Credila vs. SBI Abroad Education Loan

Education loans have been witnessing remarkable growth from both Non-Banking Financial Companies (NBFCs) and public banks in recent times. According to the Department of Financial Services, Ministry of Finance, public sector banks disbursed INR 28,699 crore in education loans for the financial year 2023-24. 

Simultaneously, CRISIL ratings predict a substantial 40% increase in abroad education loans from NBFCs for the fiscal year 2023-24. Clearly, students are turning to both public banks and NBFCs for financial support when pursuing education abroad. If you are also stucked at which is the best bank to take education loan in india, then read our comparative analysis for the top lenders namely SBI and Credila to make informed decisions.

 

SBI, a well-known public sector bank, and Credila, a reputable NBFC, stand out for their comprehensive offerings. The primary distinction between the two lies in their regulatory framework, range of operations, and services provided. While SBI operates under the regulation of central authorities like the Reserve Bank of India (RBI), Credila is subject to oversight by different governing bodies. 

Credila Education Loan

Students wondering which education loan is best in india must consider Credila, since it is a financial institution that focuses only on education loans. So far, over 2.10 lakh students have trusted Credila to fund their studies around 64 countries and at more than 5,000 institutes. Whether you're planning to study in India or abroad, Credila offers easy and flexible education loans, even before you get your admission or visa. With higher loan amounts and quick processing, it’s a great option for students who need financial support for higher studies. Credila is the only NBFC in India that provides tax benefits under Section 80E on its non-collateral education loans.

Credila Education Loan Eligibility Criteria:

To avail the benefits of Credila education loan, you should be aware of eligibility criteria to make informed decisions.

 

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  You should hold Indian citizenship.
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  You must be 18 years or older at the time of loan application.
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  Must have secured admission to a recognized university in India or abroad.
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  Must have taken required exams like GRE, IELTS, or TOEFL, depending on the course and country.
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  A co-applicant is mandatory (can be a parent, sibling, spouse, or a close relative).
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  The co-applicant must have a regular income and a good credit history.
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  You must be enrolled in programs like graduate, postgraduate, diploma, certificate, and PhD.
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  Supported countries include the USA, UK, Canada, Australia, New Zealand, Germany, France, Ireland, and more.

 

SBI Education Loan

SBI is one of the most trusted public banks in India when it comes to education loans. With a wide range of loan options for students planning to study in India or abroad, SBI has helped thousands of students to pursue their academic dreams. SBI is known for its low interest rates, flexible repayment options, and higher loan amounts and is a popular choice among students for education loans. Whether you are heading to an IIT, IIM, or top international universities like MIT, Harvard University or Oxford University, SBI offers customized loan solutions to support your higher education journey.

SBI Education Loan Eligibility Criteria:

You should meet the following eligibility criteria to apply for SBI education loan since they determines eligibility for its education loans by considering both merit and financial need.

 

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  You should be an Indian citizen with a minimum age of 18 years.
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  You should be enrolled to a recognized university/institution for a degree or diploma program is required.
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  Must have good academic history.
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  SBI’s education loans cover graduate, postgraduate, diploma, certificate, and doctorate programs. 
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  The co-applicant must be a parent or guardian with stable income and a good credit history. 
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  Accepted collateral includes residential property, buildings, and fixed deposits.

Comparative Overview of Credila vs SBI Education Loan

Basis of difference	State Bank of India (SBI)	Credila
Type of lender	Public sector bank	NBFC
Loan quantum	Up to INR 3 crore (secured) Up to INR 50 lakhs (unsecured)	Up to INR 1.5 Crore (Secured) Up to INR 70 Lakh (Unsecured)
Collateral requirement	Required for all types of courses	Collateral is mandatory for bachelor's courses
Rate of interest	9.65% (Women) 10.15% (Men)	10.50% - 12.25%
Financial co-applicant	Not required	Required
Margin money	10% of the loan amount	No margin money
Processing fee	INR 10,000 + GST	0.75%-1.25% of the sanctioned amount
Moratorium period	Course period + 6 months	Course period + 12 months
Repayment tenure	15 years	15 years
Repayment during course period	Not mandatory	Simple / Partial interest
Income tax benefits under section 80e	Yes	Yes
Loan approval basis GRE / GMAT?	No	Yes

Having provided an overview of the differentiating factors between Credila and SBI as education loan providers, let's now delve into a comprehensive discussion of each aspect to gain a deeper understanding and make an informed decision.

