With an increasing number of Indian citizens planning on pursuing education overseas, the number of student loans being sanctioned is multiplying.
Public Banks rate of interest is usually 1% to 2.5% lower than Private banks and NBFCs. The interest rate that public banks charge ranges from 8.5% to 10.5%. If you take an SBI education loan, the interest rate will be 9.5%-10%. Punjab National bank has an interest rate of about 10.15%. Bank of Baroda charges 9.5%-10.3%. Canara Bank has an interest rate of 9.95%-10.45%. On the other hand, private banks have an interest rate from 10.5% to 13.5%, sometimes 14%. Axis bank’s interest rate lies between 10.5%-13.5% (endpoints inclusive for loans with collateral). At NBFCs, the education loan interest rates are usually around 11% to 14.5%. Credila (11.5%-14.5%), Avanse (11.5%-14%), Incred (11.2% to 13%) are some of the NBFCs from which you can take a loan. There are few international NBFCs which can offer loans to international students such as STILT, Prodigy Finance but they have a restriction on the Universities they support. Most of the financial institutions sanctioning educational loans for studies abroad, cover expenses like admission fee, tuition fee, living expenses, book expenses etc.
Which bank should you choose?
Now that you have some idea about the different spectrums of education loan interest rate, loan amount, processing fee and other things at private banks, public banks and NBFCs, you can choose a loan based on your preferences.
If education loan interest rates and processing fee concern you, then you could choose a public sector bank since they have low-interest rates – Education loan in SBI, Punjab National Bank, Bank of Baroda are usually the most sought after.
If you don’t have any property or liquid security i.e. collateral security but then you can approach NBFCs.
If repayment of interest while studying is something that has been bothering you then you should approach public banks as they are more flexible and less stringent as compared to private banks.