HDFC Credila vs. ICICI Bank Education Loan: Which is the Right Choice for You?

So you have decided to take an education loan but lack collateral. Naturally, your next step is to Google "Education loan without collateral," and two industry giants pop up: ICICI Bank and HDFC Credila. Both ICICI Bank and HDFC Credila are leading private lending institutions in India, offering attractive education loans. Both offer exciting and impressive loan options, but which one is the best choice for you?

With competitive interest rates and flexible repayment options, these lenders provide various benefits to borrowers. More or less they offer similar education loan features but several hidden differences in them can completely change your decision. Keep reading this blog where we will compare HDFC Credila and ICICI loans for you.

Loan Amount Offered by HDFC Credila vs. ICICI Bank

When considering an education loan, it's essential to know the maximum amount each lender is willing to provide. The amount that the banks are willing to offer you as an education loan depends on the type of loan, chosen course and country, your academic profile, and your co-applicant's creditworthiness.

At first glance, ICICI Bank seems like the obvious choice for higher loan amounts. However, ICICI Bank has a pre-approved list of institutes eligible for loans.

Interest Rates of HDFC Credila vs. ICICI Bank

The interest rate on an education loan is a crucial factor that determines the cost of borrowing money for educational purposes. It is the percentage charged on the loan amount by the lender and can significantly impact the total amount you will need to repay over the life of the loan.

• Floating Rates: Interest rates are floating and may change over time. Always verify the current rates with banks or loan counselors at GyanDhan.
• Impact of Interest Rate: Even a 0.5% difference in interest rates can save you lakhs over the loan period. 

Processing Fee of HDFC Credila vs. ICICI Bank

The processing fee for an education loan is an upfront charge levied by lenders to cover the administrative costs associated with processing and sanctioning the loan. Think of it as a service charge.

The processing fee covers the expenses incurred by the lender in assessing the loan application, conducting credit checks, and processing the documentation. It is typically a one-time fee charged at the time of loan disbursement.

*Note that this fee is non-refundable.

Co-Applicant's Income Requirement of HDFC Credila vs. ICICI Bank

A co-applicant, often a parent or guardian, acts as a financial backer for the loan, providing additional assurance to the lender about the borrower's ability to repay the loan. The co-applicant provides a financial guarantee, sharing responsibility for repaying the loan in case the primary borrower cannot do so.

Both ICICI Bank and HDFC Credila require a co-applicant for unsecured loans. A co-applicant shares responsibility for loan repayment if the borrower fails to repay.

*Your co-applicant can be a parent, sibling, spouse, or relative.

Choosing Between ICICI Bank and HDFC Credila

When it comes to choosing between ICICI Bank and HDFC Credila for education loans and deciding the best education loan in India, there isn't a definitive winner as both lenders offer unique features tailored to different needs.

ICICI Bank stands out with its unique product designed specifically for individuals who have work experience and wish to pursue higher education abroad. 

• This product requires applicants to have at least three years of professional experience and a minimum salary of INR 35,000, depending on the loan amount. 
• One of the key benefits of ICICI's offering is that during the moratorium period, no payments are required, although a fixed deposit (FD) is needed as security. 

* The advantage here is that the FD continues to earn regular interest, which is unlocked after the loan repayment period, providing a financial cushion.

HDFC Credila offers a distinct advantage in terms of tax benefits, being the only Non-Banking Financial Company (NBFC) in India that provides tax benefits on education loans under Section 80E of the Income Tax Act. 

• Borrowers can claim a tax deduction for up to eight consecutive years starting from the year they begin repaying the loan, or until the interest is fully repaid. 
• This can significantly reduce the financial burden during the repayment period, making it an attractive option for those who prioritize tax savings.

If neither option suits you, explore other public banks, private banks, and NBFCs.Compare education loan options from different lenders and understand their eligibility criteria, gather the required documents, and apply. Alternatively, connect with education loan experts at GyanDhan, who can handle the entire education loan process for you, from comparing lenders to initiating loan applications, and providing a customized document checklist—all for free. Wondering how to start? Start today by checking your loan eligibility now.

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