HDFC Credila vs. Union Bank of India: Which Education Loan is Right for You?

Imagine securing a 40 Lakh education loan from a public bank without any collateral and with interest rates starting at just 9.75% from a public bank in India. Add to that the possibility of enjoying tax benefits under Section 80E with an education loan from a Non-Banking Financial Company (NBFC). 

But which is the best lender? Which lender offers the best education loan deal? This confusion is a common scenario many students face when deciding between the Union Bank of India (UBI) and HDFC Credila. The choice between these two giants in the education loan market is confusing. To help you make an informed decision this blog offers a comparative analysis of the top four differences between HDFC Credila and UBI.

1. Bank vs. NBFC: Understanding the Basics

Union Bank of India (UBI), being a public bank, offers various banking services along with education loans, making it a more rounded financial solution. In contrast, HDFC Credila, a Non Banking Financing Company (NBFC) is focused solely on education loans, offering tailored solutions for students.

2. Loan Amount: How Much Can You Borrow?

When it comes to loan amounts, UBI can offer higher amounts due to its government backing. For collateral-based loans, both UBI and HDFC Credila can finance up to ₹1.5 Crores. However, for unsecured loans, HDFC Credila offers a higher limit of ₹75 Lakhs compared to UBI’s ₹40 Lakhs.

3. Interest Rates: What Will You Pay?

Interest rates are often the deciding factor when choosing an education loan. UBI offers a lower starting interest rate of 9.25%, making it an attractive option for those looking to minimize their repayment burden. HDFC Credila, on the other hand, starts at 11.25% but offers flexibility in loan structuring based on your profile.

4. Processing Fees: What’s the Cost?

Processing fees can add to the overall cost of your loan. UBI charges a processing fee between INR 10,000 to INR 20,000. On the other hand, HDFC Credila charges a percentage of the loan amount, which is generally non-refundable.

Making the Right Choice: UBI or HDFC Credila?

Choosing between UBI and HDFC Credila ultimately depends on your specific needs and priorities. Here's a quick recap to help you decide:

• Union Bank of India (UBI): Ideal for those looking for lower interest rates, higher loan amounts, and the reliability of a public sector bank.
• HDFC Credila: Best for students who need customized loan solutions, quicker processing times, and are looking to take advantage of tax benefits under Section 80E.

If neither lender meets your specific requirements, it's worth exploring other options. There are several banks, NBFCs, and even international lenders offering education loans without collateral or co-applicants.

Navigating the education loan process can indeed be overwhelming, but with GyanDhan by your side, it doesn't have to be. Our experts will guide you through every step of the process, ensuring a smooth and hassle-free experience. And if you hit a roadblock, we'll work directly with the lender's higher management to resolve any issues.

Ready to take the next step? Check your loan eligibility now!

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