Make college memories that last a lot longer than your student loan payments.

How to get an Education Loan?

Quality education is crucial to creating a successful life for a student. However, with increasing college fees every year, it becomes difficult for a student to have a quality education. Education in India, especially in premier educational institutions, is quite expensive. And in many cases, even if a student is qualified to get admission purely on merit, it becomes difficult to study in such institutions due to financial constraint. Cost of education in India is anywhere between Rs.5 lakhs and Rs.12 lakhs for undergraduate engineering courses. For medical courses in India, the fees can rise up to 50 lakhs in private colleges. Business schools in India charge more than Rs.10 lakhs. In abroad, cost of higher education is much higher. Again, fees in private colleges are always more than the government colleges. Under such circumstances, students look for education loans in India. With so many banks offering education loans, it is also very confusing for parents and students to choose the best one. We give below a brief idea on how to get the right education loan.

  • Education Loan versus Personal Loan

    Many parents might feel that taking a personal loan for higher education is beneficial. But as a matter of fact, this is not true. You take personal loan at a higher rate of interest and you end up paying more. Instead, an education loan comes with a number of benefits and conveniences and is specially meant to be given for education which serves the purpose of the students.

  • Comprehensive Educational Loan Scheme: Government of India

    The Government of India has framed a Comprehensive Educational Loan Scheme in consultation with Indian Banker’s Association (IBA) and the Reserve Bank of India (RBI). The scheme covers all type of courses in schools and colleges in India and abroad.

  • Benefits of Education Loans

    • Applicable for all: Any student who wants to study can apply for an education loan. Even the economically backward sections of the society can take education loans under the government-sponsored subsidy schemes such as ‘Central Scheme to provide Interest subsidy’ (CSIS).
    • Applicable for all courses: Education loan can be used to pursue all types of courses — graduation, post-graduation, diploma courses, vocational courses — whether in India or in foreign universities.
    • Easily available: Education loans are widely and easily available. In fact, they are a priority product in all banks as per the RBI’s guidelines.
    • Varied loan amounts: Banks can offer loans anywhere between Rs.2 lakhs and Rs.22 lakhs for studying in India. Of course, the size of the loan depends on the course applied for. To study abroad, the loan amount goes up to Rs.20 lakhs.
    • Helps in completion of education: The expense curve of education is increasing with inflation and shifting prices. To avoid hindrances in studies, education loans become essential.
    • Benefits: Education loans include many additional benefits like caution deposits, library fees, building deposits, laboratory fees, tuition, examination fees, hostel fees, money for buying books, instruments and uniform, travel expenses for studies abroad, etc.

      Low interest rate for females: Usually female students are offered loans at lower interest rates.

    • Easy repayment: Also, another great advantage of education loan is that the loan amount need not be repaid immediately. The repayment tenure can extend up to 5 to 7 years after the completion of the course. This makes it easy for repayment.
  • Conditions to apply for education loans in India

    Some basic requirements need to be fulfilled while taking a loan. These conditions are as follows:

    • The main determinants are the fees of the course to be pursued and the applicant’s annual family income.
    • There must be a co-applicant, which can be either one of the parents or sibling or spouse.
    • Loans below Rs.4 lakhs do not require a guarantor or security.
    • For loans above Rs.4 lakhs, there should be a third-party guarantor.
    • For loan amount more than Rs.7.5 lakh, a collateral is necessary.
    • For studying abroad, a student must also look for part-time jobs or sponsorship as the loan
    • amount itself is not sufficient.
    • Insurance is compulsory for studying abroad.
  • Repayment of loans
    • The repayment process should immediately start after 6 months to 1 year of completion of the course, though it can be extended to 5 to 7 years.
    • In case of non-repayment, the student’s own credit history as well as his co-applicant’s history gets affected.
  • Interest rates of education loan

    In India, interest rates for education loans vary according to banks. However, it can be anywhere between 12.00 % and 16.00 %, which of course depends on the bank’s base lending rate and other factors. The base lending rate for banks in India, as directed by the RBI, is around 9- 10%.

  • Important tips before applying for education loan
    • You should carefully consider the financial capabilities and liabilities of your family and then opt for an education loan, with the intention of repaying it on time so as to not to include you and your parent’s name in the defaulters list.
    • Education loan is more like an investment. Low interest rate, even of it is 0.5% less, along with a longer repayment period is more helpful. So, it is very essential that you should carefully study and understand the conditions for applying in different banks before choosing the most favorable bank.
    • When the bank is finally chosen, make sure you read all the terms and conditions and checklists of the loan application form because there might be some hidden costs as well.
    • You should usually choose a bank which provides the facility for extension of the repayment tenure in case of delay under unforeseen circumstances.
    • Students from the economically weaker strata of society should opt for government-controlled banks as they offer some benefits in the form of interest-subsidy for students.
    • Also, know in details what does your education loan cover? The loan amount does not come to you. It goes directly to the institution where you want to study, at the beginning of each semester. Hence, it should cover all the benefits and services offered so that you do not have to incur any additional costs.

