GREEN LOANS VS. TRADITIONAL LOANS: WHAT’S BEST FOR YOUR WALLET & THE PLANET?

• Published on Oct 13, 2025
• Read Time 8 mins
• 

Did you know that almost half of India’s electricity capacity today comes from renewable sources? All thanks to our massive scale-up in solar and wind infrastructure. But when you look at how people finance solar panels or EVs, the system hasn’t fully caught up. Most still get traditional loans with no environmental focus or added financial advantage.

That’s where green loans come in. These are financial products designed to reward climate-positive choices. Ecofy brings such green financing options that create measurable impact, both for your wallet and the planet.

What Makes a Loan “Green”?

More than a loan with a buzzword attached, a green loan is a financing method tied to environmentally positive projects. In India, this usually means electric two-wheelers and three-wheelers, rooftop solar systems, or SMEs committed to sustainable practices.

For instance, Ecofy, licensed by the RBI in 2022, is India’s first green-only NBFC. Besides options for SME green financing, its portfolio puts forth a series of EV-2W, EV-3W financing and rooftop solar loans. Overall, their retail-centric and full digital approach makes borrowing extremely accessible.

The Old and Familiar Traditional Loans

EMIs from traditional loans are what most old-school borrowers may still have on their list of expenses. Personal loans, car loans, home loans, or even generic business loans. Banks and large NBFCs offer these, and though they work, they aren’t designed with sustainability in mind. Moreover, they don’t really help the borrower save up on future costs in any real way.

• Interest rates are often higher, particularly for unsecured loans.
• Paperwork is more extensive, often requiring collateral.
• There’s no alignment with subsidies or eco-benefits.
• Most importantly, they offer no measurable environmental payoff.

Of course, traditional loans can finance almost anything. Yet, they’re rarely optimised for EV ownership or solar adoption, where costs and incentives look very different.

Green Loans vs. Traditional Loans (Side-by-Side Comparison)

The takeaway here is clear as day. Green loans let your EMI work harder for you by saving you money and shrinking your carbon footprint.

Why Green Loans Are Smart for Your Wallet?

Remember, green loans are financially pragmatic for your wallet because of these reasons:

• Fuel and Energy Savings: Considering how volatile petrol prices are, purchasing an EV lets you save 40% on running costs compared to petrol two-wheelers.
• Government Subsidies: Programs like PM E-Drive for EVs or state incentives for solar make upfront costs lighter when paired with green loans.
• Predictable Repayments: Ecofy offers green products with variable EMIs and lifecycle financing that extend beyond purchase to cover maintenance and warranties.
• Eco-conscious Identity: Surveys show Gen Z and millennials increasingly prefer financing solutions that reflect their values. Mindful spending = Long-term Savings.

Why Ecofy Fits the Bill

Since Ecofy is built solely for green purchases and installations, the whole planet is benefiting. Everything from Ecofy’s tech stack to its liability pool is designed to push sustainable finance forward.

Tie-ups with brands like Tata Power Solar, Ola Electric, Hero Vida, Piaggio, and Mahindra LMM mean borrowers can access ecosystem-wide support. Even better, you may qualify for a green loan without a credit history.

FAQs

How do green-loan interest rates compare to traditional ones?

Green loans interest rates are often more competitive, especially when paired with subsidies for EVs and solar projects.

Can I get a green loan without a credit history?

Yes. Ecofy’s offerings include options for first-time borrowers without an established CIBIL score.

What can be financed under a green loan?

EV two-wheelers, EV three-wheelers, rooftop solar installations, and SME green projects.

Are green loans available across India?

Yes. Ecofy has a presence across 26+ states and serves both urban and semi-urban markets.

Do green loans take longer to approve?

No. Ecofy offers fully digital onboarding for faster approvals compared to traditional banks.

Your Wallet, Your Planet, Your Call

Realise that the decision is about what your borrowing enables, not where you borrow from.

You can obtain financing through traditional loans. But with green loans, you get the same with long-term savings and access to economic subsidies.

Are you ready to go green?

Explore Ecofy’s Green Loan Products Today