There are numerous opportunities opening up for students these days across different streams that weren’t available even until a decade ago. Notwithstanding, it is usually the case that students choose to travel abroad for their higher education, to make sure that their hard work counts in the job market. Every parent desires to support what their children want to do in the future and their dreams. At times, even for those in a convenient financial situation, tuition fees at foreign universities can be exorbitant.
That’s the time when some cheapest education loan come to your rescue!
Read on to find out about the different banks providing some of the cheapest education loan in India.
To be eligible for education loans in India, several general criteria must be met. Though there may be minute variations depending on the bank, to a great extent, this is what you can expect:
- You should be between the age of 18 to 35 and must have a co-applicant which can be a spouse, sibling, parent, etc.
- Education loans are available for a span of up to 7 years for all professional, post-graduate, and graduate programs like engineering, management, medicine, and many more.
- A loan can incorporate miscellaneous fees like that of the library, lab, traveling, books, study tours, etc in addition to the tuition fees.
- Repayment can be done with the help of electronic monthly installments commonly known as EMIs or post-dated checks.
- The banks which are considered to be the best for providing education loans offer a moratorium period of about 6 months after the course is completed. During that period no payments towards the principal amount are supposed to be made. Though, the Interest payments will continue.
- Banks do not need any security for education loans of up to 4 lakhs. Though, third party guarantees or collateral are needed if you are opting for loans of larger amounts.
Have a look at some of the cheapest education loans offered in India provided by top loan providers:
- State Bank of India
SBI provides one of the cheapest education loan for abroad studies via the SBI Student loan schema. SBI provides loans for all graduate, post-graduate, and professional courses such as MS, MBA, etc. at recognized universities and is reputed in their home country.
Education loans can be accounted for up to a maximum amount of 30 lakhs with collaterals or security deposits needed for loans of more than 7.5 lakhs. Repayment can be done over a period of 10 to 12 years and can be extended up to 15 years in some cases. The loan margin requirement in terms of education loan is 15% and the interest rates are up to 2% over the base interest rate granted by SBI.
The complete interest payment can be done during the moratorium period, as a result, only principal payments are left after the loan tenure starts.
- Axis Bank
Axis Bank is also recognized as one of the best banks to opt for the cheapest education loan. It provides advantages such as:
Hassle-free loans are offered by Axis Bank for all career-oriented and professional courses in different streams such as MSc, MBA, ME, etc. at approved institutes and universities. In the case of Axis Bank, cheap education loans can be availed from a minimum amount of 50,000 up to a maximum of 20 lakhs and include everything from tuition fees to hostel fees. It is compulsory to have a guardian or parent as a co-applicant. As collateral is optional in most of the cases.
For loans above 4 lakhs, the education loan margin requirement is 5%, whereas loans below the amount of 4 lakhs are exempted. The interest rates can start with as low as 8.7%, with exclusive provisions for girls and women. With zero processing fees, their loan approval span can be as little as 15 days.
- HDFC Bank
Discussing the cheapest education loan for abroad studies, one of India’s oldest established banks – HDFC, has constantly been on the forefront. Some of the advantages it provides are:
Education loans are provided for more than 950 professional programs at authorized universities across 36 countries. Education loans can be availed for up to a maximum of 20 lakhs with flexible adjustments available for co-applicants, security deposits, or collaterals. Individuals between the age of 16 to 35 years are eligible to opt for education loans.
One of the major reasons why HDFC bank is recognized as the best banks for education loans is their 0% loan margin requirement. HDFC bank will pay up to 100% of your needed amount. Though a 1.5% processing fee is applicable, they allow few loan applications of students to be pre-approved even before the beginning of the admission process. Also, there are no penalties applicable to pre-payment.
- Punjab National Bank
Another nationalized bank known to be one of the best and preferred banks for offering the cheapest interest rates for education loans is PNB. It provides cheap education loans through its Udaan scheme. Some benefits attached to it are:
Education loans are granted for top-class universities providing professional, diploma, graduate, and post-graduate courses across different streams such as science and technology, medicine, etc. The loans cover everything ranging from tuition, exam and textbook fees to travel expenses, etc.
The repayment period is of 15 years and their interest rate is specified at the bank’s base rate.
For the approval of education loans of more than 4 lakhs the loan margin requirement is 15%. Any scholarship availed by you can be added to this loan margin. The moratorium period lasts up to a year and the complete interest payment can be made during the period. Also, there are no prepayment charges included.
In this blog, we have classified some of the major banks providing the cheapest education loans. Though, there are still several other financial institutions that may support you in your quest. Go through every available option and choose the one that fits best within your parameters.