Difference Between Education Loans Offered By Banks And NBFCs
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Looking for education loans?
You can choose from bank and NBFCs and get the funds. But what’s the difference between the two?
Let’s decode.
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Interest rates
Banks usually offer education loans at lower interest rates compared to NBFCs. So, your EMIs would be different across these institutions.
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Interest subsidy
The government offers interest subsidy on the loan to eligible students. This subsidy is available with bank loans, not with NBFCs.
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Tax deduction
Interest paid on education loans financed by banks is allowed as a deduction under Section 80E. For NBFCs, the deduction is available only if the NBFC is notified by the CBDT.
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Preferential rates
Some banks might offer preferential interest rates for meritorious or female students. No such benefits are available with NBFCs.
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Processing fee
Banks usually charge a lower processing fee compared to NBFCs on the education loans offered. This also brings down the added expense on the loan.
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Know the differences and choose the right lender like IDFC FIRST Bank. Get unsecured education loans up to Rs 50 lakhs at attractive rates.