Education plays a crucial role in our lives today, and you secure a job based on your educational qualifications. Not only a job, but proper education can open doors to unlimited opportunities in today’s fast pace world. Now, not only you but the colleges and financial institutions also realize how important it is for an individual to get educated. It is also true that education fees are crossing heights; therefore, banks have come up with education loans to help students secure education.
10 Best Banks For Education Loan In India (2021)
Presently, scholarships and loans are the only two options available to help students pursue their academic ambitions. Here in this article, we will uncover almost everything you should know about education loans in India. Education Loan Facts:
Features of Education Loans
A lot of expenses are covered by education loans, such as education fees, examination fees, hostel fees, travel expenses, books, etc. Let’s see the features of education loans in detail: No/low additional charges There are a few costs and charges that you need to be aware of, such as margin payment, pre-payment, processing charges, documentation charges, etc. Loan tenure (repayment period) The repayment period of a domestic education loan is 10 years, and for international education is 15 years. Interest Rate Subsidies Financial Institutions or Banks provide not only a government scheme but also a few other subsidies, such as special girls education, economically weaker individuals, subsidy for the disabled, etc. Education Loan and Scholarship Adjustment Some banks and financial institutions also provide the flexibility to adjust margin payment or the EMIs with scholarships for meritorious students. Various education loan banks offer specific provisions that help students in a lot of ways to cover almost all expenses related to education.
Things to keep in mind before applying for an Education Loan in India:
CIBIL Score
Prior to applying for an education loan, do check your CIBIL/Credit score because if you or your co-applicant doesn’t have a good credit score, then your education loan may get rejected by the bank.
Course and University Eligibility
Not all universities are eligible, only a few accredited professionals, UG/PG, technical courses from recognized colleges and universities (UGC/AICTE approved) are eligible. So, prior to applying for an education loan, check the university and course type.
Eligible Education Expenses
All expenses mentioned in the course’s fee structure or curriculum are not covered under the education loan. For example, your daily travel expense such as the college bus fee is not covered under the education loan, but the overseas travel expense to the college location is considered under the education loan. Also Read: Get Instant Cash Loan Online In India
What are the minimum requirements & documents required for availing an education loan?
Below are the few things that you will have to keep in mind before applying for an education loan in India from an Indian bank/financial institution:
The individual must be a citizen of India. He/she must have an offer letter or have secured admission in a recognized university (whether in India or Abroad). The student will be the prime borrower, but he/she may have a co-applicant, who can be the student’s spouse, parent, or guardian. For all the education loans ranging between 4 lakhs to 7.5 lakhs, a third-party guarantor is required. However, there are also a few banks that don’t require any collateral for loans above 10 lakhs. For students who are looking forward to studying abroad with an education loan, insurance is also compulsory for them. The course duration and type is not a constraint for banks. It can be a full-time course, diploma, part-time course. Lastly, if the applicant and the co-applicant have a good CIBIL Score, then it will be a lot easy for the applicant to secure the loan.
Documents required:
Offer letter or admission letter from a recognized Institution The applicant’s 10th/12th mark sheets and pass certificate Income documents of both the co-applicant and applicant (if available) Address proof Identity proof Document of assessment of assets and liabilities (for applicant and co-applicant)
How to choose the best bank for education loans in India?
Interest rate: The lower, the better Repayment period: The longer, the better, plus repayment should be after completion of course Collateral required: No or the minimum, the better
10 Best Banks for Education Loans in India
#1 HDFC Bank
HDFC Bank offers education loans to study in India and foreign as well, but unfortunately, they don’t have a particular education loan scheme for skill development courses. Scheme: Education Loan for Foreign Education: 9.20% to 13.64% Education Loan for Indian Education: 9.20% to 13.64% Pros:
Quick Processing/Disbursal. Low-Interest Rate.
Cons:
Hidden Charges/Processing fee. The lower loan amount for education in India.
HDFC takes around 2-4 days to process your application. Maximum Loan Amount: Rs. 10 Lakhs
#2 Vijaya Bank
Vijaya Bank offers various education loan schemes and is also known for granting education loans to students who join under the management quota. However, in the management quota scheme, the bank will only pay 85% of the fees, and the rest 15% has to be given by the student. Rate of interest for various schemes
Educational Loan for ISB: 8.75% Vocational Courses: 11.50% IBA Scheme: 10.75% to 10.90% Management Quota: 12.25% Skill Development Courses: 10.40% Education loan for Premier Central Institutions: 8.75%
Pros:
Scheme for management quota students. Low rate of interest (only for courses at premier institutions). No processing fee up to Rs. 10 Lakhs. 0.50% less interest rate concession for girls.
Cons:
Application processing is slow.
Maximum Limit: No upper limit
#3 Union Bank of India
Union Bank of India has three specific categories of education loans. Which are education loans for courses abroad, education loan for courses in India, and education loan for courses in Premier institutions (India). Please note: Students will have to take life insurance of the same amount as the education loan. Rate of interest for various schemes
IBA Scheme: 10.70% to 11.85% Education loan for ISB: 8.90% Scheme for Premier Management & Technical Institutes: 8.70% Skill Development Courses: 11.85%
Pros:
Zero processing charges. 0.50 % concessional interest rate for girls.
Cons:
Slightly higher interest rate. Slow documentation process.
