Best Banks For Education Loan In India

Education Loan can be a lifesaver for highly competent students. You need to consider many factors that may, directly and indirectly, impact your education loan application status. In this article, we have tried to incorporate all the critical factors like eligibility, repayment, etc. that play a crucial role in selecting the best banks for India’s education loans. So, if you want to explore more factual and relevant information about student loans, have a look at our report!

Top 6 Best Banks For Education Loan In India

Based on market insights, we have reviewed all the best available educational loan policies in our country. After performing an in-depth analysis, our experts have prepared the best comparison. So, let’s have a look!

 1. SBI Bank Education Loan

State Bank of India deals in a wide range of education loans for all job-oriented courses. SBI Bank Education Loan interest rate starts at 10.05% per annum. You can avail of a maximum loan amount of Rs 30 lakhs. However, you have to show collaterals for a loan amount of above Rs 7.5 lakh. If you apply for an SBI bank education loan, you need not worry about any study-related expenses. Interest concession is another additional benefit offered by SBI to girl students. Moreover, in the case of the pre-payment of loans, there is no penalty charge. State bank of India also provides a moratorium period in which you can pay your education loan’s whole interest.

SBI bank Education Loan Schemes

1. Student Loan Scheme

• Maximum Loan amount: Rs 20 lakh
• Processing fee: Up till Rs.20 lakh: Rs 0; For above Rs.20 lakh: Rs.10,000 + Taxes
• Collateral: till Rs.7.5 lakh: None; For above Rs.7.5 lakh: Personal property, equipment, goods, and so on
• Loan duration: You will get a maximum of 15 years to repay your loan after your studies. Eligibility: Indian citizens

2. Scholar Loan Scheme:

This scheme is designed for meritious students. It is mainly helpful for those who want to pursue their dream of  higher studies in premier institutes in India

• Maximum Loan amount: Rs 40 lakh
• Processing Fees: Rs 0
• Collateral: If you are joining any List A and List C colleges, then collateral required
• Loan Tenure: You will get a maximum of 15 years to repay your loan after your studies + 1 year repayment holidays
• Eligibility: citizen of India selected via a specific entrance examination

3. Global Ed-Vantage Scheme (For international students)

• Maximum Loan Amount: Rs 1.5 crore
• Processing Fees: Pay Rs.10,000 for your application
• Collateral: Tangible collateral
• Loan Tenure: Maximum of 15 years
• Eligibility: Indian citizenship

4. Skill Loan Scheme

• Maximum Loan Amount: Rs 1.5 Lakh
• Collateral: None
• Loan duration: Not more than 7 years
• Eligibility: Indian citizen

The takeover of the Education Loan Scheme: To transfer your existing high-cost Education Loan to the branch of SBI bank. This will reduce your monthly EMIs.

• Processing Fees: Rs 0
• Collateral: proposed loan’s value at least 100%
• Loan duration: Not more than 15 years
• Eligibility: Can be used by any Indian nationals who have loan switchover time. They were paying regular EMIs

Interest Rate:

• Student loan Scheme: 10.80%
• Scholar Loan scheme: 8.75% to 10.05%
• Skill loan scheme: 10.05%
• Global Ed vantage Scheme: 10.80%
• The takeover of Education Loan Scheme: 10.05%

Features:

• Low-Interest rate: SBI education loan interest rates are lowest among all banks
• Good loan package for study abroad: You can avail of SBI educational loan Between Rs. 20.00 Lakhs to Rs. 1.50 Crores for foreign studies. For this, you have to apply for the SBI Global Ed Vantage scheme.
• Scholar Loan scheme: It is exclusively designed for top rankers in competitive exams. They will pursue their studies from premier institutes such as IIITs, IIM, and so on.
• Genuine Collateral requirement: In case of loan below Rs 7.5 lakhs. There is no need for collateral.
• Subsidy Schemes: Another outstanding feature of the SBI Bank Education loan is its subsidy schemes:
• Central policy for Economically Weaker Sections: You are eligible for this subsidy if your gross family income per annum is less than Rs 4.5 Lakh
• Padho Pardesh: Beneficial for overseas students who belong to a minority group.
• Dr. Ambedkar Scheme by Center: In this subsidy scheme, you can avail of the interest rate. You should belong to Economically Backward Castes (EBCs) or Other Backward Castes (OBCs).

Benefits:

1. The lower interest rate for girls: As a female scholar, you will get up to a 0.50% concession
2. Additional 1% off upon the complete duration of the loan. The only pre-requisite is that you must have paid the interest regularly.
3. No extra processing fees on student loans
4. Interest rates are on the lower side.
5. Various loan policies are at your disposal.

