Best 11 Banks For Educational Loan in India 2021

Last Updated on 08/01/2021 by Info idea

With educational opportunities growing across the world, more and more students are aspiring to study at various reputed universities in India as well as abroad. However, funding education is a vital responsibility that has to be fulfilled by students and their parents. The best form of financing is to avail of an educational loan. Banks in India offer various best education loan in India schemes depending upon the selected institution and the course of study. Most of these schemes come with flexible repayment options and allow the borrower to plan his finances accordingly. Education loans carry a moratorium period that is very beneficial as the borrower is given a time period of six months after completing the course. An education loan also covers the cost of boarding, lodging, tuition fees, travel expenses, and other related costs for the student.

Let’s take a look at the list of 11 best banks that offers education loans to students in India.

State Bank of India (SBI)

State Bank of India offers a term loan to Indian students who aspire to study in India or abroad. The tutorial loan offered by SBI covers the tuition fees, examination fees, laboratory and library fees, cost of books and equipment, caution deposit, and other necessary expenses. SBI offers a maximum loan amount of Rs 1.5 crores lacs, with collateral security required only for loans above Rs 7.5 lacs. The loan margin requirement is 15% for students studying abroad and 5% for studying in India. Borrowers have to start repaying the loan after one year of completion of the course and tenure can be taken up to 15 years. The interest rate offered on educational loans is up to 2% on the current base rate of SBI. While applying for an education loan in SBI, one has to submit the admission letter, loan application form, details of course costs, co-applicant details, and other necessary KYC documents. Women applicants get a concession rate of 0.50% on the interest rate.

SBI Education Loan Interest Rates

Pros

• Low-interest rates
• Low processing charges
• A variety of loan schemes

Cons

• The duration of processing is high

Axis Bank

Axis Bank offers education loans at competitive rates to Indian students who aspire to study in India or abroad. The educational loan offered by Axis Bank covers hostel fees, tuition fees, book costs, etc. The minimum loan amount that can be availed from Axis Bank is Rs 50,000 and the maximum loan amount is Rs 1 crores lacs. A margin is not required for loan amounts below Rs 4 lacs but 15% has to be brought in by the borrower availing loans above Rs 4 lacs (for studying abroad) and 5% (for studying in India). Education loans are sanctioned by Axis Bank within 15 working days after the submission of all required documents. A parent or guardian is required as a co-applicant, while third parent guarantee or collateral security is required only in special cases. The interest rate for Axis Bank education loans ranges from 16.50% to up to 17.50%, and special rates are offered to women applicants. The loan will be disbursed directly to the institution where the borrower has received admission from.

Axis Bank Education Loan Interest Rates

Pros

• Loan application process is quick
• Higher loan limit
• No processing charges below Rs 10 lakhs

Cons

• High rate of interest
• No specialized education loan schemes
• High penal interest rate is charged for late payments

HDFC Bank

HDFC Banks offers an education loan with flexible repayment periods and preferential rates for reputed universities. The maximum loan amount offered by HDFC Bank is Rs 20 lacs and there is no necessity to bring in a loan margin. The loan can be availed and sanctioned from the bank even before the student has secured admission at the university to avoid last-minute hassles. Borrowers also enjoy flexible security collateral and co-applicant options from the Bank. Indian residents who are in the age gap between 16-35 years are eligible to apply for an educational loan in HDFC Bank. The co-applicant is mandatory for full-time courses and can be any family member like parents, siblings, in-laws, uncle or aunt. The processing fees charged by HDFC Bank for education loans is 1.5% of the loan amount, with no fees levied for prepayment of the loan.

