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Top 10 Best Indian Banks for Education Loan

Best Indian Bank for Education Loan- Going through college can really be a major and tasking project. This is because most of the good colleges that offer quality education are expensive and not everyone can afford such. But with education loan, you can easily go through the college of your choice without having to worry about money. In this article, the best Indian bank for education loan has been discussed explicitly.

Best Indian Banks for Education Loan

  1. State Bank of India (SBI)
  2. Axis Bank
  3. HDFC bank
  4. Bank of Baroda
  5. ICICI Bank
  6. Punjab National Bank

#1   State Bank of India (SBI)

SBI is a multinational public bank headquartered in Mumbai, India. It was established on the 1st of July 1955. It ranks well as the largest bank in India and 43rd largest in the world. This bank has different education loans with interest rates starting from 7.25% per annum. These education loans include: Scholar loan, Global Ed-vantage Education Loan, Student Loan, Education Loan, Education Loan Take-over scheme.

Scholar loan is for students who intends to study in either a premier institute or a vocational college in India.

Global Ed-vantage and Student loans are for applicants that want to study abroad.

Education Loan Take-over scheme allows graduates to refinance their current education loan at a much lower rate.

Features of Education Loan at SBI

  • Students can use the loan obtained from the bank to study in Institutions in India or Abroad. Loans are also available for studying vocational courses and professional ones.  
  • Repayment of loan is quite flexible with a moratorium period after completion of course.
  • SBI provide education loans for jobs-oriented professional or technical courses. Some of these courses include MCA, MBA, MS, ICAN, CIMA, CPA.
  • The loan covers tuition fees, examination fees, school supplies, travel expenses, caution fees, study tours, etc.
  • No collateral security is applicable for loan amount up to 7.50 lakhs.
  • Maximum loan obtainable is Rs 30.
  • Tenure of loan is 15 years.

#2   Axis Bank

Axis bank is a public banking and financial services company based in Mumbai, India. It was first named UTI bank when established in 1993. Some of their products include credit cards, equities trading, private equity, banking commodities, etc.

Features of Education Loans at Axis Bank

  • Loan amounts are quite flexible; you can obtain a loan as low as Rs. 50000
  • Loans are processed at a fast rate and disbursed quickly too.
  • The loan covers other expenses apart from tuition e.g accommodation, travel, etc.
  • The repayment tenure is usually long.
  • Tax benefit u/s 80(E).

#3   HDFC Bank

HDFC bank is the largest private sector bank in India. As at 2021, HFDC ranks as the world’s 10th largest bank by market capitalization. It is also the 3rd largest company in terms of market capitalization in India.  Products include finance and insurance, investment banking, mortgage loans, credit cards, private equity, consumer banking, etc.

Features of Education Loan at HDFC Bank

  • Loan repayment can be up to 15 years
  • The loan covers 100% of the education cost
  • Processing fees is 1.5% of the loan amount + taxes
  • Interest rates is between 9.25% and 13.52%.
  • Collateral options include fixed deposit with HDFC Bank (moveable) and land, house, shop, etc. (all immoveable).

#4   ICICI Bank

It is a public banking and financial services company based in Vadodara, India. The multinational bank which was established in 1994 provides banking products and financial services for both retail and corporate customers. Some of these products include insurance, investment management, private equity, risk management, credit card, banking, commodities, etc.

Features of Education Loan at ICICI Bank

  • No collateral is required for loans up to Rs. 20 lakhs (for undergraduate courses) and Rs. Rs. 40 lakhs (for Postgraduate courses).
  • Loan tenure is for 8-10 years for undergraduate applicants while for post-graduate applicants, it is 10 -12 years.
  • For studies in India, loan amount is up to Rs. 50 while for overseas studies, loan amount is up to Rs 1 crore.
  • The interest rates for secured loans is from 10.50% per annum while that of unsecured loans starts from 10.75% per annum.
  • Processing fees is 1% of the loan + applicable taxes.

#5   Punjab National Bank

Punjab bank which stands as the second largest public bank was established in 1894. The bank has a loan scheme called PNB Udaan. This loan scheme gives education loans to students who have gain admission into reputable universities overseas.

