HDFC Credila vs. Axis Bank: Which is Better for Education Loans?

In the last financial year, the Indian financial market witnessed INR 17,000 Cr worth of education loans disbursed. The situations are positive for students planning their study abroad with an education loan, and the crucial thing is selecting the lender who offers the best education loan. 

Axis Bank and HDFC Credila are two prominent lenders in the Indian market for study abroad loans. Both lenders offer education loans under different categories, but which is better depends on your eligibility and personal preferences.

Comparative overview of HDFC Credila vs. Axis Bank Education Loans

Noticeable common features for education loans by Axis Bank and HDFC Credila include options for secured vs. unsecured education loans and tax benefits under section 80 E. The table below gives you a comparative overview of the features of education loans by Axis Bank and HDFC Credila to study abroad: 

*Interest rate as on July 2023

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The major differences between Axis Bank and HDFC Credila include the range of loan amounts, interest rates, repayment period, and eligible countries and institutions. To decide your lender, dive deep into the unique features, mandatory conditions, and details of abroad education loans by Axis Bank and HDFC Credila, which begins with familiarizing with the lenders. 

Axis Bank

Founded in 1993, Axis Bank is a prominent private sector bank with 5,625 branches across the states and Union Territories in India. Education loans from the Axis Bank start from INR 50,000 and fund the higher education of eligible applicants with or without collateral security at affordable interest rates. 

• The education loans help students study in Axis Bank-listed institutions
• Education loans for working professionals (up to INR 40 Lakhs) are available
• Generally, due to their internal benchmark lending rate difference, Axis Bank education loans have lesser fluctuations in interest rates compared to many other lenders like HDFC Credila. The internal components, like MCLR*, are charged accordingly to avoid differences in the effective interest rate. 
• No cap for loan amounts is there if the collateral value is sufficient
• Central Sector Interest Subsidy Scheme is available for education loans

*MCLR: The MCLR or Marginal Cost of Funds Based Lending Rate is the benchmark interest rate below which banks can’t lend. The RBI introduced it in 2016 to make the lending process more democratic and uniform for all lenders. 

HDFC Credila

HDFC Credila was founded in 1977 for housing loans and, in 2006, became a dedicated NBFC for education loans, later becoming the oldest NBFC in India for education loans. Features of HDFC Credila include the following: 

• The education loan covers 1,000+ institutions across 35+ countries
• Properties mortgaged with HDFC Bank can be collateral for Credila education loans
• High amounts of unsecured education loans can be availed
• HDFC Credila allows for semi-collateral education loans 
• HDFC Credila offers educations loans for working professionals to study executive MBA

Loan amount limit for Axis Bank and HDFC Credila

The maximum loan amount from Axis Bank is INR 75 Lakhs in secured education loans. For unsecured education loans, Axis Bank offers up to INR 50 Lakhs for Prime A-listed institutions and up to INR 40 Lakhs for Prime B-listed institutions. 

HDFC Credila education loan amount varies between INR 20 - 75 Lakhs for different countries and courses as listed below: 

Make sure your university is listed by Axis Bank or HDFC Credila for study abroad loans. If not, negotiate with the lender based on the academic and financial weightage your application has. 

Interest rates for HDFC Credila and Axis Bank education loans

Education loan interest rates can be fixed or floating, according to the lender’s decision, based on the market conditions. Axis Bank offers an interest rate of 11% - 11.5% for unsecured education loans and 9.8% - 10.5% for secured loans, depending on the collateral value. 

HDFC Credila education loan interest rates fall between 11.25% - 13%, varying with countries, as in the table below: 

*Interest rate as of July 2023

For both lenders, the interest has to be paid during the moratorium period. Axis Bank offers Simple Interest (SI), and HDFC Credila offers Simple or Partial Simple Interest (PSI) on education loans. 

Repayment tenure of Axis Bank and HDFC Credila

While selecting, ensure the education loan offers enough time to repay the education loan. The repayment tenure for the Axis Bank education loan is 15 years, excluding the moratorium period, while the same for the HDFC Credila loan is 12 - 15 years, including the moratorium period. However, the repayment tenure is flexible and can be trimmed or extended after negotiations with the lender. 

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Types of Education Loans by Axis Bank and HDFC Credila

Education loans can be taken against collateral security or co-applicant income, depending on your eligibility and situation. Here are the details of secured and unsecured education loans by Axis Bank and HDFC Credila to help you decide which is more suitable.

Secured education loans from Axis Bank and HDFC Credila

Secured education loans by Axis Bank funds up to INR 75 Lakhs. The interest rate starts from 9.8% onwards for secured education loans.

• For residential properties, the maximum loan amount can be up to 85% of the collateral value if the co-applicant is salaried and up to 75% if the co-applicant is self-employed.
• For commercial properties, the maximum loan amount can be up to 50% of the commercial property value.
• For fixed deposits, students can get up to 90% of the fixed deposit value, and the fixed deposit must be in the Axis Bank account. 

