Public Sector Banks Education Loan Products: A Detailed Comparison

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List of Public Sector Banks Providing Education Loans
Benefits of Education Loans from Public Sector Banks
Which is the Best Bank for an Education Loan?
How to Compare the Loan Products to Find the Best Education Loan?
How can GyanDhan Help in Getting the Best Education Loan?

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Explore public sector bank education loans for higher studies in India and abroad. Get details on loan eligibility, benefits, interest rates, and more.

Gurbani Kaur Suri

A keen lover of reading and loves to explore new things. A strong believer of spirituality and goodness.

Updated on: 11 Sep 2023 | Reviewed By: Aman

Aman Jain graduated from IIT Kanpur, and currently functions as the CMO at GyanDhan. He is deeply passionate about creating equality in higher education and has directly interacted with 2 Lakh...

| 10.5K | 27 min read

Financing higher education with an education loan is daunting. Not only do you have to search for a product that covers your expenses, but you also have to search for one that doesn’t blow a hole through your pocket. After all, an education loan is a financial responsibility for at least a decade and you should select a product that will help you finance your education while saving your money.

We, at GyanDhan, will make this whole process easy for you. Below is a detailed comparison of education loans offered by various public sector banks. Refer to this before you settle on a lender.

Let’s get into it -

List of Public Sector Banks Providing Education Loans

Every public sector bank in India offers an education loan to study in India. However, not every bank has a loan product for education abroad. Some of the top banks that offer education loans to study in India and abroad are as follows -

State Bank of India - Being one of the top public sector banks in India, SBI provides a wide range of education loans to students who aspire to study abroad or even in India. SBI offers various loan schemes like the SBI Student Loan Scheme and the SBI Ed-vantage Scheme. Moreover, the loan disbursement process at SBI is smooth and hassle-free. The below table details the education loan from SBI.

Particulars	Details
Loan Amount	Up to INR 1.5 crore for abroad studies
Interest Rate	9.65% (Men), and 10.15% (Women) for abroad studies
Processing Fee	INR 10,000 + taxes on loans above INR 20 lakhs
Loan Tenure	15 years
Moratorium Period	Course duration + 6 months
Margin Money	10% of the loan amount

Bank of Baroda - BOB is another prominent public sector bank that offers education loans to students willing to study abroad and in India. The bank provides various loan schemes which are designed to cover a range of expenses, from tuition fees to living expenses, and other related costs. You can also apply for these loans through the government portal, Vidya Lakshmi Education Loan.

Particulars	Details
Loan Amount	For abroad – Up to INR 1.5 cr
Interest Rate	For abroad – 9.7% - 10.50%
Processing Fees	INR 10,000 + GST
Loan Tenure	15 years
Moratorium Period	Course period + 6 months
Margin Money	10% above INR 4 lakhs

Canara Bank - Canara Bank is a renowned public sector bank that provides a variety of education loan schemes to help students who are willing to pursue higher education in India and abroad. The bank offers comprehensive loan products, including the IBA Model Education Loan Scheme, which covers tuition fees, living expenses, and other educational costs. Canara Bank does not ask the borrowers for collateral for education loans of up to INR 7.5 lakhs.

Particulars	Details
Loan Amount	Upto INR 40 lakhs
Interest Rate	7% - 10%
Processing Fees	NIL
Loan Tenure	15 years
Moratorium Period	Course duration
Margin Money	Above INR 4 lakhs 5%-15% to study abroad

Bank of India - The Bank of India offers competitive interest rates and provides education loans to help students fund their educational expenses. The Bank of India is known for its lower interest rates, flexible repayment terms, and user-friendly application process. Students can either apply online for an education loan at BOI or they can visit the nearest branch.

