One of the simplest ways to finance education is by opting for education loan. An education loan can be taken for higher education in India as well as abroad. It’s a known fact that the cost of education is skyrocketing. If you have not saved enough money, education loans can come to your rescue.
An education loan is given to the students. In case of unemployed students, their parents or guardian needs to become a guarantor to avail this loan. Almost every bank and financial institutions offers education loan. Students and parents always get confused in making a selection of best banks for education loan. In order to help them, I am herewith a list of “10 Best Banks for Education Loan in India”.
First of all, we will take a look at the general criteria for education loan in India.
- Your age must be between 18 years to 35 years and must have a co-applicant.
- Loan period is for 7 years for all types of professional, graduate and post-graduate cost including engineering and medical. Only accredited course from recognized universities is eligible.
- The loan amount may include other fees like tuition fee, hostel fee, books etc.
- Repayment of the loan can be done via post-dated cheque or via electronic NEFT way.
- The best banks for education loans offer an additional period of 6 months after completion of course, during this period no payment toward principal amount is required.
- No security collateral required for loans up to 4 lakhs, for loans of larger amount collateral or third party guarantor required.
After taking a look at general criteria let’s take a look at best education loans in India offered by top loan providers.
# Best Banks for Education Loan in India
HDFC Bank is one of the best banks for education loan in India. HDFC Bank offers maximum 10 Lakh loan for studies in India. HDFC bank also offers education loan for foreign education. It provides quick and easy disbursal. The key features of HDFC Bank education loan offered for studies in India are given below.
Key Features of HDFC Bank Education Loan –
- Maximum Loan up to 10 Lakh.
- No security deposit up to 4 Lakh. Above 7.5 Lakh collateral is required.
- Maximum tenure up to 10 years for loan up to 7.5 Lakh.
- Doorstep service for quick and easy disbursal.
- The interest rate in the range of 9.3% to 13.89%
HDFC Bank offers a lower interest rate and offers quick processing. Few negative points about HDFC Bank education loan is a higher processing fee, hidden charges and lower loan amount for higher studies in India.
Axis Bank is next in the list of best banks for education loan in India. Axis Bank offers a maximum loan up to 75 Lakh in India or Abroad. You can also avail Central government interest subsidy for economically weaker section by applying in this bank. Key Features of Axis Bank Education Loan are given below.
Key Features of Axis Bank Education Loan –
- Maximum Loan Amount up to 75 Lakh.
- The loan will cover tuition fees, hostel charges, cost of books etc.
- No guarantor required for the loan amount up to 4 Lakh.
- The Interest rate for the loan amount up to 4 Lakh is 15.2%. For loan amount, up to 7.5 Lakh interest is 14.7%
- You can apply for a central subsidy scheme and avail benefits.
The higher loan amount for the study is one of the plus points about Axis Bank Education Loan. However, the interest rate applicable for education loan in axis bank is slightly higher.
Vijaya Bank which is recently merged to Bank of Baroda also offers education loan for studies in India and abroad. The repayment tenure here varies from 7 years to 15 years. Other key features of Vijaya Bank Education loan are given below.
- The maximum loan amount offered for study in India is 10 Lakh. For Abroad studies bank offers loan up to 20 Lakh.
- The repayment period for loan amount up to 7.5 Lakh is 10 year and for the loan amount above 7.5 Lakh repayment period is up to 15 years.
- Interest rate varies from 10.90% to 12.25%.
- No guarantor required for the loan amount up to 4 Lakh.
Vijaya Bank is a trusted public sector bank. This bank offers education loan at lucrative interest rates. Loan tenure is also long. However, the maximum loan amount offered is less compared to other banks.
# Best Banks for Education Loan in India for Abroad Studies
State Bank of India
State Bank of India is one of the best banks providing education loan for abroad studies. You can get a maximum 20 Lakh loan for higher education abroad. The education loan of SBI covers vast educational expenses including travel expense. Key Features of SBI Education Loan are given below.
Key Features of SBI Education Loan –
- Maximum Loan amount up to 20 Lakh for education abroad.
- Repayment period of the loan is up to 15 years.
