Best Bank For Education Loan in India: Top Student Loan Schemes
Higher education funding is one of the major concerns of many students who wish to study abroad. When you go online looking for ‘the best bank for education loan in India’, numerous results pop up showing various different terms related to the education loan process. There are several banks and private companies in India which offer an education loan for study abroad. However, going through the student loan schemes of each of them can be quite confusing, especially for the students who are new to the entire process of getting an education loan for study abroad.
This article lists some of the prominent schemes for secured loans from some of the banks which facilitate an education loan for abroad studies to a lot of students from India. This will make it easier for you to determine the best bank for education loan to study abroad. Let us begin with the education loan for abroad studies scheme of SBI, which is considered to be one of the best bank for education loan.
The Classification of Education Loans in India
Before you come to a concrete decision regarding which bank is the best bank for education loan, it is important to note that in India, an education loan for abroad studies is categorized as secured education loans and unsecured education loans. Secured education loans are loans borrowed on the basis of tangible collateral security. Such loans are granted by government banks in India. Unsecured education loans do not involve any collateral security. These loans are granted by private banks and NBFCs.
Secured Education Loan Schemes
Secured education loans are granted on the basis of collateral security. In order to borrow secured loans, students are required to pledge different types of assets as collateral security with the lending banks. The government bank education loan schemes will be explained first as they offer some of the lowest education loan interest rates on study abroad education loans and are considered to be one of the reliable sources of higher education funding.
SBI Education Loan Schemes
SBI is considered to be one of the best bank for education loan in India. The bank offers two different education loan schemes to study abroad. It is necessary to pledge tangible collateral security for both the education loan schemes.
The SBI Global EdVantage Loan Scheme
The Global Ed-Vantage education loan scheme is one of SBI’s premier student loan schemes. This education loan for study abroad scheme offers some of the lowest interest rate for education loan in India. The education loan terms of this SBI education loan scheme for abroad studies is applicable only to students who wish to study abroad. Students who require higher education loan amounts greater than INR 20 Lakhs to complete their education abroad may apply for this scheme. The below table will give you a better understanding of some of the salient features of the scheme.
SBI Student Loan Scheme
The SBI student education loan scheme is specifically designed for students who are in need of education loan for abroad studies, as well as in India. The maximum education loan amount offered under this scheme is INR 20 Lakhs. All the education loan terms of this education loan scheme are similar to those of the Global Ed-Vantage scheme, except the final education loan amount and loan margin. All of them have been listed in the below table.
|Education Loan Terms||SBI Global Ed-Vantage Scheme||SBI Student Loan Scheme|
|Interest Rate||9.55% (as on 20.05.2020) 0.5% concession granted to female candidates
0.5% concession granted to customers buying the Rinn Raksha Loan Insurance Scheme
|9.55% (as on 20.05.2020) 0.5% concession granted to female candidates
0.5% concession granted to customers buying the Rinn Raksha Loan Insurance Scheme
|Loan amount range||INR 20 Lakhs to INR 1.5 Cr.||Upto INR 20 Lakhs|
|Total Loan Tenure||Up to 15 years||Up to 15 years|
|Total Expenses covered by the education loan||Tuition Fees, Living expenses, Study aid expenses, travel expenses, library fees,etc.||Tuition Fees, Living expenses, Study aid expenses, travel expenses, library fees,etc|
|Repayment method||Average moratorium period comprises of the duration of the course + 6 months (can be extended to a year)||Average moratorium period comprises of the duration of the course + 6 months (can be extended to a year)|
|Processing Fees||Rs. 10,000 + Legal & Valuation Fees||Rs. 10,000 + Legal & Valuation Fees|
|Eligible Expenses||All expenses related to the course abroad||All expenses related to the course abroad|
The education loan terms mentioned in the above table can be quite confusing at times. In order to determine the best bank for education loan which caters to your financial needs, do get in touch with the financial team of WeMakeScholars.
The Bank of Baroda Education Loan for Study Abroad: Baroda Scholar Scheme
The Bank of Baroda is one of the few government banks, whose education loan terms can be compared to those offered by SBI. The Baroda Scholar loan scheme is Bank of Baroda’s study abroad education loan scheme. The bank has bifurcated universities across the world into prime institutes and non-prime institutes, based on their global ranking. The education loan terms of the Baroda Scholar scheme applicable to each of the Bank of Baroda university lists are different. The following table lists some of the important education loan terms related to the Baroda scholar scheme. If you are wondering which bank has lowest interest rate on education loan, then the education loan schemes of the Bank of Baroda may be your answer to the question.