Frequency of repayment:

• You can opt for either Quarterly or monthly rests.
• Study loan repayment usually begins after one year of course completion. In another case, it may be six months if you got a job.

The interest disbursement process can be initiated after the first installment of the loan.

Repayment Period: For both domestic and international courses, repayment duration is 12 years

Eligibility

1. Age-Non-employed: Not more than 35 years

Employed: Not more than 45 years

1. Nationality: An Indian citizen who have secured admission in a job-oriented course
2. Employment: You should have worked as a permanent employee for at least three years.

Documentation

Student or applicant:

• Identity proof such as Aadhaar card, PAN card, voter card, and so on
• Address proof: Submit either a utility bill or a copy of the Aadhaar card
• Your all Academic records are required based on which admission is completed
• Admission proof: Documents supporting your admission should be submitted. It mainly includes an offer letter
• Loan account statement: If you have taken a loan from another bank, you have to submit a loan account statement
• Passport size photographs

For co-applicant:

• Identity proof
• Address proof
• Loan account statement
• Passport size photographs

2. HDFC Bank Education Loan:

HDFC Bank is often considered one of the best banks for education loans in India. Its flexible repayment policies and affordable interest rate make it top-ranked in student loans. Are you looking for the best education loan facilities with minimum paperwork? You are at the right place! Additionally, you will be paid for every expense related to your studies without the loan margin involvement. One of the best things about the HDFC Bank education loan is that it can be availed before the actual admission process. The Co-applicant can be any family member residing in any part of India. According to our experts, HDFC Bank offers the best education loan in India for Study abroad.

HDFC Bank Education Loan Schemes

1. For Indian students:

• Available for Indian national of age between 16-35 years
• Maximum loan limit: Not more than Rs 20 lakh
• College admission should be secured on a grade or entrance exam basis
• Nominal interest rates
• You can repay your loan within 15 years
• Processing fee: At least Rs 1000 or maybe up to 1% of the loan amount
• Other charges: No
• Minimal paperwork
• If your loan amount exceeds Rs 7.5 lakh, then you need collateral
• EMI repayment option also available
• You will get a rebate on income tax under Section 80E

2. Central Government Interest Subsidy Scheme

• Government Subsidy on Interest rate
• No interest payment during the moratorium period.
• Your annual income from all sources should be less than Rs.4.5 lakh.

3. Foreign Education

• Age requirement: 16 -35 years.
• Maximum loan amount: No upper limit
• You need to offer collateral in a few cases
• Co-applicant is mandatory during loan filing
• You can avail of preferential interest rates while applying for an overseas education loan
• Repayment tenure: max 15 years.

Before admission loan facility is available

• Minimal paperwork
• Get the loan sanctioned before admission
• Other charges: No
• EMI repayment option also available
• You will get a rebate on income tax under Section 80E

HDFC Bank Education Loan Interest rates:

• For Domestic Education: 9.55% – 13.25%
• For Foreign Education: 9.55% – 13.25%

Benefits:

1. Full finance support available for expenses related to education
2. No extra or hidden charges
3. HDFC Bank offers all its services at your door-step
4. You can avail of an education loan before your admission
5. Interest rates are affordable
6. Fastest loan sanction facilities

Features:

• Transparency: There are no extra or hidden charges in the whole processing of your application. This indicates that the organization is following 100% transparency policies
• Tax rebates: If you are applying for an HDFC bank education loan, you are automatically eligible for tax rebates
• Flexibility in Collaterals: Wide range of collaterals are acceptable such as LICs, Fixed Deposits
• Long Loan repayment duration: You will get almost 15 years to repay your loan
• Insurance cover: additional cover by HDFC Life
• Easy mode of loan disbursal: You can use either of three option: online/offline/HDFC asset center

Repayment Period:

The repayment can be made within 15 years of availing of the loan.

Documents Required

For Pre-sanction loans (Domestic students)

• Application form completed in all forms
• Your latest passport size photograph. It should be signed across
• Institutes’s admission letter with a brochure containing detailed fee break-
• Your all academic records that are required for your admission
• KYC documents: Age proof, Identity proof, and Address proof
• Signature proof
• In the case of salaried employees, recent payslips of the last two months (date of joining)
• If you are a salaried employee, then provide your last 6 months Bank statement

Additional requirement for self-employed employee

• Income Tax return for the last 2 years
• Last two years Balance Sheet/ Profit and loss statement(audited)
• last 6 month’s bank statement
• Proof of turnover
• Qualification proof

