Which bank is best for Education loan?

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December 13, 2021
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education loan

Which bank is best for Education loan?

What is an Education loan?


Education loans are intended to finance the educational needs of the students. Leading banks in India offer educational loans to help achieve academic dreams of the student group. These loans are offered mainly for higher education in India as well as abroad. However you can also apply for an education loan starting from Nursery.

Documents required for an Educational loan:


  • KYC documents including Adhaar card, PAN card, voter ID.
  • A six-month bank statement or passbook.
  • Beneficiary Agreement (optional).
  • A photocopy of the Institution's acceptance letter, as well as the cost structure.
  • S.S.C., H.S.C., and University degree result sheets / graduation credentials

Best Banks in India who provide Education loan:


Here we have listed out the biggest banks and their charges along with other details:

1. State Bank of India:


The largest joint stock bank in India grants educational loans for various courses which includes technical, professional, Post-graduation and degree courses like MCA, MBA, from reputed colleges and universities in India. Under the Scholar loan scheme the bank grants loans for students on the basis of merit to study in the premier institutes like IITs IIMs and NITs. It also offers loans up to Rs 1.5 cr. for study abroad under the SBI Global Ed-vantage Scheme.

Loan Amount

Category

Interest Rate*

Salaried Individuals

6.50% onwards

Self-Employed Individuals

6.60% onwards

*Processing Fee of Rs. 10,000

2. Punjab National Bank:


The second largest bank in the public sector offers more than 8 schemes to aid academic and skill development courses in India. It also provides financial assistance for studying technical and professional courses in India as well as abroad. Few notable schemes offered by the bank include PNB Prabashi Shiksha loan, PNB Saraswati, PNB Pratibha, PNB Udaan, etc. Few schemes do not specify the upper and lower limit of borrowing as these schemes will offer as per need and repayment capacity of the borrower, whereas schemes that specify the limit provides aid up to maximum of Rs. 10 lakh.

Category

Best Rate

Highest Rate

Salaried Individuals

6.7%

7.40%

Self-Employed Individuals

6.70%

7.85%


3. Axis Bank:


The bank offers one scheme as Education Loan which has many sub-variants for domestic study as well as for study abroad. Most of the loan offers are unsecured loans, which mean you don’t have to give any collateral as security and have a repayment period of up to 10 or 15 years. These sub variants are as follows

Category

Best Rate

Highest Rate

Salaried Individuals

6.70%

7.40%

Self-Employed Individuals

6.80%

7.55%


4. HDFC Bank:


This bank also offers education loans to study in India and abroad. It provides a loan for a maximum amount of Rs. 20 lakh for education in India whereas, there is no specified limit of maximum loan amount for study abroad. Such loans are provided for a maximum period of 15 years and the amount of loan is disbursed directly to the institution. Rate of interest applicable for available schemes are as follows:

Category

Best Rate

Highest Rate

Salaried Individuals

6.55%

7.40%

Self-Employed Individuals

6.60%

7.40%


5. ICICI Bank:


ICICI Bank offers educational loans up to Rs 50 lakhs for studying domestic courses and up to Rs 1 Crore for International courses. Both secure and unsecured loans are available for various UG and PG courses. The interest rate for educational loans ranges from 8.75% to 12.25%. You need not have to provide any collateral for educational loans from ICICI bank up to Rs 20 Lakh for UG Courses and Rs 40 Lakh for PG courses at selective premier institutes.

FAQs


1.What are the necessary documents for the first disbursement?
For the initial distribution, you'll need the following documents.
  • A document from a college or university requesting payment
  • Loan contract signed by candidate, co-applicants
  • Letter of approval signed by the applicant and co-applicants
  • Application for payout signed by applicant and co-applicants
  • Invoices for margin payment made to the college/university, as well as a bank statement confirming the transfer
  • Secondary collateral documentation (if applicable)
  • In the event of an abroad institute, Form A2 must be acknowledged by the candidate or co-applicants.


2. Would there be a fee or a security deposit?
For student loan payments of up to 20 lakhs (varying depending on the bank), there is no additional charge or processing fee. A processing fee of 10,000 plus GST is applied to loans over 20 lakhs. There is also no added charge or processing fee for Scholar loans, regardless of the loan size. Legal, appraisal, and mortgage fees will be assessed in the case of property submitted as security.

3. Is it necessary to have a co-applicant for student loans?
Yes, a co-applicant is necessary for all full-time programmes. A parent, sponsor, or spouse is often a co-applicant (if-married).

4. What funds are managed by student loans?
Education loans would be used to cover the following expenses:
  • Expenditure for tuition and lodging
  • Fees for exams, libraries, and labs, if applicable
  • Any refundable security payments that have been paid to the academic facility
  • The expense of textbooks, uniforms, and other materials required to complete the course.
  • Payments for transportation (for air travel, the return fee.

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