Categories
Education Loans Loans

Which bank is best for an education loan? | Things to Know

In this article, we will go through a complete guide of education loans, their features, the loan disbursing process, and selecting the best bank for your education loan also.

First of all, why should you seek an education loan?

India is known to have the best talent around the globe according to several certified studies.

But only due to lack of money, potential students do not get the chance to learn from the best (inside the country or by visiting abroad).

That’s a major reason why the development in India seems to be that slow.

Education loans are offered by several banks and money lenders to students to meet their education-related expenses.

This may include their coaching fees, their book expenses, expenses for studying abroad, and course charges in selected institutes in the country.

The main goal behind the initiative of starting education loan schemes is to let the potential students achieve their academic dreams, no matter where they have come from.

But with so many money lenders providing you with an education loan, it becomes quite difficult to choose which bank is best for an education loan.

We will help you out finding the right bank for you to get your education loan through this article.

Table of Content

  • What is an education loan?
  • Features of an education loan
  • What does an education loan cover?
  • Which bank is best for an education loan?
  • Education loan eligibility criteria
  • Documents required
  • How to apply for an education loan?

What is an education loan?

The government has started a new initiative wherein students can get a high loan amount to achieve their academic dreams.

Education loans come with very low interest so the students do not need to empty their pockets when it comes to the repayment of the loan.

With the help of an education loan, you can learn from the best institutes both in India and abroad.

Unlike personal loans and gold loans, you get a very extensive loan tenor up to 15 years to repay your loan amount with interest.

Education loans start from the class nurseries.

On a higher level, you can avail of education loan benefits to complete different full-time as well as part-time courses.

Also, working professionals can apply for education loans if they want to learn a specific course.

Also Read: How to get an Educational Loan in India? | Easy Steps

Features of an education loan

Education loans probably come with the most features among all kinds of loan schemes.

The major reason behind this is that these loans are for students, and somewhat for the development of the country.

We have listed the major features you get from an education loan below.

  • High loan amount up to 1 Crore
  • You get a very long loan repayment tenure up to 15 years
  • Education loans are available for studies both in the country or abroad.
  • From some lenders, you get loan disbursal in your bank account before applying for the VISA
  • Some lenders provide you door-step service to collect your documents for your loan approval
  • Bank employees’ children get a special privilege from other banks at the interest rates charged.
  • Female students can get concessional interest rates from particular banks of the country
  • For the rest of 1 year after your course completion, you do not need to pay the loan amount to the bank. This is called a moratorium period.
  • You get tax benefits up to 8 years on the interest paid.

What does an education loan cover?

With an education loan, you get a proper cover over the following.

  • Your tuition fees and coaching charges
  • Hostel fees
  • Your travel expenses passage for studying abroad
  • Insurance premium
  • Expenses of your books, equipment, uniform, and instruments
  • Examination fees, library charges, and laboratory fees
  • Expenses for buying a device such as a laptop or a computer to complete your course
  • Caution deposits and building refundable deposits supported by the institution bills or receipts.
  • Other expenses involved in the course completion

Also Read: Other Education loans

Which bank is best for an education loan?

Now the major question arises, which bank is best for an education loan! Among so many loan providers in the country, it becomes quite difficult to select the best one.

Different loan providers come with different features and services and one finds it too difficult to analyze them and find a trustworthy conclusion.

But we love to help you with this. Below, we have compared some of the most popular education loan providers in the country.

This will give us a good idea of which bank is best to provide you with an education loan.

1. Punjab national bank education loan

Punjab national bank provides you with education loan benefits with no maximum limit.

You need not deposit any kind of collateral to the bank on a loan amount up to 7.5 lakh.

With a long loan repayment tenure of up to 15 years, you also get a moratorium period of 6 months to 1 year.

PNB education loan is for students born in India or abroad from Indian parents and wants to pursue their studies in the country.

The bank asks for the security of 125% of the loan amount.

2. SBI education loan

State bank of India has initiated an education loan scheme under which students can get up to 20 lakh of loan benefits.

Also, the bank provides female students with a concession on the interest rates on the loan amount.

There is no need to deposit any kind of collateral to the bank while taking a loan amount up to 7.5 lakh.