HDFC Bank Education Loan Interest Rates

Pros

• Low rates of interest
• Paper works for application process is quick

Cons

• High processing charges
• Hidden charges
• Lower loan amount for studying in India

Punjab National Bank (PNB)

Punjab National Bank offers education loans for students who aspire to study at reputed universities. Students who have secured admission through merit or entrance examination are eligible to apply for an education loan in PNB. The loan covers tuition fees, travel expenses, exam fees, lab fees, book/equipment fees, library fees, and other necessary expenses. PNB sanctions as per the requirement of the borrower with a loan margin requirement of 15% on loans taken above Rs 4 lac (for studying abroad) and 5% (for studying in India). Assistantship and scholarship can also be added to the loan margin. PNB offers the base rate as the interest rate on loans taken for pursuing education at the top 200 universities across the globe while for another type of applicants, the bank charges an interest rate that is a total of a certain percentage on the base rate. The moratorium period offered by PNB is up to 1 year without any prepayment charges, and tenure can be taken up to 15 years. An upfront processing fee of 1% has to be borne by the borrower Borrowers PNB Education loan interest rates

Pros

• Low-interest rates
• Low processing charges
• Variety of education loan schemes

Cons

• Paper work for loan processing is tedious

Canara Bank

Canara Bank offers education loans for students securing admission at recognized educational institutions. Their education loan covers tuition fees, travel expenses, exam fees, lab fees, book/equipment fees, library fees, and other necessary expenses. The maximum loan amount sanctioned by Canara Bank is up to Rs 20 lacs with a loan margin requirement of 15% on loans taken above Rs 4 lacs (for studying abroad) and 5% (for studying in India). The repayment period for loans up to Rs 7.5 lacs is 10 years and 15 years for loans above Rs 7.5 lacs. Security is not required for loans below Rs 4 lacs but a third party guarantee needs to be given for loans between Rs 4 lacs and Rs 7.5 lacs. A co-borrower and 100% collateral security are required for loans above Rs 7.5 lacs.  The loan can be availed from the bank nearest to the permanent address of the parent or guardian.

Canara Bank Education Loan Interest Rates

Pros

• Low-interest rates for vocational courses
• Low processing charges
• Concessional interest rate for women applicants

Cons

• Loan amount is low
• Paper works for loan processing is tiresome.

IDBI Bank

The IDBI Bank offers education loans for students who have qualified using an entrance test or a merit-based selection process. The education loan covers the tuition fees, travel expenses, exam fees, lab fees, book/equipment fees, library fees, cost of computers, and other necessary expenses. The bank sanctions the loan according to the requirement of the borrower with no security requirement for loans taken below Rs 4 lacs. The maximum loan amount sanctioned by IDBI Bank is up to Rs 20 lacs. The repayment period can be up to 10 years for the loans up to Rs 7.5 lacs and 15 years for loans above 7.5lacs. The third-party guarantee is required for loans between Rs 4 lacs and Rs 7.5 lacs. A co-borrower and 100% collateral security are required for loans above Rs 7.5 lacs. Borrowers can make balance transfers from existing loan accounts to a new IDBI education loan amount.

IDBI Bank Education Loan Interest rates

Pros

• Variety of loan schemes are available
• Low-interest rates

Cons

• Processing fee is charged

Bank of Baroda (BOB)

Indian students can avail an education loan from Bank of Baroda after securing admission for recognized courses at recognized universities across the globe. The maximum loan amount sanctioned by BOB is up to Rs 80 lacs with a loan margin requirement of 15% (for abroad) and 5% (for India). Borrowers can get a moratorium period of one year or six months after getting employment. The customers can repay education loans taken up to Rs 7.5 lacs within 120 months and above Rs 7.5 lacs within 180 months. Security is not required for loans below Rs 4 lacs while a third-party guarantee is required for loans between Rs 4 lacs and Rs 7.5 lacs. Tangible collateral security is essential for loans above Rs 7.5 lacs. Borrowers need to pay only simple interest during the moratorium period and women applicants can get a concession of 0.50% on the rate of interest. BOB charges a penalty interest of 2% for delayed payments if the loan amount is more than Rs 4 lacs.

