Education is a powerful tool that can shape a person’s future. However, it often comes at a high cost. If you are planning to pursue higher education in India or abroad, an educational loan can be of great help.
Private banks offer attractive education loan schemes with various features. The top 5 private banks for education loans are discussed below giving detailed information to enable you to make an informed decision.
Best Banks for Education Loan:
1. HDFC Bank:
HDFC Bank offers education loans for studies in India and overseas. For Indian studies, the highest limit to be borrowed is Rs 50 Lakhs while for foreign fees, there is no cap since all expenses are catered for. Nevertheless, security must be provided either as a fixed deposit or immovable property.
Rate of Interest:
- Indian Education: 9.55% to 13.25%
- Foreign Education: 9.55% to 13.25%
Pros:
- Low interest rates
- Quick processing
Cons:
- Processing fee of 1% on the loan disbursed amount
- Small loan amounts for studies in India
2. Axis Bank:
Axis Bank disburses loans from Rs 50,000 onwards. The upper limit depends on your requirement and eligibility criteria especially about graduate or postgraduate courses only needing minimum marks of at least 50% HSC or graduation results.
Rate of Interest:
- Up to Rs. 4 Lakhs: 15.20%
- Rs. 4 Lakhs to Rs. 7.5 Lakhs: 14.70%
- Above Rs. 7.5 Lakhs: 13.70%
Pros:
- Quick processing
- Higher loan amount up to 100% of education cost
- No prepayment charges
Cons:
- High-interest rates
- 24% p.a penal interest for late payments
3. Union Bank of India:
Union Bank of India provides four different loans for studies in India and abroad with other loans in case one is admitted into premier and tier II management and technical institutions. These schemes cater to diverse educational needs with flexible repayment terms and competitive interest rates thereby making higher education affordable for all sections of society.
Rate of Interest:
- Courses in India: Up to 12.55%
- Courses abroad: Up to 10.80%
- Premier Management & Technical Institutions: Up to 10.80%
- Tier II Institutions: Up to 10.80%
Pros:
- No processing charges
- Lower interest rates
- 0.50% concessional interest rate for female students.
Cons:
- Slow Processing and Documentation.
- Mandatory life insurance.
4. IDBI Bank:
IDBI Bank grants loans for AICTE, UGC, ICMR, government-approved courses, job-oriented courses as well as technical diplomas besides supporting students taking admissions on management quotas. The bank’s scope of educational expenses includes tuition fees, hostel facilities, and other related costs at reduced interest rates with repayment options that are easy on student pockets.
Rate of Interest:
- Non-vocational Courses: up to Rs.7.5 lakh–10.60%; Above Rs.7.5 lakhs– 11.30%.
- Vocational/Skill Development Courses- 11%.
- Premier Education Institutes- 9.10%.
Pros:
- The leading institutions have low interest rates
- No processing fees for studying in India
- No cost of early debt settlement
Cons:
- A collateral is required for an education loan above Rs. 7.5 Lakhs
- Lengthy loan processing period.
5. Avanse Financial Services:
Avanse, an RBI-regulated corporation, offers cost-effective educational loans for a variety of activities such as domestic and international studies, vocational courses, and even e-learning itself.
Rate of Interest:
- Upto 18%
Pros:
- The full amount guaranteed as a loan
- Simple paperwork and quick disbursal process
- E-learning course loans are also provided by this Bank
Cons:
- High-interest costs.
- The Bank charges processing Fees between 1% to 2%
- You cannot prepay in the first six months of borrowing.
Conclusion:
It is important to select the right bank for your education loan to have a smooth academic journey. Consider factors such as rate of interest, and time taken on processing the loan among other benefits while assessing what is best for you. Remember that individual banks have their advantages and disadvantages hence choose one that better suits your needs and financial background.