Particulars	Details
Loan Amount	INR 150 lakhs for abroad studies
Interest Rate	Up to 7.5 lakhs - 1 Year MCLR +1.70% Above 7.5 lakhs - 1 Year MCLR + 2.50%
Processing Fees	For abroad – INR 5000
Loan Tenure	15 years
Moratorium Period	Course Duration
Margin Money	5% - 15%

Central Bank of India - The Central Bank of India is a well-known public sector bank that offers a range of education loan schemes to help students pursue their higher education both in India and abroad. The bank provides various schemes like the Cent Vidyarthi scheme, covering tuition fees, living expenses, and various educational expenses. The table given below will detail the loan product offered by the Central Bank of India.

Particulars	Details
Quantum of Finance	20 lakh for studies abroad
Interest Rate	8.10- 10.6%
Processing Fees	Loans up to INR 10 lakhs – INR 500 Loan above INR 10 lakhs – INR 1000
Loan Tenure	15 years
Moratorium Period	Course Period + One Year
Margin Money	Upto Rs. 4 lacs: NIL In India Above Rs. 4 lacs: 5% In Abroad Above Rs. 4 lacs:15% Margin

Karur Vysya Bank - Karur Vysya Bank is a leading private-sector bank that offers a variety of education loan schemes to help students cover their expenses for their higher education both in India and abroad. The Karur Vysya Bank does not charge any processing fee and margin money up to a loan amount of INR 4 lakhs. The bank offers flexible repayment options and transfers the amount of the loan directly to the university’s account where the student is enrolled.

Particulars	Details
Quantum of Finance	For abroad – INR 150 lakhs
Interest Rate	12.05% to 14.55%
Processing Fees	NIL
Loan Tenure	15 years
Moratorium Period	Course duration
Margin Money	NIL up to 4 lakhs 5% upto 7.50 lakhs 15% above 7.50 lakhs

Indian Overseas Bank - Indian Overseas Bank is a notable public sector bank providing various education loan schemes to help students fund their higher education in India and abroad. The bank’s education loan products like the Vidya Jyoti Scheme, cover various education-related expenses, may it be tuition fees, living expenses, etc. The bank provides a hassle-free application process and flexible repayment options.

Particulars	Details
Quantum of Finance	For abroad studies – INR 40 lakhs
Interest Rate	Institute under list A - RLLR-0.60%=8.75% Institute under list B - RLLR-0.35%=9.00%
Processing Fees	NIL
Loan Tenure	10- 15 years
Moratorium Period	Course duration
Margin Money	5-15%

Punjab National Bank - Punjab National Bank is a renowned public sector bank that offers loan products like the PNB Udaan scheme, which covers various education-related expenses for abroad studies. PNB Pratibha and PNB Saraswati for the students willing to pursue higher education in India. PNB is known for its competitive interest rates and flexible repayment terms. It is required that the Vidya Laxmi portal must be filled out before the approval of the loan.

Particulars	Details
Loan Amount	PNB Udaan - up to 2 crores PNB Pratibha - up to 35 lakhs
Interest Rate	PNB Udaan - 9.25% for the top 50 listed universities PNB Pratibha - 8.10-% - 9% PNB Saraswati - 10.50% for males and 10.00% for females
Processing Fees	For abroad studies- 1% Minimum Rs.10000/- (Refundable after 1st Disbursement)
Loan Tenure	15 years
Moratorium Period	Course duration
Margin Money	Up to 4 lakhs - NIL Up to 7.50 lakhs - 5% Above 7.50lakhs - 15%

Bank of Maharashtra - The Bank of Maharashtra also offers various education loan schemes to support students in pursuing their higher studies both in India and abroad. The bank’s education loan schemes are designed in such a way that cover various educational costs like tuition fees, accommodation charges, travel expenses, etc.

Particulars	Details
Loan Amount	Need-based financing
Interest Rate	9.45%
Processing Fees	0.50% of the loan amount is charged for abroad studies (refundable if the borrower does not pursue the course).
Loan Tenure	15 years
Moratorium Period	Course Duration
Margin Money	NIL up to 4 lakhs Above 4 lakhs for study abroad - 15%

Indian Bank - Indian Bank is a public-sector bank, known for its competitive interest rates, smooth application process, and flexible repayment options. The bank offers various education loan schemes to support students in funding their higher education both within India and abroad. Applicant must have a minimum CIBL score of 650 to get their loan approved by the bank.