Maximum Loan Amount Offered by Credila and SBI

Selecting a particular lender for an education loan involves considering various factors, and one of the most important factors is the loan amount the lender is willing to lend. It is crucial for students to ensure that the loan amount offered aligns with their financial requirements. The cost of education varies based on the intended course and institution. Therefore, it is essential to assess whether the amount offered by the lender is sufficient to cover your tuition fees and living costs.

 

SBI offers up to INR 3 crore of loan amount, depending on the student’s profile and Credila offers loan amounts up to INR 65 lakhs. The maximum loan amount offered by Credila varies depending on the course, institute, and country.

 

For aspiring candidates applying for a master's course, SBI proves to be a more favorable choice due to its provision of funds up to INR 3 crore, effectively covering the significant expenses associated with studying abroad at the master's level. On the other hand, for individuals planning to undertake a bachelor's or diploma course with lower education costs, opting for a loan from Credila is advisable, as it can sufficiently cover the expenses related to education and other associated costs.

Difference in Interest Rates of Credila and SBI

Interest rate refers to the percentage charged by the lender on the sanctioned amount. It represents the cost of borrowing. It is the percentage of the loan amount that is added to your loan balance over time until you fully repay the loan.

 

Interest rates play a crucial role in determining the overall cost of an education loan. Credila and SBI offer competitive interest rates, but the specific rates differ.

 

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  Credila’s current rate of interest ranges between 10.50% - 12.25% per annum, depending on the profile of the student, course, institution, and country of enrollment. 
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  SBI’s current rate of interest is 9.65% per annum for female candidates and 10.15% for male candidates.

Collateral Requirement by Credila and SBI

Credila provides unsecured education loans based on the applicant’s profile. The basis of loan approval depends on the co-applicant’s income, the academic performance of the students, and the country of enrollment. If you are admitted to any US institution, then Credila also considers your GRE score and offers an education loan accordingly. While they offer secured loans of up to INR 1.5 crores. 

 

SBI generally requires collateral for education loans. Accepted collateral includes property, fixed deposits, or government securities. However, SBI now offers loan amounts of up to INR 50 lakhs without collateral for select institutions.

Co-Applicant Requirement in Credila and SBI

When it comes to applying for an education loan for studying abroad, both Credila and SBI usually require a co-applicant. A co-applicant shares the responsibility for loan repayment and is equally liable for any defaults or delays. Having a co-applicant strengthens the loan application by providing an additional source of repayment and financial support. 

 

Education loans from Credila require a financial co-applicant to study abroad. The co-applicant can be any immediate family member (parent, sibling, maternal and paternal relative, or spouse) with a stable source of income and a good credit history. 

 

Education loans from SBI do not require a financial co-applicant, however, a co-applicant is still required. The co-applicant can be a parent, guardian, or legal guardian. Having a co-applicant adds an extra layer of assurance for the lender and enhances the chances of loan approval.

 

Hence, if you are going for an education loan abroad but do not have a financial co-applicant with a stable income, then SBI is a viable option. Abroad education loans from SBI are largely based on collateral value. Hence, a co-applicant is just required to co-borrow the loan, and their income does not play an important role.

Margin Money of Credila and SBI

Margin money refers to that part of the total loan that the borrower needs to contribute from their own funds when applying for an education loan. 