Additional documents required for Post-sanction loans (Domestic students)

• Duly signed loan agreement by the applicant and co-applicant
• In case your mode of repayment of the loan is via ACH or SI, you need to submit three security Post Dated Cheques

For Foreign Education

• Application form completed in all forms
• You and your co-applicant 2 latest passport size photograph.
• KYC documents: Age proof, Identity proof, and Address proof
• Your all academic records that are required for your admission or scholarship documents
• Last 8 months bank statement of the co-applicant
• Previous three months salary slip
• Co-applicant’s Last two years ITR
• Self-employed Co-applicant’s Office address proof (Any of these documents: Lease deed, Utility bill, and so on)
• Self-employed Co-applicant’s certified financial statements certified by a CA

3. Axis Bank Education loan

Axis Bank also comes under the elite group of “Best banks for education loan in India.” Moreover, it provides a hassle-free process of loan sanction to its customers. Are you looking for an education loan in India to study abroad? Axis bank provides the best deal in foreign education loans. The 15-day loan sanction policy of Axis bank has made it the best education loan provider in the market. You must add your parents or guardian as co-applicant in your application. Another outstanding policy of Axis bank education loan is that it directly disburse the loan to the institution. Axis bank is committed to women empowerment. Hence, it provides concession in Women education loan

Axis Bank Education Loan Interest rate:

• For a loan amount of Rs. 4 Lakhs: 15.20%
• For loan amount between Rs. 4 Lakhs to Rs. 7.5 Lakhs: 14.70%
• For a loan amount of more than Rs. 7.5 Lakhs: 13.70%

Maximum loan amount

1. For admission in Indian colleges: Upto Rs. 7.5 Lakhs
2. For admission in foreign Institutes: Upto Rs. 75 Lakhs
3. For admission at IIT’s, IIM’s and ISB’s: Upto Rs. 75 Lakhs

Benefits

1. You can avail of loans up to Rs. 75 lakhs for selective Indian institutes loan disbursal process is simple and quick. You will get your loan within 15 working days after document submission.
2. No processing fee for an education loan of less than Rs 10 lakhs

Features

•       Expenses Covered

Axis Bank education loan covers all your expenses related to your degree. It mainly includes tuition fees, accommodation charges, stationary charges, etc.

• Education Loan limit:

A domestic student can avail of an education loan of Rs 10 Lakhs. For international courses, you can avail as much as Rs 75 lakhs.

Interest Rates: Currently, the base interest rate is fixed at 9.95%.

•       Processing Fees

The zero processing fee is the most striking feature of the Axis bank education loan. However, you have to pay Rs 500+ taxes for late EMI payment.

• Security obligations

In a few cases, you have to provide collateral security or a third party guarantee. For security reasons, your branch may ask you to assign a LIC policy for them. Additionally, as a student, you need to ensure your bank about your repayment commitments.

•       Margin

For small amounts (up to Rs 4 lakh ), no margin present. For the loan amount within India above Rs 4 lakh, the margin is 5%. In the case of international courses, the margin is 15%.

Frequency of Loan repayment:

• You can opt for either Quarterly or monthly rests.
• Study loan repayment usually begins after one year of course completion. In another case, it may be six months if you got a job
• The interest disbursement process can be initiated after the first installment of the loan

Repayment Period:

• For Indian courses, the maximum repayment duration is 7 years after initiation of repayment. For international courses, the maximum repayment duration is 7 years after initiation of repayment

Eligibility:

• Age: Maximum age limit is 35 years (non-employed)

The maximum age limit is 45 years (working employees)

Nationality: Indian

The student should have secured admission in a recognized institution

• Employees who have been working for more than three years with any organization

Documentation

For Salaried applicant:

• ID Proof: Aadhaar Card, Passport, or PAN card.
• Income Proof: Latest payslips, Form 16.
• Residence proof: Utility bills, electricity bills, or house agreement.
• Salary passbook or bank statement of last three months
• Guarantor Form.
• Academic records

Other Applicants:

Self-employed applicants also have to submit all the above-mentioned documents. Additionally, you need to submit your last two-year ITR and income computation by Certified CA.

4. Canara Bank education loan

Canara Bank education loan policies are one of the best education loans in India to study abroad. You can avail of loans for any graduate or postgraduate diploma or degree from an international university.

The upper loan limit is Rs 20 lakh. The loan repayment tenure also varies according to the loan amount. For instance, you will get 10 years to repay your loan up to Rs 7.5 lakh. There is no security requirement for loan amounts below Rs. 4 lakhs. You need to avail third party guarantor for loans between Rs. 4 lakhs and Rs. 7.5 lakhs. Additionally, Canara bank offers a 0.50% interest rebate for girls.