The margin can be up to 4 lakh, starting from Nill. SBI also provides you with a moratorium period of 12 months after your course completion.

After the successful repayment of the first loan, students can also take up more education loans from the same bank for further studies.

3. Axis bank education loan

Axis bank offers you a loan amount up to 1 Crore under an education loan. Also, you will be provided with a long loan repayment tenor of 15 years.

Students can also secure loan benefits from the bank before taking admission in the selective college on the basis of their profile.

Also, Axis bank offers you one of the fastest loan disbursing services.

Once you submit your complete profile and loan application to the bank, your loan amount will be disbursed within a period of 15 days.

There is a special loan for working professionals under which they can get an unsecured loan worth up to 20 lakh.

4. HDFC bank education loan

HDFC bank is considered among the best loan providers in the country.

It offers education loan amount up to 20 lakh for studies in India and loan amount up to 30 lakh for studies abroad.

Also, there is no collateral required to avail of the loan benefits from HDFC bank. You can repay the loan amount within 15 years of loan tenor.

Also, the bank provides you with preferential interest rates when you take admission to the top-ranking colleges and universities.

With the help of the education loan offered by HDFC bank, you can complete up to 950 courses in over 36 countries in the world.

The co-borrower for your education can be from a different city where you are living.

5. Bank of Baroda education loan

With the education loan from the Bank of Baroda, you can get a loan amount of up to 80 lakh.

The bank allows you to repay the loan amount within a long time period of 15 years.

To avail of an education loan from the bank, you will need to deposit 100% tangible security in the form of collateral.

Loan benefits can be availed for students from class Nursery.

Female students are also offered a concession on interest rates.

The bank also provides you with a debit card on selective education loan schemes.

NOTE: From the above 5 banks, you can compare the services and features that suit your loan requirements. To select the best idea, you need to create a chart of your loan requirements so that you can understand what you exactly want.

Eligibility Criteria

To be eligible for the education loan to complete your further studies, you need to verify the following.

1. Nationality

You are an Indian citizen, Non-Indian resident, overseas resident of India, or a student born abroad from Indian parents with a wish to learn in India.

2. Courses

You are taking the courses that include Undergraduate programs, Postgraduate programs, Doctoral courses and PhDs, Certificate courses with a duration of 6 months or longer, technical/diploma/professional courses, or Job-oriented courses

3. Institutes

You will be eligible for an education loan from the best loan providers in the country if you are taking admission in recognized institutions and government colleges, government-aided private colleges, professional institutions, or International institutions and colleges

4. Collateral

You can get a loan amount of up to 7.5 lakh from the best loan providers in the country without depositing any collateral.

On some elective courses or institutions, you can get collateral-free loan amounts up to 40 lakh.

The banks accept residential or commercial property or plot, fixed deposits, and insurance as valid collateral for your education loan.

Documents Required

To avail of the gold loan benefits from the best loan providers in the country, you will need to submit a number of important documents to prove your eligibility.

Below, we have mentioned the important documents that most money lenders ask for while giving an education loan.

  • Age proof
  • ID proof
  • Address proof
  • Admission letter from the educational institution
  • Mark sheet of your previous examinations
  • Signature proof
  • Bank account statements of recent months
  • Salary slips
  • Complete application form with signature
  • Passport-sized photographs of recent months
  • Legal VISA (for studies abroad)

How to apply for an Education loan?

Now, at last, it comes to applying for an education loan from your selected bank.

You can apply for an education loan in two ways, Online and Offline.

We have mentioned the important steps to follow to apply for an education loan in both the ways below.

1. Online

An online way of applying for a loan is considered the easiest and most convenient way.

To apply for the loan online, you just need to visit the official website of the bank and fill the loan form, enter all the required details, submit the required documents, and then submit the form.

Once your application is approved, the loan amount will be disbursed in a short period.

2. Offline

In the offline method, you can visit the nearest branch of the bank you want to get an education loan from.

You can fill up the loan application there and submit all the required documents.

Once your loan application is approved, the loan amount will be disbursed to your bank within no time.

In the second method of applying online, you can contact the support team of the lender and provide all the necessary details. The lender will contact you regarding further requirements and your loan application can be approved.

Related Articles

Apply For Loan