{"id":4748,"date":"2023-08-28T19:18:17","date_gmt":"2023-08-28T19:18:17","guid":{"rendered":"\/blog\/?p=4748"},"modified":"2026-01-27T12:43:11","modified_gmt":"2026-01-27T07:13:11","slug":"nbfc-vs-bank-which-one-is-better-for-an-education-loan","status":"publish","type":"post","link":"https:\/\/www.tatacapital.com\/blog\/loan-for-education\/nbfc-vs-bank-which-one-is-better-for-an-education-loan\/","title":{"rendered":"NBFC vs Bank Education Loan: Which is Best for Indian Students?"},"content":{"rendered":"\n

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Here is a common question for those applying for an education loan<\/a>: Should you consider an education loan from NBFC or bank? Which one is better: a bank education loan or an NBFC education loan?<\/p>\n\n\n\n

Let\u2019s look into some aspects of the past when it comes to this discussion.  The education loan market was dominated by banks in India. However, NBFC<\/a> for education loans have gained considerable market share and today offer an alternative when it comes to speedy disbursal of loans<\/a>, and friendly lending norms for education loans.<\/p>\n\n\n\n

This, however, does not mean you as a borrower cannot avail an education loan from a bank. Both these financial institutions have their own terms, processes and features. So, which is better? What is the difference between a bank and NBFC? Well, if you plan to apply for an education loan, you should be aware of the pros and cons of both. Let\u2019s look into the difference between bank and NBFC for loans in detail.<\/p>\n\n\n\n

Key Differences Between NBFC and Bank Education Loans in India<\/strong><\/h2>\n\n\n\n

Below, we look at the key differences between bank and NBFC education loans:<\/p>\n\n\n\n

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Criteria<\/td>Bank<\/td>NBFC<\/td><\/tr>
Interest<\/td>Depending on the bank, interest rates are generally lower<\/td>NBFCs usually have slightly higher interest rates than conventional banks<\/td><\/tr>
Loan processing fees<\/td>Compared to NBFCs, loan processing fees for conventional banks are generally lower<\/td>NBFCs education loans have comparatively higher loan processing fees<\/td><\/tr>
Loan limits with collateral<\/td>A bank\u2019s limit for secured loans will vary based on the financial institution\u2019s policies, sometimes going up to Rs. 3 crore <\/td>For secured NBFC student loans, the limit will vary based on the institution, but there is no fixed limit<\/td><\/tr>
Loan limits without collateral<\/td>Banks may provide unsecured loans; the amount will vary based on the bank\u2019s policies and borrower profile<\/td>For an NBFC education loan without collateral, the limit will depend on the institution\u2019s policies and borrower profile<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

NBFC Education Loan Without Collateral: Who Qualifies and How it Works?<\/strong><\/h2>\n\n\n\n

Many NBFCs offer education loans without collateral<\/a>. However, their eligibility criteria and requirements will vary based on the lender and borrower profile.<\/p>\n\n\n\n

Applicants must have the following general requirements to qualify:<\/p>\n\n\n\n