For one, there are commercial banks under the regulation of reserve bank of India (RBI).Some non-banking financial companies (NBFCs) also provide education loans through their sponsors, some of them being: www.credila.com (HDFC); www.avense.com (DHFL); www.myuniverse.co.in (Aditya Birla); www.ibs.india.org; and www.ksfi.co.in Here ,banks definitely score over NBFCs due to their large branch network and greater transparency in their dealings.
You may be surprised to know that education loan has been more or less customised as a loan product by RBI.in fact, It was adopted as model loan product (for higher education in India and abroad) by Indian banks Association (IBA) in 2015 so that banks would be able to draft their own education loan schemes based on this model. It is available on the IBA website for public viewing.
There have been a slew of directions/guidelines in the matter of enabling students to get education loans faster as well as banks feeling safe in extending such loans to students (in spite of their status as non-earning individuals). These directions/guidelines are summarised here.
While sanctioning a loan, the bank will check if a student has actually secured admission to a course, the quality of the college and the course (whether it is recognised by the university grants commission or the all India council for technical education), and, where applicable, the credit history of the co-applicant or guarantor.
The most commonly required documents are a) proof of admission (educational loan cannot be applied without proof that admission has been secured in the selected institution; b) schedule of fees from the institution; c) mark sheet of the last qualifying examination; d) details/statements of bank accounts held by the student applicant for the last six months; and e) photographs Most banks ask you to start paying off the loan either six months or one year after you complete the course, or six months after you have secured a job, which ever happens first. It is important to remember that the higher the amount, the longer you get to repay. However, this does not mean that you are not changed any interest for that period. Although some banks may defer interest payment, interest is actually calculated from the day of disbursement of the loan.