5 Best Banks For Education Loans: The Cheapest Education Loans In India

There are so many opportunities opening up for youngsters today across streams that weren't available even until a decade ago! However, it is often the case that students need to travel abroad for a college education, to ensure that their hard work counts in the job market. Every parent wants to support their children's dreams, but even for those in a comfortable financial situation, tuition at foreign universities can be exorbitant. 

That's where education loans can come to your rescue! Read on to understand about the various banks offering some of the cheapest education loans in India. 

What are the qualification criteria for education loans in India?

To qualify for education loans in India, there are some general criteria that must be met. While there may be small differences in every bank, this is largely what you can expect:

• You must be between the ages of 18 and 35 and must have a co-application (spouse, sibling, parent, etc.).
• Loans are available for a period of up to 7 years for all professional, graduate and post-graduate courses like management, engineering, medicine, etc.
• A loan can include miscellaneous fees like lab, library, travel, books and study tours in addition to tuition fees. 
• Repayment can be through electronic monthly instalments or post-dated checks.
• The best banks for education loans offer a moratorium period (about 6 months after the completion of the course), during which time no payments towards principal amount needs to be made. Interest payments will continue. 
• Banks do not require any security for loans of up to 4 lakhs, while third party guarantees or collateral may be required for loans of larger amounts. 

Let us take a look at some of the cheapest education loans in India offered by top loan providers:  

1. State Bank of India

Via the SBI Student Loan Schema, SBI offers some of the cheapest education loans in India. 

• Loans are available for all professional, graduate and post-graduate courses like MBA, MS, etc. at approved universities that are reputed in their home country.
• Loans can be availed up to a maximum amount of 30 lakhs with security deposits or collaterals required for loans above 7.5 lakhs.
• Repayment can be made over 10 to 12 years and can extend up to 15 years in few cases. 
• The loan margin requirement is 15%, while their interest rates are up to 2% over the base interest rate offered by SBI. 
• The entire interest payment can be made during the moratorium period, so that only principal payments are made after the loan tenure begins. 

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2. Axis Bank

• Another bank that is considered among the best banks for education loans is Axis Bank that offers advantages like: 
• Hassle free loans are available for all professional, and career-oriented courses like MBA, MS, etc. at approved universities that are reputed in their home country.
• Education loans in India can be availed from a minimum of 50,000 up to 20 lakhs and can cover everything from tuition to hostel fees. It is mandatory to have a parent or guardian as a co-applicant (collateral is optional in most cases).
• The loan margin requirement is 5% for loans above 4 lakhs, whereas loans below 4 lakhs are exempt. Their interest rates can start as low as 8.7%, with special provisions for women and girls. 
• With no processing fee, their loan approval period can be as little as 15 days.

3. HDFC Bank 

When on the topic of the cheapest education loan in India, one of India's older banks – HDFC, has always been on the forefront. Some of the benefits it offers are: 

• Loans are available for all over 950 professional courses at approved universities across 36 countries.
• Loans can be availed up to a maximum of 20 lakhs with flexible arrangements being available for security deposits, co-applicants or collaterals.
• They make funds available for individuals between the ages of 16 to 35 years. 
• One of the reasons they are considered among the best banks for education loans, is their 0% loan margin requirement. HDFC will pay up to a 100% of your required amount. 
• While they do have a 1.5% processing fee, they allow several loan applications to be pre-approved even before the admission process begins. 
• There are no penalties on pre-payment. 

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4. Punjab National Bank

Another nationalized bank considered to be one of the best banks for education loans is PNB, which offers education loans through its Udaan scheme. Here are some the advantages attached with it:

• Loans are available for premier institutions offering professional, diploma, graduate and post-graduate courses. 
• They cover everything from tuition, exam and book fees to travel and other related expenses. 
• Repayment can be made over a period of 15 years. Their interest rate is fixed at the bank's base rate. 
• The loan margin requirement is 15% for loans above 4 lakhs. Any scholarship that you have availed can be added to this loan margin. 
• The entire interest payment can be made during the moratorium period, which lasts up to a year. There are no prepayment charges. 

5. Bank of Baroda Bank

BOB offers education loans in India, under their Baroda Scholar scheme:

• Loans are available for recognized institutions in various countries offering professional and technical courses. 
• Loans can be availed up to a maximum of 20 lakhs with third party guarantees or collaterals required for loans above 4 lakhs.
• Repayment can be made over 10 years for loans of up to 7.5 lakhs and 15 years for loans above the specified amount. 
• The loan margin requirement is 15%, with women enjoying a discount in the interest rates. 
• The entire interest payment can be made during the moratorium period, so that only principal payments are made after the loan tenure begins. 

While we have listed above some of the major banks offering the cheapest education loans in India, there are still many other financial institutions that could help you in your quest. 

So, if you haven’t found what you are looking for in this article, don't despair. Continue researching online and through other support groups until you find the best bank for education loans that will fit within your parameters. 

 

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