Choosing the right loan provider

Choosing the right loan provider depends on various aspects such as-

  1. The loan amount
  2. How fast you need it sanctioned
  3. Hidden charges
  4. Interest rate
  5. Trust

Loan providers can be private or public. Private providers may charge a higher interest rate than the public banks.

SBI is the most opted public bank for an overseas education loan whereas HDFC Credila is the most opted private organization.

Other popular loan providers include (but not limited to)-

  1. Prodigy Finance (Con – Not all the colleges are included)
  2. Avanse (DHFL) (Con – New, not sure if trustable)
  3. Axis Bank (Con – charges as much or higher as others)

My perspective may be biased as I have borrowed loan from Credila but you’ll know why.

SBI vs CREDILA

  1. The loan amount (Winner: CREDILA)
  2. How fast you need it sanctioned (Winner: CREDILA)
  3. Hidden charges (Winner: SBI)
  4. Interest rate (Winner: SBI)
  5. Trust (Winner: SBI)
  • SBI provides only 80% of the amount shown on I20. Credila provides 100% amount + additional expenses (flight ticket,  living etc)
  • SBI takes about 2 months to sanction your loan. Credila takes 3-10 days.
  • Credila has higher transaction fee and partial-payment charges than SBI.
  • SBI rates range from 9-11% whereas Credila’s rates range from 10.5-12.5%. For a lower interest rate, collateral is required.
  • SBI is a Government bank and is more trustable than Credila.
  • You need to visit SBI frequently to know the status of your loan. Credila agents serve you at your house.
  • The collateral evaluation must be done by you for SBI whereas Credila takes cares of the evaluation.
  • Credila’s schemes are flexible – pay as less as 1% for the first two years with NO COMPOUND INTEREST.

BETTER OPTIONS

  • Prodigy Finance – 7.5% IR (if you’re joining a top-class university)
  • Loan providers abroad – 0 to 6% IR (if you know a citizen who can act as a co-borrower)

MY EXPERIENCE

Loan Provider: HDFC Credila

Loan Sanction Limit: 40,00,000 (40 lakh INR)

Loan Sanctioned: 15,00,000 (15 lakh INR)

Collateral: Provided

Collateral Value: >40 lakh INR

Interest Rate: 10.5%

Processing Time: 14 days

Transaction Charge: 46,000 INR (One Time)

Monthly Charge: 1,250 INR (Remaining interest amount can be paid after 2 years at once, or left to be compounded)

Partial Payment: Without fee once a year, more than once 1,500 INR for each payment.

Complete Payment: Amount + 4,000 INR

Aditionally, the manager and staff were very humble and friendly.

 

It’s better to try applying for the loan from loan-providers abroad initially and then from the local ones. Hope this helps!