When you’re planning to study abroad, the education loan part can feel more stressful than your university application. And the first confusion almost every student has is simple:
“Should I take a loan from a bank or from an NBFC?”
I had the same question. So I’m breaking it down in a way that actually helps especially when deposits and visa dates are stressing you out.
1) First, what is an NBFC?
An NBFC is basically a financial institution that can provide loans, including education loans, but it’s not a traditional bank.
Most students explore an NBFC option when they want:
- Quicker clarity
- Flexible structures
- Coverage for more study-related costs.
It’s not “better” or “worse” automatically. It depends on your situation.
2) Why students start with banks
Banks are the first choice for many students because they feel more familiar and “safe.”
Students usually like banks for:
- Structured loan process
- Well-known terms
- Clear documentation flow
- Strong credibility during visa processes (in some cases)
If your profile is straightforward, good co-applicant income, clean documents, and a recognized university bank can be a solid option.
But the issue is: not everyone has a clean, simple case.
3) Why students consider NBFC loans for study abroad
This is where things get practical.
Many students consider an NBFC education loan because study abroad costs don’t happen slowly. They hit you all at once.
For example:
- Your university may ask for a deposit to confirm the seat
- Your visa date might come early
- You might need flight tickets quickly
- Your accommodation deposit could be due before you even reach there
In these situations, students want a loan option that can match their timeline instead of making them wait.
Also, many students want coverage beyond tuition, like:
- Laptop
- Living expenses
- Forex conversion charges
- Travel costs
This is one reason NBFC loans stay popular among study abroad aspirants.
4) The biggest difference: timeline pressure (visa + deposit)
Let’s be honest: Most students don’t apply for loans 6 months in advance.
They apply when:
- The offer letter arrives
- Deposit is due
- Visa appointment is coming
- Family savings start feeling “not enough”
Banks can take time depending on the case and paperwork. An NBFC may feel faster for some students, especially when you want clarity quickly.
This matters a lot because delays can mess up your:
- Visa filing
- University deadlines
- Accommodation bookings
- Flight prices
And yes, flight prices are brutal when you book late.
5) Interest rates & cost: what students should think about
This part is important, and I’ll keep it simple.
You should not choose a loan option only because it feels “easy.”
Instead, compare:
- Interest rate
- Processing fees
- Repayment start date
- Moratorium period (if offered)
- Total repayment estimate
- Prepayment charges (if any)
A bank might offer a lower interest rate in some cases. An NBFC might offer different flexibility or quicker processing depending on the student profile.
So the smart move is not picking based on emotion, but comparing like a serious adult (even if you don’t feel like one yet).
6) Student checklist: bank vs NBFC (quick and clear)
Before choosing, ask yourself:
- Do I need the money urgently for deposit/visa?
- Is my co-applicant income strong and well-documented?
- Do I need the loan to cover living + travel + laptop too?
- How soon do I need sanction approval?
- Am I okay with a longer process if it saves money overall?
Also, don’t assume you’re eligible everywhere.
A practical step is to check your eligibility early, so you don’t waste time chasing options that may not fit your profile.
Quick checklist (save this before applying)
- Offer letter + fee structure ready
- Passport + basic KYC
- Co-applicant documents (income proof, bank statements)
- Total cost estimate (tuition + living + flight + forex)
- Deadline list (deposit date + visa timeline)
So… which one should you choose?
If your profile is clean and you have time, a bank can be a great option.
If you’re working with tighter deadlines, need broader expense coverage, or want quicker clarity, exploring an NBFC option can be practical.
The best decision is the one that matches your timeline, your budget, and your real needs, not what people on YouTube comments are fighting about.
Conclusion
The biggest mistake students make isn’t choosing the “wrong” loan provider.
It’s waiting too long and then rushing.
Whether you go with a bank or an NBFC, start early, compare properly, and plan your loan like you’re planning your future (because you are).