 

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  SBI usually requires the borrower to contribute a margin money amount for education loans. SBI finances up to 90% of the total cost of education, meaning the borrower needs to contribute a margin of 10% of the total cost. 
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  Credila, being an NBFC does not require any margin money and provides 100% finance towards the cost of education. 
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  Therefore, if you have sufficient funds and can contribute 10% of the loan amount to your total education expenses, then SBI is the best-suited option for you, but if you want full coverage, then Credila is the right choice for you.

Processing Fee of Credila and SBI

Processing fee is another major factor of differentiation. Processing fees refer to the charges levied by financial institutions for processing and evaluating loan applications. The processing fee is a one-time payment, charged at the time of loan application, and is non-refundable, regardless of whether the loan is approved or not.

 

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  SBI charges a processing fee for education loans. The processing fee for SBI is INR 10,000 + GST. 
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  On the other hand, Credila also levies a processing fee for education loans. The processing fee is the percentage of the loan amount and ranges from 0.75% to 1.25% of the sanctioned amount, depending on various factors such as the loan amount, course, and institute. 

SBI Bank vs. Credila Education Loan Application Process

When it comes to applying for an education loan, SBI and Credila follow very different approaches. In case of an SBI education loan, the documentation is more extensive, especially for higher loan amounts that require collateral security. While Credila offers a much more student-friendly and faster process. 

SBI Education Loan Application Process:

You can apply both online and by visiting the branch to apply for SBI education loan.

 

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  Offline: Visit your nearest SBI branch and fill out the education loan application form.
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  Online: Apply through the PM-Vidya Lakshmi Portal, the government's single-window platform for student loans. Upon submission, you'll receive an acknowledgment email with a 12-digit reference number.
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  Bank will evaluate your loan application and verify your documents.
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  Once the loan application get approval, SBI issues a sanction letter.
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  Funds are disbursed directly to the educational institution as per the fee schedule.

Credila Education Loan Application Process:

Follow the steps below to apply for a Credila education loan.

 

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  Visit the official website of Credila education loan and fill out the loan application form.
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  Scan and upload the necessary documents required in the loan application form.
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  The financial institution will evaluate your loan application and documents.
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  Upon approval, Credila issues a sanction letter.
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  Once you sign the sanction letter, the lender will disburse the loan amount as directly to the institution.

Credila or SBI Education Loan: Which One Is Better?

Both Credila and SBI provide their own set of advantages when it comes to abroad education loans. However, the final decision depends on collateral availability, student eligibility, and financial requirements. 

To help you make an informed decision, we have listed some points that will help you choose between SBI and Credila.

 

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  If you can pledge collateral, then SBI is a viable option for you as they offer a lower interest rate on secured education loans.
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  If you lack collateral and want to avail of all the benefits of secured loans, then Credila is a viable option as they offer similar benefits at unbeatable interest rates.
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  Where SBI offers a higher amount of loans at a lower interest rate, Credila provides unsecured loans with zero margin money. 
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  While Credila specializes in unsecured loans and customized financial solutions, SBI, as a renowned public sector bank, offers secured loans at competitive interest rates. 

 

At last, the ultimate decision is based on an individual's requirements. If you can pledge collateral and have sufficient funds for margin money, then SBI is the best choice for you. Not only this, GyanDhan will additionally arrange a doorstep document pickup for you where our relationship officer will physically visit your house to collect documents and submit the same at the nearest SBI branch. On the other hand, if you have a co-applicant with a stable income and want funds on an urgent basis then Credila is a good option for you since they processes loans within 7 - 10 working days.

 

Now that you are aware of several differences between SBI and Credila, you can make an informed decision and start your abroad education journey by comparing each of the aspects with respect to your personal requirements. Take the first step towards your education abroad and find the perfect financing solution to fulfill your educational aspirations. With GyanDhan's seamless and hassle-free process, you can secure your education loan for studying abroad with ease from the comfort of your home. Don't let this opportunity slip away and check your loan eligibility now with GyanDhan.

 

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