Education in India is becoming more expensive than education abroad. While struggling for best grades and career, students and parents are also suffering from economic implications of education. Scholarships and Education Loans are the only two options which help students to pursue their academic ambitions. But finding the best bank for education loan in India is a tough job in itself. Best education loan banks offer additional features like margin fee waiver, processing fee waiver, education loan insurance, etc. Students need to know the full spectrum of education loan services to identify the best options for themselves.
- Some facts about education loans in India
- Features of Best Bank for Education Loan
- Top Banks for Education Loans in India
- FAQs (Frequently asked questions)
Some facts about education loans in India
|Education Loan for domestic education||Min: INR 20,000 Max: INR 45,00,000 (45 lakhs)|
|Education Loan for foreign education||Min: INR 1,50,000 Max: 1,50,00,000 (1.5 crore)|
|Education Loan Interest Rate (domestic)||Min: 8.35% Max: 15.8%|
|Education Loan Interest Rate (Foreign)||Min: 9.7% Max: 16.2%|
|Education Loan Tenure (Domestic/Foreign)||Min: 1 year Max: 20 years|
High Demand of Education Loans and Low Supply
The student loans enable deserving students to attain their desired educational qualification without any stress. The education loan banks cover a number of expenses incurred by students such as education fees, books, hostel fees, travel, examination fees, etc. Census shows that banks have funded more than 15 Crore (150 million) students of the nation with almost 80000 Crore (800 billion Indian rupees) worth of education loans till the financial year 2017-18. It serves as a valid question that with such high demand of education loan and such short supply of banks, what features make any bank the best one for education loan.
Features of Best Bank for Education Loan
- No/low additional charges
Like margin payment, pre-payment, processing charges, documentation charges, etc.
- Higher loan amount limit
At least INR 10,00,000 (10 lakhs) for domestic education and INR 20,00,000 (20 Lakhs) for international education.
- Higher loan tenure (repayment period)
Atleast 10 years for domestic education loan and 15 years for international education
- Interest Rate Subsidies
Not only government schemes but also Bank’s institutional subsidies like special girls education concessions, subsidy for disabled, economically weaker sections
- Scholarship adjustment with Education Loan
Availability to either adjust margin payment or EMIs with scholarships of meritorious applicants
Several education loan banks offer unique provisions which help students in various ways to cover maximum expenses of education. Students who have decided to take education loan for their academic expenses need to know about the education loan basics, relevant terms and terminologies to find the best option for themselves.
Top Banks for Education Loans in India
Here is a list of top 10 banks for education loans in India, offering education loans to deserving students to pursue their dream education in India or abroad.
5 Best education loan banks in India
State Bank of India
Benefits of SBI education loans
- Part-time courses eligible for education loans
- No minimum course duration limit
- Cost of equipment/vehicle/insurance covered in loan amount
- Maximum loan limit- Domestic loans: INR 40,00,000 (40 Lakhs) and Study abroad loans: INR 15000000 (1.5 crores)
- Interest subsidy for choosing Education Loan Insurance scheme
Named SBI Student Loan Scheme, the State Bank of India offers education loan to students to pursue their dream education. The loan is provided to students to pursue technical and professional courses offered by Indian and International institutions. SBI Education Loan can be up to a maximum of INR 30 lakhs which will be provided with collateral security (required only for loans above INR 7.5 lakhs). The repayment period varies from 10 years to 12 years depending on the loan amount. This is perhaps the best bank for education loan in terms of low interest rates.
SBI Education Loan Interest Rates
|SBI Education Loan Scheme||Interest Rate Range|
|SBI Student Loan Scheme||10.45% to 10.75%|
|SBI Scholar Loan Scheme||8.65% to 9.95%|
|SBI Skill Loan Scheme||9.95% (fixed)|
|SBI Global Ed-Vantage Scheme||10.70%|
|SBI Education Loan Interest Rate (Average ROI)||10.14%|
Benefits of Axis Bank Education Loan
- Highest domestic education loan amount: INR 7500000 (75 Lakhs)
- Special interest subsidy for girl students: 50 basis points
- No margin payment
- Axis Bank Outward Remittances: Cover in-flight expenses and pocket expenses of international Indian students
- Student Insurance with international risk cover included
In comparison to other education loan banks, Axis Bank offers education loans at competitive interest rates for students who are planning to pursue higher studies. The bank offers minimum loan amount up to INR 50,000. The interest rate for Axis Bank education loans range from 8.5 % with special rates for women applicants to 16%. This is the best bank for education loan in terms of highest loan amount availability and reasonable interest rates.