Maximum Education Loan granted: Domestic: INR 20 Lakhs International: INR 30 Lakhs
#4 Axis Bank
Axis Bank offers only one education loan scheme (for a loan amount ranging from INR 50,000 to INR 75 Lakhs). The bank finances education loans only for post-graduate and graduate courses to students who have scored 50% or above marks in Graduation or HSC. Rate of Interest:
For loan amount up to INR 4 Lakhs: 15.20% For loan amount above INR 4 Lakhs to INR 7.5 Lakhs: 14.70% For loan amount above INR 7.5 lakhs: 13.70%
Please note: It is mandatory for parents to show a regular/stable source of income. Pros:
Quick Processing. Higher loan limit. No processing fee for the loan amount below Rs. 10 Lakhs.
Cons:
High-interest rate. Only one education loan scheme. Penal interest for late payments is also high.
Maximum Loan Amount: INR 75 Lakhs Also Read: 11 Best Banks For A Personal Loan In India
#5 State Bank of India
The loan scheme offered by the State Bank of India is based on the IBA model. And the SBI Scholar scheme is a scheme that is exclusively made for meritorious students who want to pursue technical or professional courses in premier institutions like IIT, IIM, NIT, etc. With the help of the SBI Global EdVantage Scheme, students can avail the amount up to INR 20 Lakhs to 1.5 crores.
Rate of interest for various schemes SBI Global Ed vantage Scheme: 10.80% SBI Skill Loan scheme: 10.05% SBI Student loan Scheme: 10.80% SBI Scholar Loan scheme: 8.75% to 10.05%
Pros:
A low-interest rate. Low processing fees. Different loan schemes.
Cons:
High processing time.
Maximum Loan Amount: INR 1.5 Crores
#6 Punjab National Bank
The Punjab National Bank offers a lot of educational loan schemes, which include PNB Saraswati, this is normal IBA model education loan scheme for meritorious students, the PNB Pratibha scheme, this scheme is for students who want to study in premier institutions and top business schools. PNB offers an exclusive scheme for pursuing higher education abroad, known as PNB Udaan. Rate of interest for various schemes
PNB Prathibha: 8.55% to 9.20% PNB Kaushal: 10.05% PNB Saraswati Scheme: 10.55% PNB Udaan: 10.40%Loan to Persons with Disabilities Women: 3.50%
Pros:
Low processing fees. Wide range of education loan schemes. Scheme to help the minor communities for overseas studies.
Cons:
Tedious paper works.
Maximum Loan Limit: No upper limit (It depends on the repayment capacity of the applicant and margin)
#7 ICICI Bank
It is one of the best banks for education loans in India which offers education loans up to INR 50 Lakhs for studies in India and up to INR 1 Crore for studies abroad. Here, the key benefit is that you are not required to provide any collateral for an education loan for Undergraduate courses up to INR 20 Lakhs and for postgraduate courses up to INR 40 Lakhs. The only drawback of taking an education loan from ICICI Bank is that the repayment holiday period that you get is of 6 months, whether you get a job or not. Rate of interest: Here the rate of interest for education loans starts at 11.5%. Pros:
High loan amount. Quick processing and less paperwork. No collateral required for the loan amount up to Rs. 20 Lakhs.
Cons
Higher rate of interest. Hidden charges. Short loan repayment holiday period.
Maximum Loan Limit: INR 1 Crore
#8 Corporation Bank
Corporation Bank offers the best education loans for vocational and skill development courses. It provides 3 education loans and has a certain set of criteria where the student must have scored 60% marks in HSC/UG. Students can avail the loan amount as low as INR 5000 to INR 1.5 Lakhs for pursuing the desired vocational courses. Rate of interest for the loan scheme:
Corp Vidya Scheme: 10.95% Corp Skill Loan: 10.45%
Pros:
Zero processing fees. 0.50% interest rate concession for girls.
Cons:
Slow processing.
Maximum Education Loan: INR 1.5 Lakhs
#9 Canara Bank
Canara Bank gives need-based finance for vocational education and training. However, the maximum amount you can avail with this loan is Rs. 1.5 Lakhs. The bank follows the IBA education loan model for other types of education loans. Therefore, the amount is restricted to INR 10 Lakhs for education in India and INR 20 Lakhs for education abroad. However, they have a Vidya Turant Scheme for meritorious students who want to pursue professional courses in premier institutions. Under this scheme, they offer a loan of maximum INR 25 Lakhs. Rate of interest for the loan scheme: Vidya Turant Scheme: 8.90% IBA based Scheme: 10.70% Vocational Education and Training: 10.20% Pros:
Vocational courses at lower interest rates. Low processing fees.
Cons:
Low loan amount. Too much paperwork.
Maximum Loan Amount for Vocational Courses: INR 1.5 Lakhs
#10 Allahabad Bank
It is one of the best banks for education loan in india which provides the highest education loan limit of INR 75 lakhs. You also get a 1% concessional interest rate if you pay the monthly interest during the holiday period or during the course study. The bank has another loan scheme called the Gyan Dipika for providing education loans to kids, starting from nursery to 12th class without any margin. Here the maximum limit is INR 1 Lakh, and the repayment period is up to 36 months. Please note that the bank will ask for collateral for the Gyan Dipika Scheme. If you secure your loan with the help of a fixed asset/ fixed deposit/ LIC/ NSC, then they offer a 1% concessional interest rate. Rate of interest for the loan scheme: Gyan Dipika Scheme: 13.00% Education loan at Top colleges: 10.00% Pros:
The Interest rate is lower. Concession rate for girl students.
Cons:
Paperwork is tedious and time taking.
Maximum Amount of Loan: Rs. 1 Lakhs We hope our list of 10 Best Banks For Education Loan In India might come in handy for you. If you think we have missed something or you have any queries then please feel free to ask them in the comment section.
