Are you an Indian student aiming to study your degree abroad? Studying abroad is the gateway to good job opportunities, however, funding education abroad is a major financial burden for many students. Don’t worry, we have a solution for you! Banks and financial services in India offer a number of diverse loan schemes with flexible repayment options, collateral security, processing fees, interest rates etc. Loan amount differs depending on the institution and the study course. In this blog, we will provide you with a list of the best education loan providers in India.
Best Education Loan Providers in India:
Education loan providers in India can be categorised into state banks, private banks and Non-Bank Financial Companies (NBFC).
1. State Banks
They are known for their low-interest rates; however, they have stringent requirements to meet. The most popular banks are the following:
This bank provides education loans for professional and technical graduate and post-graduate courses at reputable universities. To apply for a loan, you should submit your admission letter alongside the course costs and other Know Your Client (KYC) documents. The loan covers tuition fees, course materials, travel expenses, library fees, laboratory fees, examination fees, caution deposit and other essential expenses.
The SBI maximum loan amount is up to Rs. 30 lakh. Collateral security is only required for loans above Rs. 7.5 lakh. It can take a long time to process your loan application. If your loan is up to 20 lakh, there are no processing fees. The loan margin rate is 15%. You start repaying your education loan after one year of completing your course up to 15 years to complete the repayment. The interest rate is up to 2% of the SBI current base rate.
Punjab National Bank (PNB) is one of the best education loan providers in India. It offers loans for students who have received admission letters for graduate or postgraduate diplomas, job-oriented professional or technical courses, and CIMA, CBA, and MBA courses. The loan covers travel expenses, tuition fees, examination fees, library fees, course materials, and other expenses. Depending on the repayment capacity and loan margin, PNB has no maximum limit for the education loan; your education loan will be sanctioned according to your requirement.
There is no loan margin if the loan is less than Rs. 4 lakh. However, you are requested to pay 15% if your loan is more than Rs. 4 lakh. You can start repaying your loan after one year up to 15 years with no prepayment charges. If you are going to study at one of the top 200 universities around the world, PNB charges an interest rate which is the base rate. You should also pay a 1% processing fee, however, if you are studying in India, there are no processing fees at all.
Under the “Baroda Scholar” scheme, Bank of Baroda (BOB) offers education loans for Indian students seeking to study abroad with a maximum loan amount of Rs. 20 lakh. You are required to pay 15% as a loan margin. Once you have found employment, you will get a transition period between six months to one year before you have to start repaying your loan, this period is also called the moratorium period.
If your loan is up to Rs. 7.5 lakh, you can repay it within 10 years. However, you can repay your loan within 15 years if it is more than Rs. 7.5 lakh. No collateral security is required if your education loan is less than Rs. 4 lakh. If your loan is between Rs. 4 lakh and Rs. 7.5 lakh, the bank requests a third-party guarantee. If it is more than Rs. 7.5 lakh, you are requested to submit tangible collateral security. If payment is delayed, BOB charges 2% as a penalty interest with loans more than Rs. 4 lakh.
IDBI Bank is one of the best education loan providers in India. This bank offers loans of up to Rs. 20 lakh for education in India and up to Rs. 30 lakh for education abroad. These education loans cover tuition fees, examination fees, travel expenses, course materials, laboratory fees, library fees, and other related expenses. The loan is sanctioned if you are enrolled in one of the diplomas, CPA, CIMA, graduate, or postgraduate courses in a reputable institution.
Like BOB, IDBI Bank requires a third-party guarantee if your education loan is between Rs. 4 lakh and Rs. 7.5 lakh. If your education loan is more than Rs. 7.5 lakh, the bank requests that you provide a co-borrower and tangible collateral security. The bank will not take collateral security if your loan is less than Rs. 4 lakh. You can repay your education loan within 10 years if it is up to Rs. 7.5 lakh and 15 years if it is more.
Following the Indian Bank Association’ education loan model, Canara Bank’s loan amount is needs-based with a maximum of Rs. 40 lakh for premier institutions. However, the loan amount sanctioned by Canara Bank is up to Rs. 20 lakh in other institutions. Canara Bank’s education loan covers essential expenses like university fees, travel expenses, library fees, and book fees.
No collateral security is required for education loans less than Rs. 4 lakh. You should submit a third-party guarantee if your education loan is between Rs. 4 lakh and Rs. 7.5 lakh. Nevertheless, you should submit a co-borrower and tangible collateral security if your loan is more than Rs. 7.5 lakh. The repayment period could be up to 10 years if your education loan is up to Rs. 7.5 lakh and up to 15 years if it is more. There is a 0.5% discount in the interest rate for female students.
2. Private Banks
Similar to the SBI, Axis Bank provides education loans for career-oriented technical or professional courses for students who get a minimum of 50% in the Higher School Certificate. The loan covers accommodation costs, tuition fees, book costs and other expenses. The co-borrower should be your parent or guardian and it is mandatory that they show their regular source of income. In special cases, the bank may ask for a third-party guarantee or collateral security.
With no processing fees or repayment charges, Axis Bank grants education loans ranging from Rs. 50.000 to Rs. 20 lakh. The bank pays the loan directly to the institution you received the admission letter from. If the loan is less than Rs. 4 lakh, no loan margin is required. However, a loan margin of 15% is required if the loan is more than Rs. 4 lakh. The interest rates start from 16.50% to 17.50%.
ICICI Bank is another great education loan provider in India. It offers Rs. 50 lakh for Indian education and Rs. 1 crore for international education. There is no collateral security for education loans of up to Rs. 20 lakh if you are applying for undergraduate courses and up to Rs. 40 lakh if you are applying for post-graduate courses.
No loan margin is required if your education loan is up to Rs. 20 lakh. The ICICI Bank’s interest rate ranges between 10.25% and 12.75%. You will need to start repaying your loan after six months of completing your course.
Whether you’re planning to study abroad or in India, HDFC Bank gives you an education loan for over 950 courses in reputable universities across 36 countries. To apply for the loan, you should be an Indian citizen aged between 16 and 35 years old. The co-borrower does not need to be from the same city as you.
The maximum loan amount is limited to 20 lakh for a maximum repayment period of 15 years. It takes two to three days to process the loan application with processing fees of 1.5% of the loan amount. The bank offers low-interest rates starting from 9.25% up to 13.68% for foreign or Indian education. It also deposits the loan directly to the institution based on the fees structure.
South Indian Bank (SIB), one of the best education loan providers in India, offers a maximum loan amount of 1.5 crore. Students aged up to 50 years are eligible for SIB’s education loan. You can apply for this loan if you are applying for undergraduate courses, post-graduate courses, diplomas, skill development courses and PhD courses.
The loan covers tuition fees, accommodation costs, travel expenses, insurance, examination fees, book costs, library fees, and laboratory fees. The interest rate ranges from 10.05% to 10.80%.
3. Non-Bank Financial Companies (NBFC).
Also, Avanse Financial Services is one of the best education loan providers in India as it processes your application quickly. It offers loans for education seekers at over 1600 universities around the world. To apply for the Avanse education loan, you should submit the KYC documents, collateral security requirements, income documents, course fees, and other important documents. Avanse will determine the security collateral according to the loan amount. The loan covers tuition fees, travel expenses, living expenses, book fees, and other related expenses.
There is no maximum loan amount as it is customised according to your needs. However, the minimum loan amount for Indian education is Rs. 50,000 and for foreign education Rs. 100,000. Avanse pays the loan to the selected institution before you acquire the visa and receive the admission letter. You can start repaying your education loan six months after completing the course or three months after gaining employment within one year up to 10 years.