably good admit.
- Your co-applicant has a stable income (even if it’s not very high) and you prefer a faster, more digital process.
This is where education-focused NBFCs and some private banks come in with higher non-collateral limits for the right combination of income profile and university ranking.
4. Which Lender Type Fits Which Kind of Student?
In real life, the “right” education loan provider depends mainly on four things: country, university, co-applicant profile and collateral. Here’s a simple way to visualise how banks, private banks and NBFCs usually fit different kinds of students.
Profile A
Strong collateral, decent co-applicant income
If your family has clear-title property and is comfortable pledging it, public sector / government banks can be a great fit. Secured options from banks like SBI, PNB or Union Bank can combine larger sanctioned amounts with relatively lower interest for strong collateral cases.
Some of these banks also have limited non-collateral ranges for selected universities, but they are usually at their best when you are okay with a classic collateral-backed education loan.
Profile B
Strong co-applicant income, no collateral
When your co-applicant has a strong, stable income and clean credit but you prefer not to mortgage property, private banks and some NBFCs can offer attractive high-value non-collateral loans for good universities and countries.
Depending on the university ranking and income profile, lenders such as ICICI Bank, Axis Bank, Credila or IDFC FIRST Bank etc may be able to support large unsecured limits for the right profiles.
Profile C
Average co-applicant income, strong or decent admit
Not every family has very high income, and that’s okay. For students with a decent admit and moderate but stable income on the co-applicant side, education-focused NBFCs can be more flexible than many traditional options.
For certain universities and courses, Avanse, Auxilo, Incred, Tata Capital, Prodigy Finance, MPOWER Financing and selected Indian NBFCs can support non-collateral education loans even when the co-applicant income is not very high, provided basic stability and documentation are in place.
The goal is not to “force approval” but to find a safe, realistic structure that fits your family’s comfort level today and your repayment capacity tomorrow.
5. What to Compare Beyond Just Interest Rate
Most Indian students search for the “lowest interest rate” – but when you actually compare education loan banks and NBFCs, there are many other factors that decide which option is truly affordable and safe for you.
Total Cost of the Loan
- Processing fee + GST
- Re-pricing / conversion charges
- Forex / remittance charges for abroad studies
Flexibility & Safety for Your Future
- Repayment tenure (10 to 15 years)
- How EMI changes if you pre-pay or part-pay
- Moratorium rules during study period
- Options if you lose your job or switch country
Service Experience from the Provider
- Response speed on email / WhatsApp / calls
- Clarity in sanction letter and breakup of costs
- Disbursement speed for university deadlines
- Support for future top-ups / refinancing
StudySahara tip
When we compare education loan providers for students, we don’t just see the interest rate. We create a simple side-by-side view of banks and NBFCs based on these three pillars – cost, flexibility and service – so you can choose what fits your profile and risk comfort.
6. Quick FAQs on Comparing Education Loan Banks & NBFCs
These are the questions students usually ask when they try to compare education loan providers in India for study abroad.
Which bank is best for education loan for abroad studies?
There is no single “best bank” for every student. Public banks may offer lower interest but stricter profiles. Private banks and NBFCs may approve faster or offer higher amounts at a slightly higher cost. The right choice depends on your country, course, co-applicant profile and collateral. StudySahara helps you compare these options side-by-side.
Should I take an education loan from a bank or an NBFC?
In general, banks suit students who have strong co-applicants, clear income proofs and are okay with slightly slower processing. NBFCs can be better when you need faster decisions, non-traditional courses or higher unsecured amounts. In many profiles we compare both and choose whichever gives lower total cost + better flexibility.
Can I compare education loans without impacting my credit score?
Yes. You can first compare education loan offers at an information level – interest rate ranges, fees and policies – before doing hard enquiries. At StudySahara, we usually shortlist lenders first and then proceed carefully so that multiple enquiries don’t unnecessarily impact your co-applicant’s credit score.
When should I start comparing education loan providers?
Ideally, start comparing banks and NBFCs before or immediately after you receive your offer letter. Starting early gives you time to fix documents, choose between secured / unsecured structure and avoid last-minute stress near the visa or fee-payment deadline.
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