Particulars	Details
Loan Amount	Need-based finance
Interest Rate	8.80% to 11.40%
Processing Fees	Upto ₹10 lakhs - Nil Above ₹10 lakhs - 0.15% (maximum INR 3000)
Loan Tenure	10- 15 years
Moratorium Period	Course Duration
Margin Money	5% -15%

We will be comparing the education loan products of some of the top public banks from the above-mentioned list to find the best bank with the best loan product.

Benefits of Education Loans from Public Sector Banks

Choosing the right education loan, from the right lender can be overwhelming since the education loan provided by each lender comes with various pros and cons. However, choosing a public sector bank for an education loan can be highly advantageous for you. Public sector banks offer student-friendly loan terms which are designed to support student's higher education. Below are the benefits of why you should choose a public sector bank to finance your higher education.

Public sector banks often offer lower interest rates as compared to private banks and NBFCs, making it easier for you to repay the loan amount.
Public sector banks do not ask for prepayment charges.
Borrowers can reduce their financial burden by availing tax deductions under Section 80E of the Income Tax Act on the interest paid on the education loan.
Public banks charge comparatively lower processing fees.
Public sector banks do not ask you to pay partial or full interest during the moratorium period.

Which is the Best Bank for an Education Loan?

To find the best bank, one must compare the features and aspects of an education loan. This table below would make the comparison easier -

Name of the bank	Loan amount limit	Interest rate	Processing Fees	Loan tenure	Moratorium period	Margin Money
State Bank Of India	For India - Upto INR 20 Lakhs For abroad - Up to INR 1.5 crore	10.15% - 10.65%	INR 10,000 + GST	Maximum 15 years	Course period + 6 months	10%
Bank of Baroda	For India - Upto INR 60 Lakhs For abroad - Up to INR 1.5 crore	9.7% - 10.50%	INR 10,000 + GST	Maximum 15 years	Course period + 12 months	Above INR 4 lakhs - 10%
Canara Bank	Upto INR 40 lakhs	6.90% - 8.90%	Nil	Maximum 15 years	Course period + 12 months	5% to 15%
Bank of India	For India - INR 10 lakhs For abroad - INR 20 lakhs	8.85% - 9.85%	For India - NIL For abroad - INR 5000	Maximum 15 years	Course period + 12 months	15%
Central Bank of India	No upper limit	9.0% (Men); 8.50% (Women)	Loans up to INR 10 lakhs - INR 500 Loan above INR 10 lakhs - INR 1000	10 - 15 years	Course period + 6 or 12 months	15%
Indian Overseas Bank	For studies in India - INR 30 lakhs For abroad studies - INR 40 lakhs	10.05%	Nil	15 years	Course period + 12 months	5% - 15%
IDBI Bank	INR 20 lakhs	8.65% - 9.15%	For India - NIL For abroad - INR 5000 (refundable)	10 - 15 years	Course period + 6 months	Up to 15%
Karur Vysya Bank	For India - INR 10 lakhs For abroad - INR 20 lakhs	10.75% to 11.75%	Nil	Up to 7 years	Course period + 6 or 12 months	Up to 15%
United Bank of India	For India - INR 10 lakhs For abroad - INR 20 lakhs	10.65% - 11.40%	Nil	10 - 15 years	Course period + 6 or 12 months	Up to 15%
Union Bank of India	No upper limit	Up to Rs.7.50 lakhs: 12.25% Above Rs.7.50 lakhs: 12.00%	Nil	15 years	Course period + 12 months	Up to 15%
Indian Bank	For India - INR 15 lakhs For abroad - INR 25 lakhs	12.50%	Nil	10 - 15 years	Course period	5% - 15%
UCO Bank	For India - INR 10 lakhs For abroad - INR 20 lakhs	Up to Rs.7.50 lakhs: 11.20% Above Rs.7.50 lakhs: 12.20%	-	Up to 15 years	Course period + 1 year	For India - 5% For abroad - 15%
Punjab National Bank	INR 40 lakhs to INR 60 lakhs	8.80% to 9.55%	1% of the loan amount	15 years	Course period + 12 months	15%
Oriental Bank of Commerce	For premium colleges - INR 20 lakhs For others - INR 10 lakhs	7.30% - 9.30%	Up to 15 Years	Course period + 12 months	15 years
Andhra Bank	INR 20 lakhs	11.15% to 11.45%	5-7 years	Course period + 12 months	Up to 15%

