Are you an Indian student aiming to study abroad? Pursuing higher education is a significant investment, and for many students and their families, taking out education loans becomes a crucial financial consideration. Don't worry, we have a solution for you! In India, numerous financial institutions offer a number of diverse loan schemes with flexible repayment options, collateral security, processing fees, and interest rates. 

These education loans are designed to support students in realising their academic aspirations and to help alleviate the financial burden of funding education abroad. This article aims to provide a comprehensive guide to the best education loan providers in India, considering factors such as interest rates, repayment options, loan features, customer service, and overall reputation. 

With this guide, you can make an informed decision about the best education loan in India that suits your needs and helps you achieve your educational goals.

Student Loans India

Education loan providers in India can be categorised into state banks, private banks, and Non-Bank Financial Companies (NBFCs).

• State Banks

State banks are known for their low-interest rates, however, they have stringent requirements to meet. The most popular banks are the following:

1. State Bank of India (SBI)

SBI, the largest public sector bank in India, offers attractive education loan schemes with competitive interest rates, flexible repayment options, and longer repayment periods. The bank provides education loans for professional and technical graduate and postgraduate courses at reputable universities. To apply for an SBI education loan, submit your admission letter, course costs, and other Know Your Client (KYC) documents. The loan covers tuition fees, course materials, travel expenses, library fees, laboratory fees, examination fees, a caution deposit, and other essential expenses. 

The SBI maximum loan amount is up to Rs. 30 lakh, with collateral security required only for loans above Rs. 7.5 lakh. The processing fees are waived for loans up to Rs. 20 lakh, and the loan margin rate is 15%. Repayment starts after one year of completing the course, with a repayment period of up to 15 years. The interest rate is up to 2% of the SBI's current base rate. Additionally, SBI offers special benefits like interest rate concessions for female students and those studying at premier institutions.

2. Punjab National Bank (PNB)

Punjab National Bank (PNB) is one of the renowned public sector banks in India that stands out as a top education loan provider. PNB offers loans for a wide range of academic programmes, including graduate or postgraduate diplomas, job-oriented professional or technical courses, and CIMA, CBA, and MBA courses. The loan covers various expenses such as travel, tuition fees, examination fees, library fees, and course materials. PNB has no maximum limit for the education loan, as it is sanctioned based on the applicant's repayment capacity and loan margin. There is no loan margin requirement if the loan amount is less than Rs. 4 lakh. 

However, for loans exceeding Rs. 4 lakh, a loan margin of 15% is requested. Repayment options are flexible, allowing borrowers to start repaying the loan after one year and extending it up to 15 years with no prepayment charges. If the student plans to study at one of the top 200 universities globally, PNB charges an interest rate based on the base rate. Additionally, there is a processing fee of 1%, but for studies within India, no processing fees apply. PNB's student-friendly approach, attractive interest rates, flexible repayment options, and reasonable processing fees make it a preferred choice for education loans.

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3. Bank of Baroda (BOB)

Under the “Baroda Scholar” scheme, the 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 of 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 exceeds 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 penalty interest on loans more than Rs. 4 lakh.

4. IDBI Bank

IDBI Bank is one of the best education loan in India providers. 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 diploma (CPA, CIMA), graduate, or postgraduate courses at 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 accept collateral as 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 within 15 years if it is more.

5. Canara Bank

Canara Bank, a trusted nationalised bank, is an excellent choice for education loans due to its favourable terms and conditions. The bank offers loans for a wide range of courses, both in India and abroad. Following the Indian Bank Association's education loan model, Canara Bank provides needs-based loans, with a maximum loan amount of Rs. 40 lakh for premier institutions and up to Rs. 20 lakh for other institutions. Canara Bank's education loans cover essential expenses such as university, travel, library, and book fees. 

The bank offers different requirements based on the loan amount: no collateral security is required for loans below Rs. 4 lakh; a third-party guarantee is necessary for loans between Rs. 4 lakh and Rs. 7.5 lakh; and for loans exceeding Rs. 7.5 lakh, a co-borrower and tangible collateral security are required. The repayment period can extend up to 10 years for loans up to Rs. 7.5 lakh and up to 15 years for higher amounts.

Female students can benefit from a 0.5% interest rate discount. Canara Bank's competitive interest rates, flexible repayment options, extended moratorium periods, and additional benefits make it an advantageous option for education loans, supporting students in pursuing their educational aspirations.

• Private Banks

1. Axis Bank

Axis Bank, a popular choice among students who study in India or abroad, offers education loans for career-oriented technical or professional courses, similar to SBI. To be eligible for the Axis Bank education loan, students must achieve a minimum of 50% in the Higher School Certificate. The loan covers various expenses, including accommodation costs, tuition fees, book costs, and other necessary expenses. The co-borrower, who should be a parent or guardian, must demonstrate a regular source of income. In certain cases, Axis Bank may request a third-party guarantee or collateral security. The bank provides education loans ranging from Rs. 50,000 to Rs. 20 lakh, with no processing fees or repayment charges. 