Canara Bank Education Loan Schemes

1. IBA Model Education Loan Scheme

• Maximum Loan amount: based on the requirement
• Available for both domestic and international student
• Reduction in the interest rate for Girl students
• Additionally, you can get a 0.50% Concession on quick repayment of loan interest
• You will get a Moratorium period of 1 year
• Your parents or guardian should be your co-applicant

2. IBA Skill Loan Scheme

• Maximum Loan amount: Rs 1.5 lakh
• If you want to get skilled under training courses of National Skill Qualification Framework, you can apply for this loan
• Your education loan will fall under the Credit Guarantee Fund Scheme for Skill Development (CGFSSD)
• No third-party security needed
• Repayment tenure: 7 years

3. Vidya Turant

Maximum Loan amount: Rs 40 lakh

• Applicable for those who have secured admission in Indian premier institutes such as IIMs, IITs, IISc and ISBs
• No processing fee
• No need for collateral security or guarantee

4. Vidya Shakti

• Maximum Loan amount: Rs 7.5 lakh(Degree), Rs 1.5 lakh(vocational)
• Special loan policy for a differently-abled person. Physical disability should be more than 40%
• Repayment tenure: 15 years (depending on the course)
• No processing fees or hidden charges

5. Vidya Shakti

• Maximum Loan Amount: Rs 1 Lakh
• For those who have cleared the qualifying exam
• You have to add parent or guardian as a co-applicant loan granted jointly with the parent/guardian
• No hidden charges

Interest rate:

IBA Model:

• Up till Rs.7.5 lakh – 9.85% p.a.
• Rs.7.5 lakh and more – 9.35% p.a.
• For girl students Up till Rs.7.5 lakh – 9.35% p.a.
• Rs.7.5 lakh and more – 8.85% p.a.

IBA Skill Loan Scheme: 9.35% p.a.

Vidya Turant: 7.85% p.a.

Vidya Shakti: 7.85% p.a.

Vidya Shakti: 9.85% p.a.

Benefits and Features:

• Canara bank offers education loans for skill development courses.
• You can also avail of the loan for Vocational Training courses.
• Canara Bank education loan Schemes offer a concession on loans.

Frequency of Loan repayment:

• You can opt for either Quarterly or monthly rests.
• Study loan repayment usually begins after one year of course completion. In another case, it may be six months if you got a job.
• The interest disbursement process can be initiated after the first installment of the loan.

Repayment Period:

• For Indian courses, the maximum repayment duration is 15 years after the initiation of repayment.
• For international courses, the maximum repayment duration is 85 years after the initiation of repayment.

Eligibility:

• Age: Maximum age limit is 35 years (non-employed)

The maximum age limit is 45 years (working employees)

Nationality: Indian

The student should have secured admission in a recognized institution.

• Employees who have been working for more than three years with any organization

Documentation

For Salaried applicant:

• Duly filled application form.
• Date of birth proof
• Admission letter
•  ID Proof: Aadhaar Card, Passport, or PAN card.
•  Residence proof: Utility bills, electricity bills, or house agreement.
• Academic records
• Passport-size photograph

5. Bank of Baroda Education loan

Bank of Baroda has launched the “Baroda Scholar” scheme for Indian students studying abroad. Bank of Baroda provides up to Rs 20 lakh for education. The loan margin condition is 15%. There is no need for any security for less than Rs 4 lakh. You will also get a rebate in income tax under Section 80E

Bank of Baroda Education Loan Schemes

1. Baroda Vidya

• Provide education loan to the economically backward section for basic education
• Processing Fee and other hidden charges: Nil
• Collateral: No need
• Loan Repayment Tenure: The first installment should be paid within one year of the first disbursal of the loan

2. Baroda Gyan

• Processing Fee: Nil
• Collateral:
• Up till Rs.4 lakh: No security is needed, but the co-obligation of a parent is necessary.
• Above Rs.4 lakh: Required.
• Loan repayment Tenure: 15 years.

3. For Students of Premier Institutions

• Processing Fee: Nil
• Collateral: Depending on the category
• Loan Tenure: 15 years.