Features of PNB Udaan

  • Interest rates is between 7.80% and 9.55%.
  • Collateral security is for loans above Rs.7 lakhs.
  • There is zero prepayment charges.
  • The loan covers tuition, examination fees, study tours, project, etc.
  • Applicant must be planning to study job-oriented professional /technical courses.
  • Applicants aspiring to take post-graduation courses (MCA, MBA, MS) degree/diploma courses such as aeronautics, shipping, pilot training, etc. can get access to the education loan.                                                                         

#6   Bank of Baroda

It was established in 1908 as a public financial institution. It is an India-nationalized bank based in Vadodara, India.

The bank has different categories of education loan and they include: Baroda Vidya, Baroda Gyan, Baroda Scholar, Skill Loan Scheme, Baroda Education loan for Executive development programs.

Features of Bank of Baroda Education Loan

  • The bank has good interest rate for education loan.
  • No processing fee is required.
  • Education is available for all age groups from nursery up to tertiary education.

Eligibility For An Education Loan In India

  • Applicant must be at least 18 years’ old.
  • He/She must be a citizen of India.
  • He/She must have secured admission to study career-oriented course in a recognized higher institution.
  • He/she should have good academic record.

11 Vital Documents Required by Indian Bank for Education Loan

If you are applying to Indian Bank for Education Loan, then you should get the following documents ready:

  1. Letter of Admission from a recognized institution
  2. Well-filled Loan Application form
  3. Detailed breakdown of the cost of the course
  4. Academic record of applicants (e.g transcripts)
  5. Birth certificate or any other proof of age
  6. Valid I.D card e.g PAN card, International Passport, Driver’s license, Aadhar Card
  7. Valid home address with proofs
  8. Valid signature
  9. Proof of Income (of co-applicant)
  10. Bank Statements
  11. Documents for collateral security

Do’s and Don’ts of Education Loans

Do’s of Education Loans

#1   You must have a clear future goal when applying for education loan

This is highly important when applying to institutions overseas. You should know in full details the prospects of the course, the economic prospects of that course, the potential salary and also the visa rules of that country. You should find out if you will be permitted to stay back and work after completion of your course.

#2   You should have some extra funds

You should set aside some extra funds out of your education loan. This extra fund is to take care of your basic expenses after graduation until you are able to secure a job.

Don’ts of Education Loans

#1   Be sure to apply to a recognized and accredited university

When applying for education loan, choose an institution that is well-recognized with accredited courses. If you choose an institution that is not well-recognized and such gets shutdown, you will be in big bad trouble. This is because you won’t be able to proceed with studying again, and then you will have to still service the loan until all is paid.

#2   Don’t take up extra loan for your basic expenses

Your education loan already covers that. If you take up additional loan, it will imply additional interests which can add to your total debt burden.

#3   Don’t plan to be a loan defaulter

Do not avoid repaying your loan even if you have to relocate to another country after your study. Non-repayment of loan will put a negative mark on your credit history and you won’t be able to access any loan in the future.

Pros and Cons of Education Loans

Pros

  1. Education loans gives you the opportunity to further your studies and fulfill your life ambition.
  2. With education loan, you have the opportunity to get quality education in the best of colleges.
  3. Education loans usually have lower interest rates than the private and conventional ones.
  4. Interest rates are usually fixed which prevents the terms of the loan from changing over a period of time unlike the conventional loan with interest rates that fluctuates.
  5. Students do not have to repay the loan until after graduation when they must have gotten employed.
  6. The education loan can also take care of some of your personal expenses aside tuition.
  7. After paying off your education loan, you would have built some credit scores. These credit scores can be useful in the future when you need to get an apartment for yourself, apply for jobs, etc.

Cons

  1. Some of the interest rates can be exorbitant at times.
  2. Education loan implies that you will starting out life after graduation with debt.
  3. Defaulting on your education loan will really mess up your credit score.
  4.  Education loan debt can hinder other lifestyle and financial goals.
  5.  Penalties for defaulting loan payments could imply extra interests, extra fees or wage garnishment.         

Conclusion

The Pros of getting an education loan exceeds the constraints, so you need no fear if you have to get an education loan to achieve your dreams. Don’t remain in the lower plains of life, rather soar higher to reach your goals. I wish you all the best!

Reference

  • Compareremit.com
  • Bankbazaar.com
  • Axisbank.com
  • Centralbank.net
  • Wikipedia.com

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