- Only parents or guardian act as guarantor for loan amount up to 7.5 Lakh
- Interest rate is in the range of 10.55% to 10.80%.
- Wide range of course & expense coverage.
- SBI also offer take over education loan where the loan amount is up to 1.5 Cr.
- Processing fee in case of SBI student loan is NIL.
SBI is a trusted name and they offer student loan at a very low-interest rate. In addition to a Student loan, they also offer Scholar Loan scheme, Skill loan scheme etc.
ICICI Bank is a leading private sector bank offering education loan in India. Maximum loan offered by ICICI bank is 1 Crore. The loan will be collateral-free up to 40 Lakh for selected institutes. The Key features of ICICI Bank education loan are given below.
Key Features of ICICI Bank Education Loan
- Maximum Loan amount up to 1 Cr.
- Zero Processing fees.
- Repayment only after six months of course completion.
- No restriction on pre-payment or part payment.
- Additional expense such as travel expense, a laptop is covered.
- Pre-visa disbursal facility.
- Interest rate 11.5% per annum.
Overall ICICI bank is the best bank for providing education loan. Lower interest rate and higher loan amount is what we like about this bank.
Punjab National Bank
Punjab National Bank offers multiple education loan schemes. This includes schemes offered for education in India as well as abroad. The loan offered for higher education abroad is known as PNB Udaan. Key features of this loan are given below.
Key Features of PNB Udaan
- PNB Udaan offers a loan for the premium institute and course work abroad.
- The rate of interest for Udaan scheme is 10.4%.
- No Maximum loan limit it depends upon your repayment capacity and margin.
- Maximum repayment period is up to 15 years.
PNB offers loan at the lowest interest rate. Processing fee of PNB educational loan is lower. Wide range of education loan offer is an additional advantage of PNB loan.
# Best Banks for Education Loan in India for Small Courses
Corporation Bank also offers education loan scheme. The scheme name is known as Corp Vidya Scheme. Student can apply for this loan via Vidhya Laxmi Portal also. Key features of Corp Vidya Scheme are given below.
Key Features of Corp Vidya Scheme
- The maximum loan amount is 10 Lakh.
- Interest rate is 10.95%.
- Repayment tenure is 15 years.
- The prepayment charge is NIL.
No processing fee and concession for the girl child in the rate of interest are positive points of Corp Vidya scheme.
Canara Bank also offers a loan for small development courses. The course duration could be 2 to 3 months. The purpose could be course fee, purchase of books or any other relevant expenditure. Key features of Canara Bank education loan are given below.
Key Features of Canara Bank Loan
- Maximum Loan for the course duration above 1 Year is 1.5 Lakh.
- Finance for small duration courses also.
- No security or collateral required.
- Repayment tenure is 3 years to 7 years.
- Interest rate is 10.20%
Low interest rate and loan for the lower duration of course are positive points about this loan. Paperwork in this loan is slightly tedious. Loan amount is lower.
# Best Banks for Education Loan in India for Higher Studies School
Bank of Baroda
Bank of Baroda offers a loan for school education in India. The loan is offered for education up to 12th Standard. A loan is offered to the father/mother of the students. The maximum Loan limit is 4 Lakh. The name of the scheme is Baroda Vidhya. Key Features of Baroda Vidya are given below.
- Maximum loan amount up to 4 Lakh.
- No processing fee or documentation charges.
- No security required for the loan.
- 5% concession in rate of interest for girl students.
- Interest rate is 11.25%.
Bank of Baroda offers loan at a competitive rate without processing fees.
Allahabad Bank offers two types of education loan. For higher studies and school education in India they offer loan called as Gyan Dipika and for other they offer normal education loan. For normal education loan maximum loan amount is 75 Lakh. For Gyan Dipika maximum loan amount is 1 Lakh. Gyan Dipika is offered for education from Nursery to 12th Standard. Key features of Gyan Dipika by Allahabad Bank are given below.
- Maximum Loan up to 1 Lakh.
- No collateral required for a loan.
- The repayment schedule is 3 years.
- Rate of Interest is 13%
- Concession rate is offered for girl students.