Bank of Baroda Education Loan Interest Rates

Pros

• Competitive interest rates
• Good range of education loan schemes
• No processing fees

Cons

• Loan application process is slow

Allahabad Bank

Allahabad Bank provides the highest education loan limit of up to Rs 75 lac depending upon the institute. Allahabad Bank offers education loans to students who have qualified using an entrance test or a merit-based selection process. The education loan covers tuition fees, travel expenses, exam fees, lab fees, book/equipment fees, library fees, cost of computers, and other necessary expenses. The Bank sanctions as per the requirement of the borrower with a loan margin requirement of 15% on loans taken above Rs 4 lac for studying abroad and 5% for studying in India. Assistantship and scholarship can also be added to the loan margin. Security is not required for loans below Rs 4 lacs while a third-party guarantee is required for loans between Rs 4 lacs and Rs 7.5 lacs. Tangible collateral security is a requisite for loans above Rs 7.5 lacs. The moratorium period allowed on the loan is ‘course duration + 1 year’ or ‘6 months after getting a job’, whichever comes earlier.

Allahabad Bank Education Loan Interest Rates

Pros

• Low interest rates
• Concession rate for women applicants

Cons

• Slow paper work and documentation

Corporation Bank

Indian students can avail of an education loan from Corporation Bank after securing admission for recognized courses at recognized universities across the globe. The maximum loan amount sanctioned by Corporation Bank is up to Rs 20 lacs with a loan margin requirement of 15% on loans taken above Rs 4 lac for studying abroad and 5% for studying in India. The education loan covers tuition fees, travel expenses, exam fees, lab fees, book/equipment fees, library fees, cost of computers, and other necessary expenses. There is no processing fee for pursuing courses in India but a processing fee of Rs 2,000 is required for studying abroad. Women applicants get a concession of 50 bps on interest rate while physically challenged students get a concession of 0.50% for all educational loans. The repayment period can be 10 years for loans up to Rs 7.5 lacs and 15 years for loans above 7.5 lacs. Only interest is charged during the moratorium period. Security is not required for loans below Rs 4 lacs but a third-party guarantee is required for loans between Rs 4 lacs and Rs 7.5 lacs. Tangible collateral security is required for loans above Rs 7.5 lacs.

Corporation Bank Education Loan Interest Rates

Pros

• No processing fee required
• 0.50% concession in the interest rates for women applicants and physically challenged students

Cons

• Slow application process

ICICI Bank

Indian students can avail an education loan from ICICI Bank after securing admission for recognized courses at recognized universities across the globe. ICICI Bank offers education loans up to Rs 1 crore lacs for studying in India and Rs 1 crore for studying in foreign countries. The interest rates for ICICI Bank education loan starts from 11.5%. There is no loan margin requirement up to Rs 20 lacs while the margin for loans above Rs 20 lacs ranges from 5-15 %.  Also, the students do not need to keep any collateral security for education loans up to Rs 20 lacs (for UG Courses) and Rs 40 lacs (for PG courses at selective premier universities). The education loan covers tuition fees, travel expenses, exam fees, lab fees, book/equipment fees, library fees, cost of computers, and other necessary expenses. The repayment period is restricted to 6 months after the completion of course, irrespective of whether the student gets a job or not.

ICICI Bank Education Loan Interest Rates

Pros

• High loan amount available
• Less paperwork and quick application processing
• No margin requirement for up to Rs 20 lakhs

Cons

• High interest rates
• Hidden charges

Vijaya Bank

Vijaya Bank offers an education loan to students who aspire to pursue higher education in India and abroad. The maximum loan amount sanctioned by Vijaya Bank is up to Rs 20 lacs with a loan margin requirement of 15% on loans taken above Rs 4 lacs for studying abroad and 5% for studying in India. The moratorium period is for all the loans except ISB which is 1 year or 6 months plus the duration of the course. For ISB students, the moratorium period is 18 months plus the duration of the course. Security isn’t required for loans below Rs 4 lacs but a third-party guarantee is required for loans between Rs 4 lacs and Rs 7.5 lacs. Tangible collateral security is requiredfor loans above Rs 7.5 lacs. The education loan covers tuition fees, travel expenses, exam fees, lab fees, book/equipment fees, library fees, and other necessary expenses. Women applicants get a concession of 0.50% on the interest rates.

Vijaya Bank Education Loan Interest Rates

Pros

• Low interest rates for pursuing courses at premier institutions
• Scheme available for management quota students
• No processing fee required up to Rs 10 lakhs
• Concessional interest rate for women applicants

Cons

• Slow application process