Planning for an SBI education loan, but worried about the hidden charges? Do not worry, you are not alone. Many students and parents often consider these additional charges, processing fees, and other penalties.

The interesting part is that SBI is known for its transparency with its charges. However, understanding the fine print can eliminate extra financial pressure on students and parents.

In this blog, we will break down the extra charges that the applicant has to pay, including the processing fees and any prepayment penalties. Etc. Helping students make informed decisions about education loans.

Processing Fees on Education Loans

A processing fee is a one-time amount that banks or financial institutions charge for loans. Usually, the lender charges a small percentage of the loan amount as a processing fee. This fee covers the administrative costs, verification, approval, and disbursing of a loan. It usually includes…

  • Verification of documents

  • Credit check of the applicant and the co-applicant

  • Creating a new loan account

  • Internal administrative work

  • Charges for address verification

SBI Education Loan Processing Fee

  • Unlike private financial institutions, SBI does not charge processing fees as a percentage of the loan amount. Instead, it charges a standard processing fee of INR 10K plus GST, irrespective of the loan amount. 

  • However, for some domestic education loans, i.e, for some loans to study in India, the bank would not charge any processing fee. Also, for an abroad education loan of a certain limit, i.e, up to 20 lakhs, the bank would not charge any processing fee.

  • For the loan amount above 20 lakhs, the bank would charge the above-mentioned processing fee, which is INR 10k plus GST. This processing fee is non-refundable, which means that for any reason, if the student is not able to go forward with the education loan, the processing fee cannot be refunded.

  • Apart from the processing fee, the applicant has to bear the legal evaluation charges of the collateral if opting for collateral education loans.

SBI Education Loan Prepayment / Pre-closure Penalties

Students can repay the education loan after the moratorium period. SBI allows a grace period of the course duration plus one year, during which students are not required to repay the loan. However, the interest accrued during this grace period will be added to the principal loan amount.

Repaying the loan before the tenure is generally called loan prepayment or loan pre-closure. The good news is that, unlike other financial institutions, SBI does not charge any penalty for prepaying the loan amount. Zero pre-closure penalty feature saves lakhs of interest amount for students. 

 This makes the SBI education loans stand out and become a favourite choice for many students.

  • No prepayment charges on partial repayment

  • Zero penalty on full loan closure before the loan tenure

  • Saves lakhs of money on interest 

Eligibility Criteria to Secure an SBI Education Loan

As we previously discussed, SBI offers various Education loans to students under different schemes. The eligibility requirements may vary slightly by scheme; however, the general eligibility requirements may include:

  1. Citizenship: The applicant and co-applicant have to be Indian citizens.

  2. Admission Status: The student is required to secure admission from a recognised university or college.

  3. Co-applicant Requirement: Most of the education loans require a co-applicant. A strong co-applicant can enhance education loan approval chances.

  4. Age limit: Typically, students aged between 18 and 35 are eligible to apply for education loans

  5. Collateral Requirement: As previously discussed, SBI offers both secure and unsecured education loans. For secured loans, the student is required to pledge collateral to secure the loan amount. This reduces the risk to the lender, and these loans are available at slightly lower interest rates than unsecured education loans. 

  6. Academic Background: To get SBI education loans, a student is required to score a minimum average of 50% in all previous academics.

 The Documents Required to Get an SBI Education Loan

The documents required to secure an SBI Education loan vary based on the education loan scheme, type of education loan, students' profiles, etc. However, the basic documents list is as follows.

  1. Application Form:  A loan application form provided by the bank is to be filled out completely by the student.

  2. Identity Proof: KYC Documents confirming the identity of the applicant and the co-applicant.

    • PAN card

    • Adhaar card

    • Passport etc

  1. Admission Confirmation: A document confirming the admission of the student from a recognised university/college.

  2. Academic Records: Previous academic records of the students, such as 10th, 12th, graduate, post-graduate, etc.

  3. Co-Applicant Financial Documents: Lenders check the credit history and financial status of the applicant and the co-applicant.

  4. Collateral Documents: If the student is opting for a collateral education loan, the necessary collateral and other related documents as requested by the banks are to be submitted.

How to Apply for an SBI Education Loan

You can apply for SBI Education loans in various ways. 

  • Visit your nearest State Bank of India branch and ask about the education Loan products to the branch manager.

  • Check your eligibility and confirm that you meet the eligibility requirements mentioned by the bank.

  • Know the document checklist.

  • Arrange all the required documents and visit the branch again to apply for a student loan.

To ease the loan application process and save time, students can also apply online through WeMakeScholars.

How to Apply Through WeMakeScholars

  1. Visit the WeMakeScholars website and request a callback.
  2. Within 1-2 days, you will receive a call from our financial officer assigned to you.
  3. The financial officer, based on the details you provide, analyses your profile and suggests a loan type, documents required, etc.
  4. A secure document upload link will be shared with you to upload the necessary documents.
  5. From here onwards, your financial officer takes charge and keeps you updated with the status of the loan and ensures a smooth and hassle-free education loan process.
  6. Wherever possible, our financial officer negotiates better terms and shorter processing fees with the SBI.

Applying for Education loans through WeMakeScholars can ensure fast loan approvals. We have a team of dedicated financial officers who lend support throughout the loan process. Our financial officers will provide end-to-end support, making your education loan process stress-free.

Conclusion

SBI is one of the top public financial institutions offering education loans to students. Nonetheless, knowing the hidden charges of the education loan can help avoid unpleasant financial surprises. In this blog, we have covered the processing fee that the banks charge and the pre-closure penalties associated with the loan. A knowledge of these concepts helps students make informed choices about SBI education loans.