Credila Education Loan Interest Rate & Other Details

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Credila education loan interest rateThe Credila education loan interest rate is a common concern for students who wish to borrow an HDFC education loan for abroad. The HDFC education loan for abroad is granted by Credila, a subsidiary of the bank which specialises in granting only unsecured education loans for abroad studies to eligible candidates. Since the Credila education loan interest rate is revised from time to time, it is very important for all the education loan applicants to have a clear understanding of how the HDFC education loan interest rate is calculated and also the repayment policies for the same.

As is the case with most lenders who lend unsecured education loans for abroad education, the Credila education loan interest rate varies for different loan applicants, depending on various factors of their profile. This article will give you an elaborate explanation about how the HDFC credila interest rate is calculated, the various factors which are responsible for the final Credila education loan interest rate values, etc.

Credila Education Loan Interest Rate 2020: How Is it Calculated?

The HDFC Credila education loan for abroad studies is mainly granted to candidates who are in need of funds to support their higher education abroad. The HDFC education loan for abroad is granted through Credila which is its subsidiary company. Credila specialises in granting abroad education loans to students who have been enrolled into undergraduate, postgraduate, as well as other post-doctoral courses at prestigious universities located in countries like the USA, UK, Canada, Australia, New Zealand, etc.

The HDFC Credila education loan interest rate for HDFC education loan for abroad is mainly calculated on the basis of a benchmark rate called the CBLR. This is Credila’s Benchmark Lending Rate for abroad education loans.

The current Credila CBLR is set at 12.55%. However, this figure may vary depending on a couple of factors of a candidate’s profile.

Read more about Education loan transfer: Things to know!

Factors That Affect The Credila Education Loan Interest Rate

Most NBFCs (Non-Banking Finance Companies) like Credila provide unsecured education loans to candidates in need. As Credila majorly deals in providing HDFC education loan for abroad without collateral, the rules and regulations set by Credila regarding the Credila education loan interest rate are more stringent as compared to those of government bank education loans. Candidates who fulfill the following requirements are deemed as eligible to apply for an HDFC education loan for abroad.

HDFC Credila Education Loan Eligibility Criteria for Students:

  1. The student should be an Indian citizen, residing within India.
  2. The student should have already secured admission into a university/college for the course specified in their Credila education loan application.
  3. The co-borrower or the co-applicant for an HDFC education loan must be an Indian resident.
  4. Co-applicants must have an account in any Indian bank with cheque-writing facilities.

HDFC Credila Education Loan Eligibility Criteria for Co-applicants/co-borrowers:

  1. In order for candidates to enjoy the complete benefits of the Credila education loan interest rate, it is mandatory to name individuals having a stable financial back-up as co-applicants.
  2. Candidates have the liberty to name their Father / Mother / Brother / Sister (married) /Spouse, as co-applicants where such Co‐applicant’s income would be considered in determining the loan eligibility per HDFC Credila’s credit and underwriting norms
  3. The co-applicants are equally liable to complete the education loan repayment on time as the students.
  4. All co-applicants are supposed to submit the relevant education loan documents at the time of applying for an HDFC education loan. 
Read More about HDFC Education loan: Interest rate and its Pros and Cons

Does Credila Actually Charge Simple Interest During the Moratorium Period?

This is the question which every candidate must ponder on before proceeding ahead with their education loan application process with HDFC Credila. It is common knowledge that all NBFCs charge interest during the course period for all candidates who have borrowed an abroad education loan.

Many of the education loan repayment terms of a Credila education loan without collateral is similar to those of most NBFCs. Like all major NBFCs, HDFC Credila also claims to charge simple interest during your moratorium period. When you carefully go through their FAQs on the education loan repayment rules, you will find certain statements that will point out the fact that this is not the case.

According to the HDFC Credila education loan repayment terms and conditions, all applicants are promised that the Credila education loan interest rate charged during the moratorium period is calculated on the basis of the simple interest concept.