|Education Loan Terms||For universities in the premier list||For universities in the non-premier list|
|Interest Rate (Current Values)||7.6% (Female Candidates)8.1% (Male Candidates)||8.35%(Female Candidates)8.85% (Male Candidates)|
|Available Loan Amount||Rs.8 Lakhs – Rs.80 Lakhs||Rs.8 Lakhs – Rs.60 Lakhs|
|Total Loan Tenure||15 Years||15 Years|
|Moratorium Period||Course Duration + 6 Months||Course duration + 6 Months|
|Processing Time||15 Days if processed through our team||15 Days if processed through our team|
|Expenses Coverage||Tuition + All expenses related to the candidate’s course.||Tuition + All Expenses related to the candidate’s course|
|Repayment Begins||12 months post course duration||12 months post course duration|
The processing fees charged by Bank of Baroda is entirely dependent on the education loan policies of the said bank. So far, the lowest education loan interest rate in India is charged by the Bank of Baroda. In case of any confusion regarding the application and education loan process, readers may reach out to the financial team of WeMakeScholars. Our financial team will be able to help by providing the necessary help and guidance to students in selecting the best bank for education loan.The next prominent government bank education loan scheme is that of the Punjab National Bank.
The Punjab National Bank: PNB Udaan Scheme
The Punjab national bank offers education loan for abroad studies under the PNB Udaan scheme. The details of this scheme of education loan for study abroad are provided in the following table. This PNB education loan for abroad studies again requires students to pledge collateral security. As is the case with the education loan interest rates of the rest of the government banks, female candidates are eligible for an automatic reduction in their education loan interest rates.
|Education loan terms||PNB Udaan Education Loan Scheme|
|Interest rate||9.80% (male candidates) 9.30% (female candidates)|
|Loan amount range||
|Total Loan Tenure||15 years|
|Total Expenses Covered||All expenses related to the course abroad|
|Processing Fees||For loan amounts of upto Rs.4 Lakhs: Nil. For loan amounts above Rs.4 Lakhs: 0.9% to 1% of the total loan amount.
Documentation charges: Rs.450
Legal and valuation charges: Rs.250 + GST(applicable as prescribed by banks)
|Moratorium Period||Course period + 1 year|
Canara Bank Education Loan: IBA Model Loan Product For Higher Studies in India and Abroad
The Canara Bank offers abroad education loans under the IBA’s model loan product for higher studies in India and Abroad scheme. Students who wish to pursue their undergraduate, as well as postgraduate courses abroad are eligible to apply for an education loan for abroad studies under this Canara Bank education loan scheme. Also, students who have been enrolled in PG Diploma Courses in India, as well as abroad are eligible to apply for higher education funding under the Canara Bank abroad education loan scheme. All further details of the scheme are listed in the table below.
|IBA Model Loan Product For Higher Studies in India and Abroad||Canara Bank Abroad Education Loan Scheme|
|Canara bank education loan ROI||Up to INR 7.5 Lakhs : 10.40%INR 7.5 Lakhs & above: 9.90%|
|Maximum Loan Amount||Need-based financing For studies in India: Rs.10 Lakhs
For abroad studies: Rs. 20 Lakhs
|Eligible Courses||Undergraduate (Bachelors), Postgraduate(Masters), PhD, PG-Diploma Courses, etc.|
|Student Eligibility||Student must be an Indian National|
|Loan Tenure||15 years|
|Moratorium period duration||Course period, plus one year.|
|Loan Margin||For loan of upto Rs.4 Lakhs: Nil
For loan amounts above Rs. 4 Lakhs –Study in India: 5%
Abroad Studies : 15%
|Security||Assignment of future income of the studentLoan is granted jointly with the parent/Guardians of the student.
Loan amount up to Rs.7.50 Lakhs :
No collateral Security, loan will be covered under Credit Guarantee Fund Scheme for Education loans(CGFSEL) scheme subject to the conditions
Loan amount above Rs. 7.50 Lakhs:
Tangible Collateral security to cover at least 100% of the loan amount
How To Determine The Best Bank For Education Loan?
Borrowers who are on the lookout for the best bank for education loan need to understand that one bank cannot be declared so. The banks providing the best education loans for students are those which cater to their every financial need of studying abroad. It is very important to look for certain parameters which form the framework of a perfect education loan. These parameters are; lower interest rates, lesser processing fees, higher education loan amount cap, better expense coverage and last, but not the least, student-friendly education loan repayment options.
When students think of which bank has the lowest education loan interest rate, government banks are the first thing that comes to mind. Government bank education loan schemes cover most, if not all of the points mentioned above. This is why the title of ‘Best banks for education loans in India’, goes to them. Episode 11 of the Loanflix web-series compares the education loan terms of NBFCs and private banks and government banks in terms of the above mentioned points. This will help you clear most of the doubts regarding the best banks for education loans.
It is natural for anyone to be confused about choosing the right lender when so many options are available in the market. The financial team of WeMakeScholars is well-equipped to help students determine which bank has lowest interest rate on education loan, along with other important factors, thus helping them in deciding the best bank for education loans. So, the best way to begin your education loan process would be to get in touch with their team at the earliest.
This point marks the conclusion of this article. The next article will elaborate on the abroad education loan schemes for unsecured loans in India. It will help you determine the best bank for education loan without collateral in India. Till then, keep reading our other articles on various aspects of the education loan process.
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