In a country like India,where development is in full swing and where great opportunities are pouring in, it has become extremely important for the younger generation to acquire quality education. It helps with them required skill sets and also teaches life skills which help them to lead quality life.
But due to low capita income of most of the population, it becomes difficult for students to pursue their education from reputed and institutions. In such cases, students can take education loans for help. In this regards, there are types of lenders you can choose from – Banks and NBFCs. The following article will tell you why the latter is always a better option for you.
- LESS DOCUMENTATION: NBFCs provide education loans which have simpler process and easier documentation. Usually, NBFCs require just two passport size photographs, identity and residence proof, Aadhaar card, PAN card, bank account statement, confirmation letter from institution defining your course details. A simpler documentation process will be advantageous to you because you can conveniently and comfortably arrange these documents which are very basic and will save your time and any last minute hassle.
- NO COLLATERAL:Some banks demand for collateral to provide education loans and it becomes difficult for students to provide collateral in the form of gold or land’s documents etc. In such cases it is preferable to take student loans from NBFCs because they do not demand for any collateral or any third party guarantee. This is one of the biggest reasons why you should opt for a non-banking finance company when in need of education loans.
- DOWN PAYMENT: Again, some banks ask students to provide some margin money to secure the loan. Therefore, students who borrow from banks could have to cover up to 15% of the cost of education on their own. This is a huge problem is the student is not in a financial position to offer such a down payment. Even if the student has the means to make the down payment, NBFCs allow them to use this money for an investment or keep in case of any emergency.
- NO LIMIT: Banks have limit on the amount you can borrow for education loans. NBFCs do not impose any restrictions on amount you borrow for student loans which is advantageous because you can borrow lump sum money covering all your expenses and reduce burden on parent.
- QUICK TURNAROUND TIME:In some banks the procedure to complete your process from applying loan to getting the loan sanctioned is very tedious. NBFCs are reputed as the one giving immediate services. The education loans through NBFCs complete the procedure within 24hours which is quite fast and helps the student for faster transactions.Hope, this article helps you to understand the guidelines to consider before taking education loan and what one should expect from lenders, also how to choose from banks and NBFCs. Wish you the best for future. Good luck and all the best!