ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to avail the best educational loan in India? Top 10 Education Loans in India

Updated on March 24, 2016

How to avail the best educational loan in India? Top 10 Education Loans in India

Educational loans are offered to students for pursuing their higher studies both in India as well as abroad. They are offered for both graduate and post graduate studies. Loans are offered for vocational courses as well. Loans generally cover expenses such as course fee, books, hostel fees and living expenses. Both public sector as well as private sector banks offer educational loans. Banks like SBI, Bank of Baroda, Axis bank, Central Bank of India, IDBI etc offer education loans for students. Generally, no collateral security is needed for loans up to a certain limit. In most banks, there is no collateral security for loans up to Rs 4 lakh, while third party guarantee is needed for loans up to Rs 7.50 lakh. For loans above Rs 7.50 lakh, a security equivalent to the loan is required.

Banks offer higher amount of loans for studying abroad. For example, SBI offers up to Rs 30 lakhs for studying abroad. HDFC offers loans up to Rs 20 lakh for overseas studies.

Important things to note while applying for education loan:


1. If you are studying within India, it’s better to apply for a loan at the place of study than at the place where you reside. You will have better access to funds

2. Make sure that the repayment starts only after 6 to 12 months after getting a job. This way, you can pay from your own salary without burdening your parents.


3. Banks generally prefer to provide loans for students who choose traditional courses. They also prefer to finance long term programs by reputed institutions. Banks will be cautious before sanctioning loans for courses where employment prospects are less.

4. For loans up to Rs 4 lakhs, the borrower need not put any amount. The lender will sanction the entire amount. For loans exceeding Rs 4 lakhs, the borrower may need to bring a loan margin amount of around 5% to 15%.

5. Have all necessary documents like age and address proof, attested mark sheets, income proof and documents issued by the admitting institution like prospectus, fee breakup etc. In case of abroad studies, obtain admission letter and I-20 form from the foreign institution

6. Compare education loans from various banks and shortlist the best before choosing the final one.


Interest rates: Different banks offer varying interest rates on education loans. Public sector banks offer lower interest rates than private banks. SBI offers interest rate of 11.45% while Axis bank provides loans at 16.70%. Interest rates could be floating or fixed. Most banks provide interest rate concessions for Girl students.

Interest Subsidy: Government provides a scheme called Central scheme to provide interest subsidy (CSIS) for students from economically weaker sections (EWS) to pursue technical/professional courses in India. Under this scheme, full interest subsidy is provided for the entire period of moratorium i.e, course period + 6 months or 1 year after getting job.

Additional charges: Banks don’t charge processing fee when providing educational loans. Banks may levy prepayment charges. Some banks may levy a prepayment penalty of up to 4% while some banks don’t levy prepayment charges at all. Banks may levy other charges like administration fees and documentation fees.

Interest rates for Education loans offered by Top Banks in India

State bank of India - 11.45%

IDBI Bank - 9.75% to 13.25%

Bank of Baroda - 11.40%

Bank of India - 12.20%

Axis Bank - 16.10% (Girls), 16.70% (Boys)

Indian Overseas Bank – 10.20%

Comments

    0 of 8192 characters used
    Post Comment

    • JvicIndia profile imageAUTHOR

      John 

      2 years ago from India

      'PNB SARASWATI'. Education loan scheme offered by Punjab National Bank for students pursuing Higher Education in India

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)