Some public banks were further merged with the above-mentioned banks. For example -

Name of the bank	Merged with
Oriental Bank of Commerce	Punjab National Bank
Vijaya Bank	Bank of Baroda
Syndicate Bank	Canara Bank
Dena Bank	Bank of Baroda
Allahabad Bank	Indian Bank
Corporation Bank	Union Bank of India

How to Compare the Loan Products to Find the Best Education Loan?

Every aspect of an education loan should be considered while comparing different loan products. Each factor has its significance.

Loan amount - the product should cover your loan requirement. Applying for a second loan, in case the first one doesn’t cover the expenses, would be another long and cumbersome process.
Interest rate - goes without saying, one of the most important factors is the interest rate as it decides the total amount you will repay to the bank. A low interest rate would lead to low EMIs and a reduced financial burden.
Collateral - Under the Indian Banks’ Association guidelines, banks ask for collateral equivalent to or more than the required loan amount, if the loan amount is above INR 7.5 lakhs. So, regardless of the loan product and lender, if the applied loan amount is more than INR 7.5 lakhs, students will have to pledge collateral to support the amount.
Loan tenure - This factor decides the number of years your financial responsibility will continue. You can opt for a short loan tenure. However, that will increase your EMI amount. To manage EMIs and make them affordable, several students opt for a longer loan tenure.
Processing fees - A charge you pay to the bank to process your loan application. This is a one-time charge. Most public banks even refund the fees on the first disbursement of the loan amount.
Moratorium period - This is a period where the borrower is not required to make any repayment to the bank. In most cases, it is a course period plus 12 months or 6 months after securing a job. This period ensures that the student is not worried about the repayment during their education and can start repayment once they graduate. Though, students should remember that banks charge interest during this period as well, which is distributed in the EMIs. Students can also opt to serve this interest during their study if they are able. Read about pre-paying your education loan and its benefits here - Loan Repayment or Loan Prepayment: Clear Your Confusion & Save Big!
Margin Money - In simple terms, margin money is a contribution to the total expenses from the applicant’s side. Banks keep this provision as a sign of trust and to reduce their own risk. The margin money is usually 5% for loans to study in India and for abroad education loans, it is 15%. Read how margin money is calculated here - What is Margin Money in Education Loan?

Apart from this, enquire about the terms and conditions of the loan product before you apply.

Choosing the right loan product is imperative for students as it can help save money. Simply contact GyanDhan to get a fair opinion and review of the loan product.

How can GyanDhan Help in Getting the Best Education Loan?

GyanDhan has streamlined the process of education loans and made it easier to apply and track the application. We have studied the products in detail and therefore, know the nitty-gritty of every loan scheme. Our executive will go through your needs and requirements to recommend the product that is right for you and helps you save money.

The process to get an education loan through GyanDhan -

Get in touch with us.
Check your loan eligibility.
We will discuss the requirements, ask you some questions, and suggest a lender.
If the option is viable to you, we move ahead with the loan application.
Simply apply on our online portal and complete the application from the comfort of your home.
You will receive a customized document checklist from us so that you don’t miss out on any important documents.
Upload the documents on the portal.
Keep track of your loan application from the dashboard of your GyanDhan account.
An assigned Education Loan Counselor will be in constant touch with you to help out at every step of the loan process.

You might ask what we charge for our services. Nothing. It's free of cost. However, we wouldn’t mind an honest Google review as payment.

Sometimes, the middleman is what you need to get something done easily and quickly. GyanDhan is that middleman, who offers all the services free of cost. Get in touch with us today!

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