IDFC First Bank vs. ICICI Bank: Which is Best for Abroad Education Loan?

In 2022, a record-breaking 7.5 lakh Indian students pursued higher studies abroad, a 70% increase from the previous year. Renowned private banks like ICICI Bank and IDFC First Bank have been instrumental in extending education loans to support these aspiring scholars, covering various expenses related to overseas education.

These banks offer comprehensive education loan products covering a wide range of expenses associated with studying overseas, including tuition fees, living costs, travel expenditures, and other related expenses.

Eligibility Criteria and Comparative Overview of IDFC First Bank vs ICICI Bank

The table provided offers a detailed comparison of the education loan features offered by IDFC First Bank and ICICI Bank. While the education loan products from both banks share some similarities, there are notable differences worth exploring. Let's now examine each aspect in detail to gain a comprehensive understanding of the distinguishing factors between IDFC First Bank and ICICI Bank as education loan providers, enabling you to make an informed decision.

Colleges Accepted By ICICI and IDFC First Banks

Both ICICI Bank and IDFC First Bank have pre-approved college lists. Loan quantum, interest rates, margin money, and processing fees are based on these lists and colleges.

ICICI Bank pre-approved college list:
A1 > A2 > A3 > A4

IDFC First Bank pre-approved college list:
Platinum > Titanium > Gold

As the table suggests, both ICICI Bank and IDFC First have approved colleges and institutes divided into lists according to their ranking and reputation. The loan amount and interest rate largely depend on these. Remember, any institution that is not included in these lists does not qualify for an education loan from ICICI and IDFC First Bank.

Maximum Loan Amount Offered by IDFC First And ICICI Bank

For abroad education loans, IDFC First Bank offers both secured and unsecured loan options. For secured education loans, IDFC provides up to INR 1 cr, whereas, for unsecured loans, the bank offers loans up to INR 75 Lakh.

On the other hand, ICICI Bank also provides both secured and unsecured loans. For secured loans, ICICI Bank offers loans up to INR 1 cr, whereas for unsecured loans the bank provides loans up to INR 40 Lakh, covering tuition fees, living expenses, examination fees, and other study-related costs.

So if you lack collateral and are looking for an unsecured loan and require a higher amount then IDFC First is a suitable option for you. 

Interest Rates of ICICI and IDFC First Bank

Interest rates play a crucial role in determining the overall cost of an education loan. Both IDFC First Bank and ICICI Bank offer competitive interest rates.

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  ICICI Bank’s interest rates range from 9.85% to 15.5%.

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  IDFC First Bank interest rates range from 11.5% to 12.25%.

Difference in Margin Money of ICICI and IDFC First Bank

Margin money refers to the part of the loan that the borrower is required to contribute to themselves, while the remaining amount is covered by the loan.

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  IDFC First Bank provides 100% financing and the margin money is nil. 

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  On the other hand, abroad education loans from ICICI Bank’s margin money based on the college lists. For list A1, 100% financing is provided, hence, the margin money is zero. For lists A2, A3, and A4, the margin money is 5% and 15% respectively.

Therefore, if you are a student who’s applying for a university that is listed in the A2, A3, and A4 of ICICI Bank then you can cross-check with IDFC First Bank, if your intended university is listed in their pre-approved list then you can secure 100% financing there.

If you require 100% financing and your university is listed in the A2, A3, or A4 list of ICICI Bank, it's advisable to check if your desired university is also included in IDFC First Bank's pre-approved list. If it is, you can secure 100% financing there without contributing any margin money.

Processing Fees of ICICI and IDFC First Bank

Processing fees in education loans are the fees imposed by financial institutions to handle and assess loan applications. These fees are paid once, during the loan application process, and are non-refundable, irrespective of whether the loan is approved or not.

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  The processing fees for abroad education loans from IDFC First Bank depend on the respective pre-approved college category. For platinum and titanium categories, a 1% + GST processing fee is charged whereas for the Gold category, a 1.25% + GST processing fee is charged.
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  For ICICI Bank, processing fees depend on the student’s profile and college list. Generally, the processing fees range from 0.5 - 2% + GST on the sanctioned amount.

IDFC First Bank's processing fee is relatively on the higher side, but the exact amount is determined by the bank and can vary depending on each individual's profile. If a student has a strong profile, the processing fee is negotiable, providing an opportunity for potential adjustments.

Work Experience Based Abroad Education Loan

ICICI Bank offers a unique product that caters to individuals with work experience who aspire to pursue higher education abroad. This unique product goes beyond traditional education loans and is tailored to meet the specific needs of professionals.

