Indian Banks vs NBFCs: Why Some Study Abroad Loans Get Approved Faster Than Others

For thousands of Indian students planning to study overseas, arranging finances is often more stressful than securing admission. Even after receiving an offer letter from a reputed international university, many students find themselves stuck at one crucial stage—education loan approval. Some loans are sanctioned within days, while others take weeks or are rejected outright. The difference usually comes down to one choice: Indian banks vs NBFCs.

This blog breaks down why approval timelines vary so widely, how lenders assess applications, and what students should realistically expect when applying for a student loan for overseas education.

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Why Loan Approval Speed Matters for Study Abroad?

Letters issued by universities overseas normally have hard deadlines of paying the fees. They are also required to produce evidence of funds usually in the form of a sanctioned loan letter when doing visa applications. One week or even two weeks delay can lead to the intake being postponed or the visa slot being lost.

According to RBI education loan data, public sector banks still account for a large share of student lending, but NBFCs have rapidly grown in the overseas education segment due to faster processing and flexible eligibility norms

How Indian Banks Evaluate Study Abroad Loans?

Indian banks, especially public sector banks, follow a risk-first approach.

Their assessment of loans is policy-based and very standardized. The process of applications goes through several levels of verification such as branch checks, regional checks and credit committees. Banks prefer loans that are secured by collateral and good co-applicants. Students applying for an education loan for higher studies abroad are assessed on the basis of university ranking, course employability, academic consistency, and family income stability.

While bank loans often come with lower interest rates, the approval process is slower because every deviation from policy requires additional justification.

How NBFCs Approach Overseas Education Loans?

NBFCs operate with a student-first and market-driven approach. Their core business in recent years has focused on international education financing. Instead of rigid templates, NBFCs use technology-led credit assessment models.

They evaluate employability potential, country-specific job markets, and post-study income projections. This approach allows NBFCs to support students pursuing specialized or emerging courses, even when collateral is limited or absent.

Many NBFCs have dedicated verticals focused solely on how to get education loan for abroad studies, which significantly reduces turnaround time

Why NBFCs Often Approve Loans Faster?

The greatest rationale why loans are granted by NBFCs at a quicker rate is flexibility in operations. The decisions are centralized, documentation is simplified and computer processing eliminates human bottlenecks. NBFCs are also less reluctant to look up to future earning prospects than just current financial positions.

Students going to high demand areas like data science, AI or healthcare tend to graduate sooner due to the fact that the risk models already take into consideration employability trends. According to one of the industry reports, speed has ceased to be a luxury in education funding and it has become a necessity.

Key Factors That Impact Loan Approval Timelines

Several elements determine whether a loan is approved in days or weeks. The choice of lender is just one part of the equation.

• Ranking of the universities and the country of studies has a significant influence since lenders have their own lists.
• Relevance of the course to the job markets in the foreign countries will have a direct impact on risk assessment.
• The credit score and income stability of the co-applicants affect the rate of approval.
• Availability of collateral can either accelerate or slow down processing.

Students often assume rejection is personal, but in reality, it is usually policy-based.

Choosing the Right Lender for Your Profile

There is no better alternative here. Right lender is based on your academics, country of destination, schedule and financial structure.

NBFCs are usually advantageous to students with urgent visa applications or lack of collateral. Banks may be preferred by people who plan way ahead with stable co-applicants. Many contemporary students consult financial advisors to compare the two so that their loans can not only support their plans to study abroad but also avoid postponing them.

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Final Takeaway

The key to fast loan approval is not related to luck. Approvals are fast when the profile aligns with the lender’s risk appetite, for which you can get expert help from a study abroad consultant. It is important to understand the structural differences between Indian banks and NBFCs, as this knowledge will help students make informed decisions and avoid unnecessary delays in their overseas education.

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