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Compare HDFC Credila vs. Avanse education loans. Understand their interest rates, eligibility criteria, benefits, and find best option for your higher education.
Non-Banking Financial Companies (NBFCs) have made a significant impact on the Indian market for study abroad education loans since their establishment. According to CRISIL (Credit Rating Information Services of India Limited), education loans by NBFCs have an expected growth of 35% - 40% to around INR 35,000 Cr in the financial year 2023-24.
Two prominent players in the NBFC space catering to the higher education aspirations of Indians are HDFC Credila and Avanse. Unlike many traditional banks that require collateral for loans exceeding INR 7.5 Lakh, these NBFCs offer flexible options. Students can avail education loans for higher amounts, either with or without the need for collateral security, making the dream of studying abroad more attainable for many.
Education loans offered by HDFC Credila and Avanse share many common features. They cover 100% of your expenses, unlike education loans from banks. You can get secured or unsecured education loans of high amounts, but collateral security is mandatory for bachelor’s courses.
See the table below for a comparison of Avanse vs Credila education loan features:
Features | HDFC Credila | Avanse |
---|---|---|
Maximum loan amount |
INR 20 - 75 Lakh |
INR 20 - 75 Lakh |
10.5% - 12.5% |
11% - 13% |
|
Course period + 1 year |
Course period + 1 year |
|
Simple Interest (SI) or partial Simple Interest (PSI) |
Simple Interest (SI) or partial Simple Interest (PSI) |
|
Processing fee |
0.5% - 1.5% of the loan amount + GST |
1% - 2% of the loan amount + GST |
Loan tenure |
12 - 15 years |
12 - 15 years |
Nil |
Nil |
|
Minimum co-applicant income (negotiable for secured education loans) |
INR 30,000 - 60,000 |
INR 30,000 - 60,000 |
Loan Approval Based on GRE / GMAT? |
Yes |
Yes |
Give Pre Admission Loans |
Yes |
Yes |
Credit life insurance premium |
1.25% - 1.5% of the loan amount |
1.25% - 1.5% of the loan amount |
*Interest rate as on July 2024
As the table shows, the features of education loans by HDFC Credila and Avanse are almost the same. Let’s see the unique features of both lenders to decide which is better for you.
Founded in 1977 for housing loans, HDFC Credila became a dedicated NBFC for education loans in 2006, making it the oldest NBFC in India dedicated to education loans. The following points explain what makes HDFC Credila unique:
HDFC Credila Review:
An applicant, aged 38, faced challenges in securing an education loan due to age-related criteria often imposed by lenders. However, GyanDhan successfully assisted him in obtaining an unsecured loan from Credila.
Founded in 2013, Avanse financial services offer customized education loans for deserving students to study abroad. The major features of Avanse include the following:
Avanse Education Loan Review:
A student faced multiple rejections from lenders like Credila and Auxilo due to a poor CIBIL score. Despite these setbacks, team GyanDhan helped her secure a loan from Avanse, even without an offer letter. Understanding her financial challenges, we also assisted with a partial processing fee, with the rest to be paid after receiving the admission letter.
Interest rates are a crucial factor when selecting an education loan, as they determine the total cost of borrowing and affect your repayment amount. Both HDFC Credila and Avanse offer floating interest rates for education loans, which means that the rates can fluctuate over time based on market conditions.
Floating interest rates are variable and can change periodically. They are typically linked to a benchmark rate such as the Marginal Cost of Funds based Lending Rate (MCLR) or the Repo Rate set by the Reserve Bank of India (RBI).
See the table below for country-specific interest rates on education loans by HDFC Credila and Avanse:
Country | HDFC Credila | Avanse |
---|---|---|
Australia |
12% - 12.5% |
12.5% - 13% |
Canada |
12% - 12.5% |
12% - 13% |
Germany |
12% - 12.5% |
12.5% - 13% |
Ireland |
12% - 12.5% |
12.5% - 13% |
New Zealand |
12% - 12.5% |
12.5% - 13% |
UK |
12% - 12.5% |
12.5% - 13.% |
US |
11.5% - 12.5% |
11.75% - 13% |
*Interest rate as of August 2024
The interest has to be paid in the moratorium period. Generally, the interest rates are lower for STEM courses and are flexible for students with high academic merits and co-applicant income.
