If you are planning to go for higher studies and are worried about the financial aspect of it, an education loan may be just the thing for you. As a result of the rising education costs and a rapid increase in the demand for higher studies among a major portion of the Indian population, there is no dearth of banks offering education loans. The following are four of the popular education loan options provided by the country’s leading public sector banks.
State Bank of India Student Loan
State Bank of India, the country’s largest public sector bank, has been offering student loans for several decades and remains one of the most popular options among those seeking education loans. The bank provides loans to those with a strong academic record seeking admission to graduate/post graduate level courses in India as well as abroad. Apart from the tuition fees, the SBI student loan also covers additional expenses like caution deposit and hostel fees.
Cent Vidyarthi
Cent Vidyarthi, the student loan program of Central Bank of India (CBI), is offered to candidates pursuing professional courses at reputed colleges/universities, job/management-oriented courses and computer courses of one year or more offered by C-DAC, CMC, APTECH and NIIT.
Union Bank of India Student Loan
The student loan option floated by Union Bank of India (UBI) requires you to be an Indian National who has qualified by passing a relevant national/state level entrance examination such as CAT, IIT-JEE, etc. This education loan is provided for higher education in India as well as abroad and the maximum repayment period on this loan is 15 years.
Punjab National Bank Saraswati
Saraswati is the education loan provided by Punjab National Bank to applicants seeking admission in graduate and post graduate courses at leading universities/colleges as well as job-oriented courses at foreign institutes. The minimum qualifying criteria is being an Indian citizen who has completed the 12th standard or equivalent. The maximum limit of PNB Saraswati loan is 20 lakhs.
These are only four of the popular education options that you can avail and are some things you need to keep in mind when applying for an education loan. To compare and choose other education loan options, log on to Paisabazaar. Following is a tabular comparison of the education loan options mentioned across few select criteria.
Table1. Comparison of SBI, Cent Vidyarthi, UBI and PNB Saraswati Student Loan*
|
Comparison Criteria |
SBI Student Loan |
Cent Vidyarthi |
UBI Student Loan |
PNB Saraswati |
|
Eligibility |
An Indian national seeking higher education in India or Abroad with admission confirmation |
Indian citizen who has qualified a national level entrance exam/over 50% in 12th standard or equivalent exam |
Indian citizen with confirmed admission to a recognised graduate/post graduate institute |
Indian citizen with confirmed admission to a recognised higher education institute with proven academic track record. |
|
Min./Max. Loan Amounts |
Max. Rs. 10 Lakhs (Domestic)/Max. Rs. 30 Lakhs (Overseas) |
Max. Rs. 10 Lakhs (Domestic)/Max. Rs. 20 Lakhs (Overseas) |
Max. Rs. 10 Lakhs (Domestic)/Max. Rs. 20 Lakhs (Overseas) |
Max. Rs. 10 lakhs. |
|
Interest Rates |
2% + base rate (up to Rs. 7.5 lakhs) and 1.7% + base rate (> Rs. 7.5 lakhs) |
2% + base rate for male student/1.5% + Base Rate for female student |
3% + Base Rate for loans up to Rs. 4 Lakhs/ 2.75% + Base Rate for loans > Rs. 4 lakhs and up to Rs. 7.5 lakhs/ Base Rate + 2% for > Rs. 7.5 Lakhs |
3% +base rate up to Rs. 4 Lakhs loan, 4% + base rate > Rs. 4 lakhs up to Rs. 7.5 lakhs, base rate + 2% for > Rs. 7.5 Lakhs |
|
Processing Fees |
Nil |
Nil. Studies in India/ Rs. 500 for loans up to Rs. 10 lakhs and Rs. 1000 for loans over Rs. 10 lakhs |
Nil |
Nil |
|
Maximum Repayment Period |
Max. 10 years for up to 7.5 Lakhs; 15 years + 12 months moratorium > 7.5 Lakhs |
Max. 10 years for up to 7.5 Lakhs; 15 years + 12 months moratorium > 7.5 Lakhs |
Max 10 years for up to Rs. 7.5 Lakhs/ Max 15 years for Rs 7.5 Lakhs. |
Max 10 years for up to Rs. 7.5 Lakhs/ Max 15 years for Rs 7.5 Lakhs. |
|
Guarantee Requirement |
Only parent/guardian as co-signor up to Rs 7.5 Lakhs, Additional collateral required for > Rs. 7.5 Lakhs |
Up to Rs. 4 Lakhs, parent/guardian to be joint borrowers/ > Rs. 4 Lakhs, up to Rs 7.5 Lakhs, third party guarantee is also required/>Rs 7.5 Lakhs, tangible collateral acceptable to bank is required in addition to co signor and 3rd party guarantee |
No security requirement up to Rs. 4 Lakhs/ > Rs. 4 Lakhs up to Rs. 7.5 Lakhs/ suitable third party guarantee required, > Rs 7.5 Lakhs, suitable collateral with minimum value equal to loan amount+ interest till moratorium period required. Parent/spouse as co-borrower in all cases. |
Parent/guardian as joint borrower in all cases. No additional guarantee required for loans up to Rs 4 lakhs. Suitable 3rd party guarantee required for loans >Rs 4 lakhs and Rs 7.5 Lakhs. For > Rs 7.5 Lakhs additional bank approved collateral of same or greater value required. |
|
Special Discounts |
Interest rate 0.5% less for female student |
1% interest concession during study period if interest is serviced during study period and moratorium period. |
|
No prepayment penalty. |
*Data such as eligibility criteria, interest rate and other features are liable to change. Please log on to Paisabazaar for updated information regarding these and other education loans.