A good education can make all the difference in the world, especially when you apply for a job. The importance of education cannot be doubted, which is everyone aims for the best institutes and all institutes want the best students. While the competition and quality of education have increased, so has the cost of education. Advanced education is every costly, and continues to become more expensive with every passing year. As a result, parents and guardians have increasingly been finding it difficult to manage the expenses with respect to education. The best option available to them is education loan. Education loans are designed to ensure that students have the financial means to fulfil their educational commitments and dreams.
Why is Education Loan Necessary?
Education loan has become a necessity to deal with the rising expenses of and associated with quality education. However, education loan does offer numerous benefits. Here are some of the features that make it highly beneficial to the applicant:
- It helps deal with the high cost of education
- It is available easily and helps with ancillary aspects of education such as library, equipment, and laboratory fees, etc.
- Government sponsors various schemes and subsidies on loans to avail different sections of the society.
- Female students are likely to get a lower interest rate or discount.
Education Loan Interest Rate
The interest rate of a loan is the most important aspects that the applicant should consider. The education loan interest rate differs for all banks. Additional factors that affect the interest rate of education loans include the value of collateral, credit history of the applicant, and the educational institution chosen by the applicant. So, now the next most important question is: Which is the best bank for education loan? Here’s a comparative list that you are sure to find helpful.
Best Bank For Education Loan
There are a lot factors that you need to consider apart from the education loan interest rate before applying for the loan. In addition to the base interest rate, you should also consider and compare the tenure of the loan, whether loan can be availed for foreign education, interest rate with respect to the collateral and max amount of loan that the bank can sanction.
SBI Education Loan
The biggest lender in the country offers the lowest education loan interest rate among all the banks. SBI also provides the added coverage of life insurance premium for the student or co-borrower. Noteworthy features of the education loan are:
| Base Rate | 8.50% |
| Loan Amount/ Interest Rate | Up to 7.5 Lacs 10.50% and above 7.5 Lacs 10.75% |
| Loan Term | Up to 15 years |
| Max Loan Amount | For Institutes in India – INR 10 Lacs
For Institutes outside India – INR 20 Lacs |
| Expenses Covered | Tuition, examination, laboratory and library fees, accommodation and equipments costs, laptop, travel expenses, and life insurance premium for the student/ co-borrower |
| Collateral | Up to 7.5 Lacs no collateral
Above 7.5 Lacs tangible collateral security |
Bank of India Education Loan
Bank of India is a recognized name, particularly for education loan. Not only does the bank offer an excellent rate of interest but it also accounts for a two-wheeler for the applicant. Noteworthy features of the education loan are
| Base Rate | 9.80% |
| Loan Amount/ Interest Rate | Up to 4 Lacs Nil margin and above 4 Lacs: a margin of 5% for studies in India, and a margin of 15% for studies abroad |
| Loan Term | Up to 15 years |
| Max Loan Amount | For Institutes in India – INR 10 Lacs
For Institutes outside India – INR 20 Lacs |
| Expenses Covered | Tuition, examination, laboratory and library fees, accommodation and equipments costs, travel expenses, and a two-wheeler costing up to INR 50,000 |
| Collateral | Up to 7.5 Lacs no collateral
Above 7.5 Lacs tangible collateral security |
PNB Education Loan
PNB is one of the largest public sector banks in India, and places prime importance on the needs of its customers. The bank has numerous education loan options based on gender of the applicant and the institute that they choose. Noteworthy features of the education loan are
| Base Rate | 8.45% |
| Loan Amount/ Interest Rate | Up to 7.5 Lacs base rate + 0.10% – 1.85% and above 7.5 Lacs base rate + up to 2% |
| Loan Term | Up to 15 years |
| Max Loan Amount | For Institutes in India – INR 10 Lacs
For Institutes outside India – INR 20 Lacs |
| Expenses Covered | Tuition, examination, laboratory and library fees, accommodation and equipments costs, and travel expenses |
| Collateral | Up to 7.5 Lacs no collateral
Above 7.5 Lacs tangible collateral security |
Indian Bank Education Loan
Indian Bank is not the biggest and most recognized names in public sector banks, but their education loan interest rates are excellent. Noteworthy features of the education loan are
| Base Rate | 8.60% |
| Loan Amount/ Interest Rate | Up to 7.5 Lacs 10.60% and above 7.5 Lacs 10.80% |
| Loan Term | Up to 7 years |
| Max Loan Amount | For Institutes in India – INR 15 Lacs
For Institutes outside India – INR 25Lacs |
| Expenses Covered | Tuition, examination, laboratory and library fees, accommodation and equipments costs, and travel expenses |
| Collateral | Up to 7.5 Lacs no collateral
Above 7.5 Lacs tangible collateral security |
IDBI Bank Education Loan
IDBI is one of the best private sector banks of the nation. They have numerous options for education loan depending on the institute of choice. Noteworthy features of the education loan are
| Base Rate | MCLR |
| Loan Amount/ Interest Rate | Up to 10 Lacs MCLR + 0.85% % and above 10 Lacs MCLR + 1.45% |
| Loan Term | Up to 15 years |
| Max Loan Amount | For Institutes in India – INR 10 Lacs
For Institutes outside India – INR 20 Lacs |
| Expenses Covered | Tuition, examination, laboratory and library fees, accommodation and equipments costs, and travel expenses |
| Collateral | Up to 7.5 Lacs no collateral
Above 7.5 Lacs tangible collateral security |
Education Made easy With PaySense
Banks offer an obvious advantage in terms of bigger education loans. However, if the required loan amount is not that high, then you should consider online lenders such as PaySense. The reason for doing so is that the documentation and approval process of PaySense is streamlined to ensure instant approval and disbursal; whereas, the same would consume a lot time if you were to apply to a bank. For more information on education loan check out: What is Education loan?
