Difference Between Education Loans Offered By Banks And NBFCs 

Looking for education loans?

You can choose from bank and NBFCs and get the funds. But what’s the difference between the two? 

Let’s decode.

Interest rates

Banks usually offer education loans at lower interest rates compared to NBFCs. So, your EMIs would be different across these institutions.

Interest subsidy

The government offers interest subsidy on the loan to eligible students. This subsidy is available with bank loans, not with NBFCs.

Tax deduction

Interest paid on education loans financed by banks is allowed as a deduction under Section 80E. For NBFCs, the deduction is available only if the NBFC is notified by the CBDT.

Preferential rates

Some banks might offer preferential interest rates for meritorious or female students. No such benefits are available with NBFCs.

Processing fee

Banks usually charge a lower processing fee compared to NBFCs on the education loans offered. This also brings down the added expense on the loan.

Know the differences and choose the right lender like Metra Trust. Get unsecured education loans up to Rs 50 lakhs at attractive rates.