Secured education loan by HDFC Credila funds 100% of the study-related expenses if the collateral value is sufficient. For secured education loans from Credila, the co-applicant can be any relative of the applicant, whereas Axis Bank mandates the co-applicant must be someone from the student’s close family. 

• The Interest Spread is fixed based on the collateral submitted, meaning that the interest rate can be lower if the collateral value is high and the risk factor is less. 
• The following can be the collateral for an education loan from HDFC Credila: Residential flat or house Non-agricultural land A fixed deposit, assigned in favor of HDFC Credila HDFC second charge property Commercial property - shop
• Residential flat or house
• Non-agricultural land
• A fixed deposit, assigned in favor of HDFC Credila
• HDFC second charge property
• Commercial property - shop

Unsecured education loans from Axis Bank and HDFC Credila

Axis Bank unsecured education loans: As mentioned earlier, up to INR 40 - 50 Lakhs is available for Prime A & B institutions. Typically, the course of study must be STEM or MBA for unsecured loans to study abroad.

• The co-applicant must be from the immediate family, who can be the applicant's father, mother, sibling, or spouse. 
• The co-applicant must earn an income of at least INR 35,000 per month without any obligations. 

HDFC Credila unsecured education loans: HDFC Credila offers unsecured education loans of high amounts based on the co-applicants income. Compared to Axis Bank, the list of eligible universities is flexible for HDFC Credila.

Depending on the country and course (STEM or non-STEM), the minimum co-applicant income requirement varies between INR 20,000 - 50,000 without any obligations.

GRE score-based education loans by Axis Bank and HDFC Credila 

Axis Bank and HDFC Credila offer education loans based on GRE scores for studies abroad. High GRE scores can bring flexibility to the loan amount, interest rate, repayment tenure, etc., for education loans to study abroad from Axis Bank. How it will be in effect depends on the strength of the student’s profile and can vary from case to case. 

Similarly, HDFC Credila offers education loans without a co-applicant if the GRE score is 320+ and the student gets admission to a top university under 100 of QS world university rankings. From Credila, the student with a GRE score of 320+ or GMAT score of 700+, admission to a top university under 100 of QS world university rankings, and high co-applicant income is eligible for a 0.5% interest concession.

Which is better deal for you - Axis Bank or HDFC Credila?

Determining the better option among education loans from Axis Bank and HDFC Credila depends on various factors concerning your situation and eligibility. You may go through the loan terms mentioned above to make an informed choice. 

The following are some observations regarding education loans by Axis Bank vs. HDFC Credila that may help you with a better selection: 

• In secured education loans, Axis Bank offers better interest rates compared to HDFC Credila. However, the property valuation time is longer for Axis Bank compared to HDFC Credila.
• For unsecured education loans for universities listed under Prime categories, Axis Bank offers lower interest rates with lesser fluctuations and longer repayment tenure than HDFC Credila.
• Axis Bank may require a local guarantor, whereas HDFC Credila has a less physical presence and does not require a local guarantor.
• HDFC Credila is more flexible with co-applicant requirements, documentation, and country and course of study than Axis Bank.

Generally, banks can be prioritized over NBFCs for education loans due to lower interest rates and high acceptance rates for visa applications. Note that all countries do not accept education loans from NBFCs for visa purposes. In that context, an education loan from Axis Bank has more weightage than one from HDFC Credila. 

However, as it is case specific to determine the best education lender from Axis Bank and HDFC Credila, you may get in touch with us to find the best education loan for you. We will evaluate your profile and suggest the best option. Check your education loan eligibility for more details. 

Read also:

• HDFC Credila Abroad Education Loan
• Axis Bank Abroad Education Loan
• All About HDFC Credila Education Loan Disbursement Process
• Axis Bank Education Loan Disbursement Process
• HDFC credila vs avanse
• HDFC credila vs auxilo

Frequently asked questions

Which is better for secured education loans - Axis Bank or HDFC Credila?

 

It depends on your situation to finalize Axis Bank or HDFC Credila for secured education loans.

• If your collateral has a higher value than the amount you need, Axis Bank can be the choice, considering the lower interest rates and fewer fluctuations in interest rates. 
• If your collateral has less value than the loan amount, HDFC Credila can be the better choice since it is more flexible with the collateral value than Axis Bank. 

However, before choosing a lender, go through the terms and conditions thoroughly to make an informed decision considering your needs. 

Which is better for unsecured education loans - Axis Bank or HDFC Credila?

 

For unsecured education loans, Axis Bank listed eligible universities for loan amounts of more than INR 7.5 Lakhs. If your university is on the list, Axis Bank can be the preference. 

If your university is not listed by Axis Bank, HDFC Credila can be the ideal choice since HDFC Credila is more flexible with eligible universities and courses than Axis Bank. 

How can I apply for an education loan from Axis Bank or HDFC Credila?

 

You can apply either online or offline for an education loan from Axis Bank. 

• To apply online, the easiest way is to check your eligibility and get in touch with GyanDhan for guidance throughout the process. 

• To apply offline, you may visit the nearest branch of Axis Bank with the documents required for an education loan. The officials will provide you with guidance on the application.