Axis Bank Education Loan Interest Rates
|Education Loan Amount limits||Axis Bank Interest Rates|
|Upto INR 400000 (4 Lakhs)||15.2%|
|Between INR 400000 (4 Lakhs) and INR 750000 (7.5 Lakhs)||14.7%|
|Above INR 750000 (7.5 lakhs)||13.7%|
Benefits of HDFC education loan
- 100% education finance available, no partial loans
- Education loan sanction before admission
- 9600 institutions and 950 courses accepted for education loans
- No hidden charges
- ‘HDFC Doorstep Service’ of education loans
- Regional education loan disbursal at ‘HDFC Asset Centers’
HDFC education loan interest rates
|Loan amount limit||HDFC interest rates|
|Education loan up to ₹400,000 (4 Lakhs)||Min: 10.25% to Max: 12.25%|
|Education loan above ₹400,000 (4 Lakhs)||Min: 10.25% to Max: 15.00%|
|HDFC education loan interest rate (average)||11.88%|
Students applying for HDFC Education Loan can get education finance services at their doorsteps for over 950 courses across 36 countries. The maximum loan amount by HDFC Bank is up to INR 20 lakhs. The processing fees for education loans is up to 1.5% of the loan amount with no fees levied for prepayment of the loan. HDFC is among the few education loan banks which have waived off the pre-payment charges completely. This is the best bank for education loan in the field of international education assistance services regarding loans and other financial services.
Punjab National Bank
Benefits of PNB education loan
- Zero processing fees for domestic education loans
- Refundable processing fees for foreign education loans
- Education loans upto INR 150000 for vocational studies
- Education loan for disabled with interest rate concessions
- State schemes for custom education loans: based on state-wise expenses for education
|Education loan limit||PNB Education Loan Interest Rate|
|Upto INR 750000 (7.5 Lakhs)||Max. 10.00%|
|Above INR 750000 (7.5 Lakhs)||Max. 11.10%|
|PNB Education Loan Interest Rate (Average ROI)||10.01%|
Punjab National Bank offers the ‘PNB Saraswati scheme’ and ‘PNB Udaan’ scheme to provide education loan to students who are planning to pursue higher studies. The bank offers the loans at basic interest rates for pursuing education at top 200 universities across the world. An upfront processing fee for PNB Education Loan of 1% has to be borne by the borrowers. The tenure options available for education loan borrowers is up to 15 years. No loan margin is required for education loan below INR 4 lakhs. This one can be considered as the best bank for education loan for loan services flexibility, students pick what they want and leave the rest.
Benefits of Canara Bank Education Loan
- No minimum education loan barrier: INR 20000 (20 Thousand) education loan available
- Counselling fees education loan for freshers
- High loan amount for domestic/foreign education loan: INR 3600000 (36 Lakhs)
- Education Loan subsidy under three different government schemes for minorities, socially backward classes (OBCs and EBCs) and economically weaker sections
- Low turn-around-time: 1 day education loan (for certain cases)
- High loan tenure: 7 years for INR 1.5 Lakhs education loan
|Education loan amount limits||Canara Bank Education Loan Interest Rates|
|Upto INR 750000 (7.5 Lakhs)||10.70%|
|Above INR 750000 (7.5 Lakhs)||10.50%|
|Minimum Canara Education Loan interest rate||8.90%|
Canara bank offers education loans to students to pursue professional and technical courses, graduate and post-graduate courses that promises job opportunities. No margin payment is required for loans upto INR 400000 (4 Lakhs). Margin of 5% for domestic and 15% for foreign education is required and in cases of students from IITs/IIMs/ISBs etc., even that is not required. The repayment tenure is 10 to 15 years depending on the loan amount. This is the best bank for education loan in terms of providing subsidies on interest and low loan barriers.
Best Bank for Education Loan List entries 6-10
The IDBI Bank offers education loan to students interested in pursuing professional and technical graduate courses, post-graduation courses, diploma, and CPA/CIMA courses. The education loan covers university fees, travel, exam fees, lab fees, library fees, book/equipment fees and other related expenses. Most banks for education loans do not cover all expenses but not IDBI Bank. There is no security requirement for loans taken below INR 4 lakhs. The bank offers maximum loan amount up to INR 20 lakhs. The repayment tenure can be up to 10 years for loans up to INR 7.5 lakhs. For loans above INR 7.5 lakhs, it can extend up to 15 years. IDBI bank is the best bank for education loan to provide maximum academic expenses of any applicant.
