Which bank is best for Education loan?

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Which bank is best for Education loan?

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.
Major Indian banks offer education loans to help students achieve their personal and professional goals. An educational loan with a repayment duration of up to 15 years starts at 6.60 percent annual interest. The lending institution will establish which programs are qualified for an education loan. An education loan for both in India and overseas for higher education can help students achieve their education goals.

Documents required for an Educational loan:


  • KYC documents including Adhaar card, PAN card, and 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

The following are the business loan criteria that must be met:


Nationality: Indian
Non-Indian Residents (NRIs)
Overseas Citizens of India (OCI)
Persons of Indian Origin (PIOs)
Age: 18 years to 35 years for individuals,
Good Academic Record
Pursuing graduate/postgraduate degree or a PG diploma
. For salaried individuals:
Age: 28-60 years
Employment: An individual working in any MNC, private or public job earning Rs. 20,000 or above.

What are the different Types of education loans?


  • Local Education Loan: This loan is available to students who choose to obtain their education in India. Only if the student is accepted into an Indian academic organization and fulfills all loan company requirements would the loan be authorized.
  • International Education Loans: These loans enable students to pursue their dreams of studying in a university abroad. Only individuals who meet the qualifying requirements are eligible for the loan, which includes transportation, accommodation, and education costs for individuals who intend to study overseas.
  • Undergraduate and Postgraduate Loan: This type of loan can help students pursue and complete their college degree and get a decent job based on their education.
  • Loans for Career Development: Many individuals who have worked in office jobs for some years decide to take a break and enroll in specialized training and education to boost their economic opportunities. Such people would work hard to gain admission to reputable business and specialized colleges in order to improve their abilities and develop a successful career.

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 (in Rs.)

Effective Interest Rate

Interest Rate Type

7.5 Lakhs to 40 lakh

6.85% to8.15%

Floating

20 lakhs to 1.5 cr. for Abroad study*

6.85%

Floating

Collateral / Security

Not required

Processing Fee

2% of the loan amount plus  GST

Documentation Charges

(Rs. 3500 for loan amount or  Rs 6000 for loan up Rs. 10 lakh)plus GST

Eligible Entities

Private Ltd. Companies, Sole Proprietorship, Partnership firms, Trusts and Limited Liability Partnerships engaged only in Manufacturing, Trading or Services sectors

Profit Requirement

For at least 1 year

Business Tenure

Min. 3 years

Annual Turnover

Rs. 40 lakh

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 PrabashiShiksha 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

Scheme

Loan Amount

Interest Rate

Honhaar

Need Based UptoRs 10 Lakh

Repo Linked Lending Rate (RLLR + 2%)

PrabashiShiksha Loan

Need Based

RLLR + 2.15%

Kaushal

Up to 1.5 lakh

RLLR+1.50%

Udan

Up to Rs.7.50 lakhs
above Rs.7.50 lakhs
Irrespective of Amount

(With100% tangible collateral security)

RLLR + 2.00%

RLLR + 2.75%

RLLR + 2.00%

SARASWATI

Up to Rs.7.50 lakhs
above Rs.7.50 lakhs
Irrespective of Amount

(With100% tangible collateral security)

RLLR + 2.00%

RLLR+2.75%

RLLR+2.00%

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

Scheme

Loan Amount

Interest Rate

Honhaar

Need Based Upto Rs 10 Lakh

Repo Linked Lending Rate (RLLR + 2%)

Prabashi Siksha Loan

Need Based

RLLR + 2.15%

Kaushal

Up to 1.5 lakh

RLLR+1.50%

Udan

Up to Rs.7.50 lakhs
above Rs.7.50 lakhs
Irrespective of Amount

(With 100% tangible collateral security)

RLLR + 2.00%

RLLR + 2.75%

RLLR + 2.00%

SARASWATI

Up to Rs.7.50 lakhs
above Rs.7.50 lakhs
Irrespective of Amount

(With 100% tangible collateral security)

RLLR + 2.00%
RLLR+2.75%
RLLR+2.00%


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:

Scheme

Loan Amount

Interest Rate

Honhaar

Need Based Upto Rs 10 Lakh

Repo Linked Lending Rate (RLLR + 2%)

Prabashi Siksha Loan

Need Based

RLLR + 2.15%

Kaushal

Up to 1.5 lakh

RLLR+1.50%

Udan

Up to Rs.7.50 lakhs
above Rs.7.50 lakhs
Irrespective of Amount

(With 100% tangible collateral security)

RLLR + 2.00%

RLLR + 2.75%

RLLR + 2.00%

SARASWATI

Up to Rs.7.50 lakhs
above Rs.7.50 lakhs
Irrespective of Amount

(With 100% tangible collateral security)

RLLR + 2.00%
RLLR+2.75%
RLLR+2.00%


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 pay out 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.


5. Is it possible to obtain an education loan without pledging any assets as security?
Although all bank education loans demand security, which might include fixed deposits, housing, stocks, and shares, among other things. You could still get a student loan despite having to put up any collateral. The Credit Guarantee Fund for Education Loan (CGFEL) Schemes, which offer a collateral-free loan of up to Rs.7.5 lakh, can help with this. It's only for education loans disbursed through the Indian Banks' Association's Model Education Loan Scheme (IBA). To do so, you must apply for an education loan from a banking institution under this scheme. For funds up to Rs.7.5 lakh, you don't need to offer collateral, but anything above that would require it.
Which bank is best for Education loan?

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