The loan amount is directly paid to the institution mentioned in the admission letter. No loan margin is required for loans below Rs. 4 lakh, but for amounts exceeding Rs. 4 lakh, a loan margin of 15% is necessary. Interest rates range from 16.50% to 17.50%. Axis Bank is known for its competitive interest rates, repayment flexibility, and convenient loan processing, making it a preferred option for students pursuing various courses, including engineering, management, medicine, and more. The bank also offers special loan schemes tailored for students studying abroad, ensuring effective financing of their education expenses.

2. ICICI Bank

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. 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.

3. HDFC Bank

HDFC Bank, through its subsidiary HDFC Credila, is a leading private education loan provider offering customised loan solutions for students planning to study abroad or in India. The bank provides loans for over 950 courses at reputable universities across 36 countries. To apply for the loan, you should be an Indian citizen between 16 and 35 years old, and the co-borrower does not need to be from the same city. The maximum loan amount is Rs. 20 lakh, with a repayment period of up to 15 years. 

The loan application is processed within two to three days, with a processing fee of 1.5% of the loan amount. HDFC Bank offers competitive interest rates, ranging from 9.25% to 13.68%, for both foreign and Indian education. Additionally, the bank directly deposits the loan to the institution based on the fee structure. HDFC Credila's simplified application process, quick loan disbursal, flexible repayment options, and competitive interest rates make it an attractive choice for students seeking financial assistance for their domestic and international studies.

4. South Indian Bank (SIB)

South Indian Bank (SIB), one of India's best education loan providers, offers a maximum loan amount of 1.5 crore. Students aged up to 50 are eligible for SIB’s education loan. You can apply for this loan if you are applying for undergraduate, post-graduate, diploma, skill development, or 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%.

• Non-Bank Financial Companies (NBFC)

1. Avanse Financial Services

Also, Avanse Financial Services is one of the best education loan providers in India because it processes your application quickly. It offers loans to 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.

2. Eduvanz

Eduvanz is a prominent education loan provider that offers innovative and student-centric loan solutions in India. With a focus on making education financing accessible and affordable, Eduvanz caters to a wide range of educational programmes, including school education, vocational courses, skill development programmes, and higher education degrees. What sets Eduvanz apart is its use of advanced technology and data-driven approaches to assess loan applications, enabling quick loan approvals and disbursals. 

The company offers competitive interest rates, flexible repayment options, and personalised loan amounts based on the borrower's needs. Eduvanz also emphasises financial inclusivity by extending loan facilities to students from all economic backgrounds, including those without traditional credit histories. 

Final Tips on Getting an Education Loan in India

Getting an education loan can be a great way to finance your education. However, it is important to remember that it is a loan, and you will have to repay it with interest. So, make sure you only borrow what you need and that you can afford the monthly repayments. Here are some tips for getting an education loan:

1. Start early: The earlier you start the application process, the more time you will have to compare different lenders and terms.

2. Do your research: Compare the different lenders and terms before you apply for a loan.

3. Be prepared to provide documentation: The lender will need proof of your income, expenses, and academic qualifications.

4. Have a co-signer: A co-signer is someone who will agree to repay the loan if you cannot.

5. Make sure you can afford the repayments: The monthly repayments will be a significant part of your budget, so make sure you can afford them.

And that’s all, folks! Choosing the best education loan provider is crucial for students and their families to ensure smooth financing of higher education. Thoroughly researching and comparing the offerings of different banks and financial institutions is essential. Factors such as interest rates, repayment terms, customer service, and additional benefits should be carefully considered before making a decision. 

It is advisable to consult with financial advisors and loan counsellors to make an informed choice that aligns with the student's specific needs and financial capabilities. Additionally, comparing the terms and conditions offered by each provider is important, including factors such as interest rates, repayment periods, processing fees, and eligibility criteria. Checking the reputation of the lender through online reviews or direct contact is also recommended before choosing an education loan for studying abroad.

Frequently Asked Questions

1. Which bank in India is best for educational loan?

The best bank for educational loans in India depends on various factors such as interest rates, repayment options, and customer service. However, some popular options include the State Bank of India (SBI), HDFC Bank, and Axis Bank.

2. Which bank is best for international student loan in India?

For international student loans in India, HDFC Credila and Axis Bank are known for providing loan options tailored to the needs of students studying abroad.

3. Which bank gives cheapest education loan in India?

When it comes to the cheapest education loan in India, banks like the State Bank of India (SBI), Punjab National Bank (PNB), and Canara Bank offer competitive interest rates and favourable terms.

4. Which is fastest education loan in India?

In terms of speed, HDFC Credila and Axis Bank are often recognised for their quick loan processing and disbursal, ensuring a faster education loan experience.