Bank of Baroda
Students who are applying for professional and technical courses can apply for an education loan from Bank of Baroda. The bank offers education loan to students under the ‘Baroda Scholar’ scheme. The bank offers a maximum loan up to INR 20 lakhs with a loan margin requirement of 15% for loans above INR 4.5 Lakhs. Students can repay the loans taken up to INR 7.5 lakhs within 120 months and education loans taken above INR 7.5 lakhs within 180 months. Not only high loan tenure but low loan duration can also help students to pay their education loan with least interest incurred. Bank of Baroda is the best bank for education loan in terms of cost-effective services
Another among the banks for education loans to pursue higher education is Allahabad Bank. Students pursuing professional or technical courses in recognized institutions are eligible to apply for this education loan. The quantum of the loan provided by the bank is need-based. This education loan is also subject to repaying capacity of the applicant with a ceiling of INR 20 Lakhs. This is the best bank for education loan in terms of easy interest rates and flexible repayment options (like part-payment and pre-payment).
Indian Overseas Bank
Under the Vidya Jyoti scheme, the Indian Overseas Bank offers education loan to students who want to pursue professional or technical courses. Applicants pursuing graduation and post-graduation Courses offered by reputed universities, can apply for the loan services. The bank offers a maximum loan up to INR 40 lakhs for students to study abroad, and INR 30 lakhs for students to study in India. The repayment period is maximum of 5 to 7 years. This is the best bank for education loan in India to get highest education loan amount with lowest additional expenses on education loan interest.
Some suggestions for choosing best education loan banks
Finding the best bank for education loan in India is a tiresome experience, but students who’re prepared with the best information on education loans are able to make the maximum use of such schemes. Scholarships can also be considered for financing education expenses and many education loans allow adjustment of EMIs or margin payments with scholarships.
In addition to this application of education loan is also a tedious process which students should know about. Students can either apply for customized loans for their requirements with education loans experts like Buddy4Study or they can choose to apply from bank websites. Education loans are like scholarships, the more opportunities you apply for and the more information you have; the more you’ll be able to land a perfect education loan.
FAQs (Frequently asked questions)
Q: Do I need a co-applicant for education loans in India?
A: Yes, most education loan banks require a co-applicant for education loan application in India. An exception can be made if the student is working and wishes to pursue any educational course, provided that the student is the sole repaying authority for the education loan taken. There are two kinds of loan co-applicants, Primary Co-applicants: Father, mother, siblings, spouse, and Secondary Co-applicants: direct in-laws, paternal/maternal- uncle/aunt.
Q: What is the interest rate for education loans in India?
A: Education Loan interest rates in India for Indian Academic Institutions lies between the range of 8.00% to 16.00%. Education loan interest rates for education at foreign institutions for Indian students lies between the range of 9.00% to 18.00%
Q: Where can I apply for Education Loans in India?
A: Education Loans in India can be availed with Private banks (such as ICICI, Axis Bank, HDFC Bank, Yes Bank, South Indian Bank, etc.) or Public Sector Banks (PNB, Canara, SBI, Bank of India, UCO Bank, Vijya Bank etc.) or NBFCs (Non-Banking Financial Institutions) like (Credila, Avanse, Auxilo, InCred etc.) or you could contact education loan aggregators like Buddy4Study Edu Loans. Almost all of them have online education loan application facility or you could chose to apply from government education loan portal; and finally you can visit the bank branches to apply for loans.
Q: Do education loans for abroad cover travel and hostel accommodation expenses?
A: Yes, they do. Almost all education loans for study abroad in India cover travel and accommodation expenses. These costs include housing rent, hostel fees, meals vouchers, mess charges, limited international travel costs. Some of these education loan banks do not provide the common ‘building fees, legal charges for rent agreement, membership/maintenance fees of student residential property’ which is commonly charged by foreign institutions. Students should check with their education loan provider for confirmation regarding these expenses.
Q: What are documents required for education loan application for domestic education and study abroad?
A: Not all education loan banks require the load of documents for education loans. Most avoid heavy paperwork by online application. Still students need to have following documents required for education loan ready at all times:
- Identity/KYC documents
- Financial Documents
- Academic records and admission records
- Collateral related documents.
Some education loan banks also require legal documents, loan insurance documents, third party guarantee records; but only in special cases of higher education loan amount or loan tenures.
For more information visit Buddy4Study article section and find education loan articles for every bank and key updates.