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Education Loan Reviews

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  • Punjab National Bank Education Loan
    "Need improvement on the service and interest"
    PUNJAB NATIONAL BANK
    0.5 2.0/5 "Expected more"
    I had education loan with Punjab National Bank but they charged more interest and also service is not upto the mark hence I closed in 2014. Earlier I took the amount Rs. 2.25 lakhs the duration for three years. I am not fine with the interest and response.
    Was this review helpful? 0
    , gurgaon
    Reviewed on Apr 23, 2019
  • Syndicate Bank Education Loan
    "Need improvement on the app and customer care"
    SYNDICATE BANK
    0.5 2.0/5 "Expected more"
    I took educational loan from Syndicat Bank, they are slow in their process they should be more proactive to the customer queries. The interest rate is very good for this loan I took the loan amount of Rs. 1.6 lakh for the duration of two years, they do have option to track the loan history through online but they need to develop their platform.
    Was this review helpful? 0
    , bangalore
    Reviewed on Apr 23, 2019
  • IOB Education Loan
    "GOOD"
    INDIAN OVERSEAS BANK
    0.5 5.0/5 "Blown Away!"
    The documentation process was simple with simper documents provided at the beginning for applying the educational loan with the INDIAN OVERSEAS BANK. The loan approval was soon, for each semester i got the loan amount Overall service is good.
    Was this review helpful? 0
    , chennai
    Reviewed on Apr 22, 2019
  • Central Bank of India Education Loan
    "Good for education"
    CENTRAL BANK OF INDIA
    0.5 5.0/5 "Blown Away!"
    I do have education loan with Central Bank of India, the experience was good. I studied in reputed college hence the service was door step. The bank response is some what lacking, they need to improved. I took the principal amount of Rs. 6.80 lakhs, the interest rate is very less compared to all.
    Was this review helpful? 0
    , bangalore
    Reviewed on Apr 22, 2019
  • Bank of Baroda Education Loan
    "Excellent"
    BANK OF BARODA
    0.5 5.0/5 "Blown Away!"
    Bank of baroda is good for everything , their customer service is very good and response is also good , I took one education loan from this bank , loan amount is 1.20L and rate of interest is nominal , I am always happy with bank of baroda bank and their service,
    Was this review helpful? 0
    , mumbai
    Reviewed on Apr 19, 2019
  • Bank of Baroda Education Loan
    "Excellent"
    BANK OF BARODA
    0.5 5.0/5 "Blown Away!"
    Bank of baroda is good for everything , their customer service is very good and response is also good , I took one education loan from this bank , loan amount is 1.20L and rate of interest is nominal , I am always happy with bank of baroda bank and their service ,
    Was this review helpful? 0
    , mumbai
    Reviewed on Apr 19, 2019
  • SBI Education Loan
    "Best in the market"
    STATE BANK OF INDIA
    0.5 4.0/5 "Great!"
    Still my SBI education loan is active condition, I took initial days of my college. It has lots of paper work and they taken long time for sanctioning the amount. I took the loan for 7 years, that point of time the process was not simple, but they gave me the best interest in the market. I don't want to pay the interest while studying, later on the interest will be calculated.
    Was this review helpful? 2
    , gurgaon
    Reviewed on Apr 10, 2019
  • SBI Education Loan
    "Discount in the Interest "
    STATE BANK OF INDIA
    0.5 4.0/5 "Great!"
    For my education , I took a loan amount of more than 1.5 lakh from SBI . In SBI getting any details and information from branch people is very difficult . Thank god . Some how they reduced my interest rate .Because of that , I completely paid my education loan .
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 09, 2019
  • IOB Education Loan
    "GOOD"
    INDIAN OVERSEAS BANK
    0.5 4.0/5 "Great!"
    I have applied for the education loan with the INDIAN OVERSEAS BANK they have offered with the good loan amount and the documentation process was huge and also the process was delay to sanction added on that the rate of interest was higher than others.
    Was this review helpful? 0
    , coimbatore
    Reviewed on Apr 08, 2019
  • Corporation Bank Education Loan
    "Compound Interest for Education loan"
    CORPORATION BANK
    0.5 3.5/5 "Pretty good"
    I took more than 2 lakh as a education loan form Corporation bank . While taking the loan , they said there is no interest for education loan . After that, they are suddenly including the interest without any prior information . They are adding compound interest in my loan . Now I have to pay some thing around 80 thousand as a balance amount .
