All About HDFC Credila Disbursement Process | GyanDhan

Published date: 24 Jul 2020 Updated on: 24 Jul 2020 Abroad education loans come with their share of specific demands and requirements for eligibility. Often with multiple challenges and issues such as the value of the collateral not being enough, or margin money, students find no suitable lender to fund their education leading to an upsetting experience. To solve such challenges, HDFC Credila offers customized education loans and unique solutions to the students. Offering education loans for more than 35 countries, it is one of the most preferred lenders in the market.  In This Blog, We Will Discuss The Various Features of the Credila Education Loan and a Detailed Explanation of the Disbursement Process.  What Are The Steps To Be Taken Before The HDFC Credila Disbursement Process?  The HDFC Credila Education Loan Process is Pretty Simple -   Apply For The Loan - You can apply for the loan on GyanDhan’s portal after a thorough discussion about the loan scheme with our executive. Our executive will help you understand the loan features, benefits, requirements, and everything else that you should know about the loan. The counselor will ask you a few questions to understand the case deeply and will then suggest the best possible loan option to you. He/she will then help you in the entire loan application and disbursement process free of cost. Submit Documents - You can see the document checklist on GyanDhan website and can upload all the required documents there itself. Our education loan counselor will help you in case you find any difficulty in understanding the documents or in uploading the same. Loan Sanction - Once the documents are submitted and verified, the further process includes checking the credit history of the borrower and co-borrower, co-applicant's monthly income, and risk assessment of the applicant. Based on this information, the loan is either sanctioned or declined.  On successful application, HDFC Credila education loan sanction letter is issued within 24 hours of paying the processing fee. This letter can be used in your visa application or used as a ‘proof of funds’ in US universities.  Along with the sanction letter, an initial loan agreement and other documents relating to the loan process, such as power of attorney, will be sent to you. Read the loan sanction letter and the loan agreement carefully. After a final review, sign the agreement accepting the conditions and send it back to the lender.   Loan Agreement - The final loan agreement is made when all the original documents are submitted and additional information regarding disbursement is conveyed, such as the date of disbursement, amount of disbursement, and method of disbursement. This final loan agreement needs to be signed by the applicant, co-applicant, and guarantor (if any).  What Are The HDFC Credila Documents Required For The Loan Disbursement?  Signed final loan agreement Original KYC documents of the student, co-applicant, and guarantor Two original copies of the completed ECS Mandate Form signed and stamped from your bank. You can get the ECS Mandate Form from Credila, which will then be signed and stamped by the bank from which you will be making monthly loan repayments. After deciding the date of disbursement, submit one of the original copies to the bank manager for their records. Alternatively, the co-applicant can fill a NACH form providing the details of the account from which monthly interest payments will be deducted.  The co-applicant will have to submit 9-12 post-dated cheques as security, in case the co-applicant is unable to make an interest payment in a particular month.  Cheques favoring HDFC Credila Financial Services Pvt. Ltd. as security from the bank account from which the ECS Form will also have to be submitted. What Is The HDFC Credila Disbursement Process?  Once the loan sanction letter and the initial loan agreement are signed and sent to the lender, you will have to decide - The Date of Disbursement - the exact date of the first disbursement can either depend on the visa application or the last date of tuition fee payment. Disbursement Amount - you will have to decide the amount for the first disbursement for tuition fees and living expenses.   Method Of Disbursement - you will have to provide the exact details for transferring your tuition fee and living expenses. It could be a wire transfer or forex transfer. This information will be provided by the university along with your admission package.  Upon receiving this information, the lender will prepare a final loan agreement. This final agreement will have to be signed by the student, co-applicant, and guarantors (if any).  Along with the final loan agreement, the above-mentioned documents have to be submitted to proceed with the disbursement.  A separate loan account with HDFC is also opened in the name of the student where the amount for living expenses and other daily expenses are transferred.  For further transactions of further semesters, student/co-applicant can reach back to the Credila team for making the payments to the university. If there’s any delay in disbursement, student can contact GyanDhan to get it done swiftly.  If the student has already paid the tuition fees, they can get the amount reimbursed by submitting the photocopy of the fees paid receipt.  What Are The Benefits of HDFC Credila Education Loan?  100% Finance - HDFC Credila is one of the few lenders in India that offer an education loan covering 100% of the expenses incurred - tuition fees and living expenses - effectively meaning that there is no margin money.    Loan Sanction Before Admission - Most lenders in the market sanction the loan only after proof of admission is submitted. It gets further complicated when US universities demand proof of funds or ‘availability of liquid funds’ to get admission. HDFC Credila, therefore, sanctions the loan before the admission letter. An HDFC Credila Loan Sanction letter can be used to show the availability of funds, as well as for visa purposes. Tax Benefits - Under Section 80E of the Income Tax Act of India, 1961, the interest paid on a loan can be claimed as a deduction. To avail of these benefits, you must take an education loan either from a scheduled bank in India or HDFC Credila. Incidentally, HDFC Credila is the only private financial institution that can offer such a benefit.  Quick Process - The entire loan process can take 15 days from the date of the loan application. The sanction letter is provided within 7 days from the date of applying and the disbursement is made in another 7 days from the date of receiving all the documents. You can, however, further reduce the time by applying for the loan via GyanDhan. Our executives work closely with the bank officials and will assist you with application, documentation, etc. Repay The Loan From The US - Credila offers the students the option to repay their loan from the US in US dollars.  Want To Apply For HDFC Credila Abroad Education Loan? Fill the form below and get free personalized assistance What Are The Features Of The HDFC Credila Education Loan?  Loan Amount - One of the best features of the HDFC Credila education loan is that there is no cap on the maximum amount that can be borrowed.  Interest Rate - HDFC Credila education loan interest rate has two components - Credila’s Benchmark Lending Rate (CBLR) + Spread. The current CBLR is 12.30%. Spread is calculated on the risk profile of the case, which is based on a number of factors such as academic background, employability of the selected course and college, financial strength of the borrower, etc. Therefore, the interest rate offered is fluctuating and can vary depending on the student’s case. Eligibility - HDFC Credila Education loan eligibility is rather straightforward. The borrower and the co-borrower must be Indian citizens. The co-borrower must have a bank account in any bank of India with cheque writing facilities.  Processing Fees - HDFC Credila processing fee, known as Origination Fees, includes all the legal fees and registration charges.  Repayment Tenure - Credila offers 10 years as the loan tenure. The tenure includes the duration of the study + Grace period after the study period + Repayment period.  Moratorium Period - The co-applicant will have to make simple interest payments after disbursement of the first installment. EMI (principal + interest) will be made after the completion of the studies and the grace period.  What’s The Advantage of GyanDhan Gateway For Education Loan?  We have partnered with HDFC Credila to make the loan process smooth, quick, and hassle-free. The HDFC Credila Education loan has multiple steps, requires a branch visit, multiple document submissions, and the student will have to coordinate with the bank to get the process done in 15 days.  With GyanDhan, however, your education loan process will be complete within 5 to 7 days without breaking your back. Our education loan counselors will assist you throughout the loan process, provide a customized document checklist, help in arranging the documents on time, coordinate with the bank officials, and solve any problems or issues that crop up. You can submit all your documents on our website and make yourself free from all the hassle of running from pillar to pole for the process.  You can apply for the loan via GyanDhan and track your loan process on the dashboard of your GyanDhan account. Check your loan eligibility right away to initiate the loan process.