You may come to observe that their website does not give a clear cut explanation on their policies regarding the interest payment during the moratorium period. It is written on the website that if candidates wish to avoid paying ‘interest upon interest’ during their moratorium period, then they should pay their monthly interest amount without any delay. 

This statement indirectly states that should candidates default on their education loan interest payment at any point during their moratorium period, the balance amount will be accumulated and compounded at the end of that particular year. Food for thought, right? 

It is extremely important to go through the loan repayment terms and the Credila education loan interest rate conditions before deciding to borrow an HDFC Credila non-collateral education loan to support your higher studies abroad.

The 12th episode of Loanflix which is a set of informative videos explaining the various aspects of a typical abroad education loan process in India, exposes this particular issue. You may also refer to the same to get a clear understanding of the HDFC Credila education loan interest policies.

The HDFC Credila Education loan interest rate 2019 or the HDFC Credila CBLR is 12.55%. This is subject to change from time to time.

abroad education loan

HDFC Credila Interest Rate: The Partial Interest Payment Issue

It is common knowledge that most NBFCs, including HDFC Credila, allow students to make their interest payments partially during their moratorium period. Have you ever wondered whether this is actually beneficial to you as a loan applicant? 

The option of paying partial interest during the moratorium period may sound like a boon to most students who are still pursuing their higher education and are in the midst of their moratorium period. But you need to understand that the remaining interest amount will be again compounded and added as accumulated interest along with your principal amount at the end of that particular year. 

It is similar to your credit card bill payment. You will be able to use your credit card after having paid the minimum dues for the month. However, you fail to understand that interest is charged on the unpaid amount at the end of each month and finally, your debts increase manifold.

The partial interest payment of an HDFC Credila non-collateral loan is somewhat similar to this system. This is the second important point to note.

If you have already availed an HDFC Credila abroad education loan and wish to switch to another lender due to any reason, do get in touch with the WeMakeScholars financial team. As they are funded by the Ministry of I.T., their services are absolutely free of cost.

abroad education loan

Credila Education Loan Interest Rate: Monthly Interest Payment

Did you know that HDFC Credila charges monthly interest on their non-collateral education loans? And this information is provided on their website, again within the FAQs section. This tells you that they may not follow a uniform method during your loan repayment tenure.

HDFC Credila Review: What Are Some of The Issues Faced by Students Who’d Borrowed a Credila Education Loan for Abroad?

Rejection of  Loan Applications without any prior intimation or explanation

Most of the HDFC Credila education loan reviews posted on Quora mention this as the number one reason why the firm is not recommended for non-collateral education loans. The reason why Credila still does this is not very clear. However, if you are considering borrowing a Credila education loan without collateral, you should know that this is a possible scenario. 

If you have faced a similar hurdle during your HDFC Credila non collateral loan process and are looking for an alternative to fund your higher education, request a callback with our team. We have an excellent team of professionals who have made it possible for students to get abroad education loans even in the worst of the situations.

The sudden hike in Credila interest rates

The reason behind this is that many NBFCs, including Credila, faced a major financial setback in the previous year. As a result, the Credila interest rates were changed without intimating their students in advance. This was a major inconvenience to all their loan applicants.

Lending or borrowing non-collateral education loans is a risk for both parties, the lender as well as the borrower. You may not find many sources on the internet that will give you a clear-cut idea of what happens when you borrow education loans from different lenders. With this blog, we intend to relay the right kind of information so that students could avail the best of any abroad education loan scheme offered by any lenders in India.

Note: WeMakeScholars is an organization funded and supported by the Government of India that focuses on International Education finance. We are associated with 10+ public/Pvt banks/ NBFCs in India and help you get the best abroad education loan matching your profile. As this initiative is under the Digital India campaign, it’s at free of cost. The organization has vast experience dealing with students going to various abroad education destinations like the US, Canada, UK, Australia, Germany, Sweden, Italy, China, France among others

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Bibliophile, wanderer, major foodie. I write too :)

 

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