    Was this review helpful? 0
    , bangalore
    Reviewed on Apr 08, 2019
  • SBI Education Loan
    "Good overall"
    STATE BANK OF INDIA
    0.5 4.0/5 "Great!"
    I had taken an educational loan with State Bank of India. The customer support is good and there are no hassles in the process. The documents was taken on time and there has been no hassles till date. The rate of interest and processing fees is also good.
    Was this review helpful? 1
    , bangalore
    Reviewed on Apr 07, 2019
  • Bank of India Education Loan
    "Its Average"
    BANK OF INDIA
    0.5 3.0/5 "Satisfactory"
    I closed my education loan, its totally government bank, the process was very slow. I took the loan before five years as per their prospective they quoted the interest for the principal. They bank staff need improvement they are good in customer support.
    Was this review helpful? 1
    , noida
    Reviewed on Apr 06, 2019
  • andhra Bank Education Loan
    "Both Interest rate and Processing fees is rocket high"
    ANDHRA BANK
    0.5 1.0/5 "Really Bad"
    When I am looking loan for my higher education . I went to Nationalized Andhara Bank at that time . I don't have much time to go through the entire documents . After that only , I come to aware of that very high interest rate will be charged . Even the Govt bank are not charging the correct interest rate .
    Was this review helpful? 2
    , hyderabad
    Reviewed on Apr 03, 2019
  • Canara Bank Education Loan
    "Interest rate is to be waived off"
    CANARA BANK
    0.5 5.0/5 "Blown Away!"
    I taken a amount of more than 6 lakhs from canara bank as a education loan . At that time , We dont have more amount of cash for my education . We took a help from cananra bank to pursue my education . Canara bank supported us and good customer service .
    Was this review helpful? 0
    , noida
    Reviewed on Mar 28, 2019
  • Canara Bank Education Loan
    "Convenient"
    CANARA BANK
    0.5 4.0/5 "Great!"
    I took my education loan with Canara Bank long back ago. The interest rate is good and monthly installment will be paid through online. The customer service was good and the response was immediate. Am paying monthly 10K to complete this loan.
    Was this review helpful? 2
    , chennai
    Reviewed on Mar 26, 2019
  • SBI Education Loan
    "Average service"
    STATE BANK OF INDIA
    0.5 3.0/5 "Satisfactory"
    My eduction loan was taken with State bank of India previously,they have given me good opportunities,and the loan amount which they have given me was good,the rate of interest they have charged me was 13% which was nominal.Now i have successfully closed this loan in this January.
    Was this review helpful? 3
    , bangalore
    Reviewed on Mar 26, 2019
  • IOB Education Loan
    "Interest rate need to be waived of "
    INDIAN OVERSEAS BANK
    0.5 3.0/5 "Satisfactory"
    I taken my Education loan for my UG studies in Indian Overseas Bank .A amount of 4 lakh has been provided on the yearly basis . I started to pay back the loan and almost 24 months of EMI has been completed . But I am not happy with the interest rate for Educational loan .
    Was this review helpful? 1
    , bangalore
    Reviewed on Mar 21, 2019
  • Canara Bank Education Loan
    "Very Good Service"
    CANARA BANK
    0.5 4.0/5 "Great!"
    The experience i had with this Educational loan was pretty goo and it is still running, where the loan amount and the interest rate has been pretty good. The charges which they had made has not been higher and there has not been any hassle faced with their banking services.
    Was this review helpful? 0
    , mumbai
    Reviewed on Mar 20, 2019
  • Indian Bank Education Loan
    "GOOD"
    INDIAN BANK
    0.5 4.0/5 "Great!"
    I have taken the education loan with the INDIAN BANK the documentation process was simple and i got the loan within few days. I have got the loan amount for each semester. The customer service is good and i am satisfied with this education loan.
    Was this review helpful? 0
    , bangalore
    Reviewed on Mar 10, 2019
  • SBI Education Loan
    "GOOD"
    STATE BANK OF INDIA
    0.5 4.0/5 "Great!"
    I have taken the education loan with the STATE BANK OF INDIA the documentation process was simple and i got the loan within days but the approval got delayed. I get the loan amount for each of the semester. They have offered the satisfactory loan amount.
    Was this review helpful? 5
    , new delhi
    Reviewed on Mar 09, 2019
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