When selecting an education loan, the country and course of study can significantly influence the loan terms and conditions. HDFC Credila and Avanse both offer customized loan packages that consider the specific financial requirements associated with studying in different countries. The maximum loan amount offered by these lenders can vary based on the country of study due to differences in tuition fees, cost of living, and other expenses. Since the cost of study and living is different, the maximum loan amount changes for different countries abroad.
Here is the list of top countries to study abroad and the maximum loan amount by HDFC Credila and Avanse. Under the maximum amount, you can see the minimum income of the co-applicant (known as FOIR - Fixed Obligation to Income Ratio) required for an unsecured education loan.
Country | HDFC Credila | Avanse |
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Note: For the top 100 QS-ranked universities, Avanse can offer education loans up to INR 40 Lakh.
An important factor in selecting an education loan is its repayment tenure. HDFC Credila and Avanse offer a longer repayment period of 12 - 15 years. The repayment will be in Simple Interest (SI) or Partial Simple Interest (PSI), depending on various factors such as the country and course of study. The repayment period includes the moratorium period.
Generally, STEM courses are given the option of PSI, whereas non-STEM courses are given the option of SI. The interest repayment starts after the loan is disbursed.
HDFC Credila and Avanse benefit the students in their own ways. Deciding which is better for you depends on your eligibility and preference. However, the following points may help to decide which is better for you among HDFC Credila and Avanse:
If you are eligible, an education loan from HDFC Credila can be prioritized for its tax benefits and interest concessions. Even a small difference in the tax will save you lakhs as the repayment is a matter of 10 - 15 years for an education loan. But that doesn’t make Avanse an inferior choice because it is highly flexible for your needs and situations. To find a solution, estimate your monthly EMI using a calculator and compare HDFC Credila and Avanse loan products to see the difference and make the right choice.
As a matter of fact, your choice matters only if you match the eligibility criteria set by the lenders. Ensure you are eligible for an education loan from HDFC Credila or Avanse. It is advisable you explore the best education loan options available for your profile besides HDFC Credila or Avanse since your aim is to get the best education loan. Wondering how can you connect with multiple lenders at one place? Well, look no more! GyanDhan is here to simplify your hunt for the best education loan deal. We evaluate your profile and compare more than 15 lenders for you in one go. Not only this we accompany you throughout your education loan journey and provide post loan disbursement services as well. And the best part is all this comes for free. So to grab the best education loan deal check your loan eligibility with GyanDhan today!
Depending on your eligibility, HDFC Credila or Avanse can be the better option. Both lenders offer education loans up to INR 75 Lakhs for MS in the US.
So, if eligible, HDFC Credila can be the better lender. But as the list of eligible universities is limited for HDFC Credila, make sure your university is eligible for an education loan from HDFC Credila.
HDFC is a private sector bank in India, whereas HDFC Credila is an NBFC for education loans. HDFC Credila is an HDFC. Ltd subsidiary company. HDFC Credila is closely linked to HDFC Bank, so it is possible to get an education loan from HDFC Credila against a property mortgaged with HDFC Bank.
The loan processing fee is the amount the lender charges to process and evaluate the loan application. The processing fee for HDFC Credila and Avanse education loans is fixed, which is 1% - 2% of the loan amount plus GST.
Compared to banks, the loan processing time is lesser for NBFCs like HDFC Credila and Avanse. It takes around 7 - 10 days after document submission to get an education loan from HDFC Credila and Avanse.
Compared to HDFC Credila, Avanse has a higher acceptance rate of applications. However, operations of Avanse are restricted to select cities and do not penetrate to remote or rural regions. On the other hand, HDFC Credila offers education loans to more states and Union Territories than all other NBFCs.
Yes, Avanse is a good choice for education loans, particularly for studying abroad. They offer customized loan solutions with competitive interest rates and cover a wide range of expenses, including tuition and living costs. Avanse provides flexible repayment options and quick loan processing, and they offer unsecured loans for eligible students, eliminating the need for collateral.
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