Eligibility Criteria

To be eligible for ICICI Bank’s work experience-based education loan, students must:

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  Have 2+ years of experience in the workforce
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  Have a minimum salary of 35,000
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  Open a fixed deposit account of an amount equivalent to the simple interest to be paid during the moratorium period.

Well both ICICI and IDFC First Bank have mostly similar education loan features. However, they differ on processing fees, insurance amounts, and work experience-based education loans. ICICI Bank offers an exclusive work experience-based education loan for professionals who have work experience and after working for several years want to go abroad to pursue higher education. However, any such product is not offered by IDFC First Bank. Apart from this, opting for insurance is not mandatory for ICICI Bank whereas for IDFC First Bank it is compulsory. On the other hand, the IDFC First Bank's processing fee is comparatively higher.

Repayment Options and Flexibility: IDFC First Bank vs ICICI Bank

Early Repayment Options:

IDFC First Bank:

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  Prepayment Charges: IDFC First Bank typically allows early repayment of education loans without any prepayment charges. This is an attractive option for borrowers who wish to clear their debt early without any additional costs.
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  Ease of Prepayment: Borrowers can prepay any amount as per their financial capacity, reducing the overall interest burden.

ICICI Bank:

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  Prepayment Charges: ICICI Bank also allows prepayment; however, charges may apply depending on the loan type and terms agreed upon. For secured loans, prepayment is often free after a stipulated period, while unsecured loans may attract minor fees.
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  Flexibility: ICICI Bank offers prepayment flexibility, but borrowers should confirm specific terms during loan sanctioning to avoid unexpected charges

Moratorium Period Benefits:

IDFC First Bank:

IDFC First Bank provides a moratorium till course completion with an additional buffer period of 12 months. During the moratorium, the bank may offer the option of paying simple interest, partial EMI, or full EMI depending on the borrower’s financial capacity.

ICICI Bank:

ICICI Bank provides a moratorium till course completion with an additional buffer period of 6 months. During the moratorium, the bank may offer the option of paying simple interest.

EMI Structure and Flexibility:

IDFC First Bank:

IDFC First bank offers loan tenure of 12 years.

ICICI Bank:

ICICI bank offers loan tenure of 8-12 years.

ICICI Bank vs IDFC First: The Right Choice

Both ICICI Bank and IDFC First abroad education loan benefits students with their specific individual unique features. However, the ultimate decision depends on the student’s preference and academic interest.

For your ease, we have listed some common scenarios that will help you decide on the right bank.

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  Check your intended institute in the pre-approved college list of both lenders.
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  If going for an unsecured loan then make note of your co-applicant’s monthly income and age. ICICI Bank requires a comparatively higher co-applicant minimum income than IDFC First Bank. So if your co-applicant earns up to INR 35K then IDFC First Bank is the right choice.
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  Check whether the bank operates in your location. IDFC First Bank operates in limited locations, whereas, ICICI Bank operates in almost all states and UTs.

Now that you have understood the differences and merits of both IDFC First Bank and ICICI Bank, you can make an informed decision. You can secure an abroad education loan from ICICI or IDFC First Bank, you can apply online at their website. However, for a hassle-free application and smooth process you can choose to apply for your education loan through GyanDhan, an online platform designed to assist Indian students in financing their education abroad. To start your process with us all you need to do is check your loan eligibility and leave the rest to us!

Frequently Asked Questions

What are the eligibility criteria for abroad education loans from ICICI Bank and IDFC First Bank?

 

The eligibility criteria for abroad education loans from ICICI Bank and IDFC First Bank include academic background, admission to a recognized institution, collateral availability, co-applicant requirements, and the applicant's creditworthiness.

Do ICICI Bank and IDFC First Bank offer collateral-free education loans for studying abroad?

 

ICICI Bank and IDFC First Bank offer collateral-free education loans for selected courses, institutions, and profiles.

What is the interest rates of ICICI Bank education loans?

 

The interest rates for education loans at ICICI Bank range from 10.85% - to 12.25%.

What is the interest rates of IDFC First Bank education loans?

 

IDFC First Bank's interest rate for education loans ranges from 11.5% - to 12.25%.

Are there any processing fees or additional charges associated with abroad education loans from ICICI Bank and IDFC First Bank?

 

Both ICICI Bank and IDFC First Bank charge processing fees. ICICI Bank charges 0.5 - 1% as processing fees on the sanctioned amount, whereas, IDFC First Bank charges 1 - 1.25% processing fees.

Do ICICI Bank and IDFC First Bank offer any special benefits or features for professionals with work experience pursuing higher education abroad?

 

ICICI Bank has specialized loan products designed specifically for professionals with work experience pursuing higher education abroad.