This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/hdfc-credila-disbursement-process

During the study duration, what kind of interest do we have to pay?

You will have to make simple interest payments immediately after the disbursement of your loan and during your study period. Your EMIs (principal amount + interest) will start once your study period ends.

Is there any income tax benefit on the interest paid? I’ve read that loan taken from NBFCs are not eligible for it?

Also, who can be a co-applicant for the loan taken from Credila? Can friends be co-applicants?

Yes, there is an income tax benefit on the loan taken from Credila. You can claim tax deduction on the interest paid under Section 80E of the Income Tax Act. In fact, HDFC Credila is the only NBFC that is eligible for the said tax benefit.

Co-applicants can be your family members. Your friends cannot become your co-applicants. Co-applicants have to make simple interest payments during the study period and therefore, they are not accepted as co-borrowers. Your friends, at best, can be guarantors.

Should I take a loan from Prodigy or HDFC Credila? Which lender would be better for an education loan?

Both lenders have their benefits. The main aspect that should be taken into consideration is the currency in which the loan is given. HDFC Credila gives loan in INR, whereas Prodigy gives loan in USD, Pounds Sterling and Euros.
From an Indian student’s perspective, it is always better to take loan in INR than in any other currency mainly because of the fluctuations in the currency exchange rate. The value of the Dollar keeps rising against the rupee resulting in the student paying more than they had initially borrowed. I’d advise you to first explore Indian lenders for a loan before you move on to international lenders.