4. Baroda Scholar

• Processing fee: 1% of the total loan amount (Maximum Rs.10,000)
• Collateral: Depending on the amount of loan

Interest Rate:

• Baroda Gyan: 10.75%
• Baroda Vidya: 11.25%
• Baroda Scholar: 10.00% to 10.75%
• Premier institutes education loan: 8.75% to 10.25%
• Skill loan scheme. 10.25%

Benefits:

1. Bank of Baroda does not charge any processing fee for student loans.
2. Interest rates are competitive.
3. Good options available in education loan

Features

• Bank of Baroda has launched many schemes that provide education loans on the subsidized interest rate.
• If you cannot bear your child’s educational cost, you can opt for Baroda Vidya Scheme. Under this scheme, all education-related expenses of your child will be covered from nursery to Class 12
• Baroda Gyan Scheme’ designed for higher studies in our country Baroda Scholar Scheme for studying abroad
• Under the skill loan scheme, you can learn about Vocational Training.
• The maximum loan amount is up to Rs 80 lakh for both Indian and foreign courses.

Frequency of Loan repayment:

• You can opt for either Quarterly or monthly rests.
• Study loan repayment usually begins after one year of course completion. In another case, it may be six months if you got a job.
• The interest disbursement process can be initiated after the first installment of the loan.

Repayment Period:

• For Indian courses, the maximum repayment duration is 15 years after the initiation of repayment.
• For international courses, the maximum repayment duration is 15 years after repayment.

Eligibility:

• Age: Maximum age limit is 35 years (non-employed)

The maximum age limit is 45 years (working employees)

Nationality: Indian

The student should have secured admission in a recognized institution.

Organization: Employees who have been working for more than three years with any organization

Documentation

Depending on the loan, the documents that must be submitted will vary. The main documents that you should submit while applying for an education loan are mentioned below:

• Duly filled application form.
• Date of birth proof
• Admission letter
• ID Proof: Aadhaar Card, Passport, or PAN card.
• Residence proof: Utility bills, electricity bills, or house agreement.
• Academic records
• Passport-size photograph
• Income proof of the co-borrower or guarantor
• Collateral documents
• Bank statements

6. ICICI Bank education loan

ICICI Bank education loan ranges up to Rs. 50 Lakhs (Indian students) and Rs. 1 Crore (Foreign education). One of the main outstanding feature associated with this bank is that it does not demand collateral. No collateral required for a loan amount of Rs 20 lakhs(For Undergraduate course) and Rs 40 lakh(Postgraduate from premier institutes)

Interest rate

For domestic and international studies: Starting at 11.5%

Benefits:

1. ICICI bank offers higher loan amount as per student requirement
2. One of the main advantages of this bank. It offers quick service with the least paperwork
3. No margin requirement for up to Rs. 20 Lakhs. Loan
4. Zero processing fee and no pre-payment or pre-closure charges
5. Affordable interest rate
6. Faster loan Disbursal

ICICI bank education loan EMIs can be paid via Standing Instruction (SI) or Electronic Clearing Service (ECS). These two methods are the best mode of your EMI payment. However, you can opt for post-dated EMI cheques from a non-ICICI Bank account.

Eligibility

• Nationality: Indian
• You should have a valid offer letter from your institution or college

Documentation

• Application form completed in all forms
• Your latest passport size photograph
• Statement of cost of study
• Student/Co-borrower bank account statement (last 6 months)
• Your all academic records that are required for your admission
• KYC documents: Age proof, Identity proof, and residence proof
• Income Tax return of last 2 years of parent/guardian
• Last two years Balance Sheet/ Profit and loss statement(audited)
• last 6 month’s bank statement
• Income proof of your parents/guardian(Salary slip/form 16)

Why is there a need for Education Loan?

There is a rise in tuition fees and other education-related expenses. It has become a necessity to apply for an education loan for your higher studies. Moreover, to avoid the financial burden, you can opt for a student loan. Apart from this, educational loan policies offer tempting benefits such as income tax rebates. We have discussed the benefits of student loan in the upcoming paragraph:

• It will avoid any extra burden of your college or university fee.
• You will be able to pursue your dream of foreign studies by using various study abroad loan policies.
• Female education is always a matter of concern in India. Banks are offering an additional concession to women to promote their participation in higher studies.
• Education loan also covers your additional expenses such as book cost and accommodation charges.
• Government-sponsored subsidy on educational loans to provide financial support to the weaker section.

What kind of Tax benefits are available on Educational Loan?

There are numerous benefits that borrowers can avail of while applying for a student loan. A few of them are mentioned below:

• Your interest paid to the bank can be used as deductions from your income tax as per Section 80E of the Income Tax Act, 1961
• You can also ask for Rebates from income tax without any upper cap.
• There are very attractive Rebate offers available. Lucrative offers are available for the various job-oriented courses.
• You can claim your Rebate within eight (8) years post moratorium period.
• You are not eligible for any rebate in case of principal repayment.

FAQ