HDFC Credila disbursement process

Did you know that the education loan sanction letter is valid for only six months and if you don't fulfill the disbursement formalities within the stated period of time, your loan application might get declined and you will have to redo the whole process?

This is a companion discussion topic for the original entry at

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.