Educational loan

Leading Indian banks offer education loans to help students achieve their academic objectives.

Education Loan

Moving abroad for your higher education opens several doors. You can gain access to highly-acclaimed and globally recognised programmes, or you may enhance your career prospects for the future. We have designed a study abroad loan for students who aspire to pursue their overseas education. 

Types of Loans

Broadly student loans can be classified into two main categories i.e. Government loans also known as federal loans (in USA) provided by Government banks or other government financial institutes and Private loans i.e loans provided by private institutions.

Usually Government loans are preferred by the Students largely because of lesser rate of interest.

Besides these loans are highly subsidized by the Governments to encourage students for higher studies, More over these loans require the interest to be paid after completion of education and that too in easy to pay installment.

Students or their parents may also consider obtaining an education loan from a private institution. But before going for this option you should carefully check the reputation of the financial institutions and look for those institutions giving loans at competitive interest rates. A thorough research on all the terms and conditions regarding the payback etc should be done before going for such loans.

Once decided the amount of education loan and the agency from which to sanction this loan there comes the question how to get the loan.

How to apply?

The first thing you need to determine before applying for a student loan is how much amount you have, and how much more would you need to take as loan to meet your requirement taking into consideration the tuition fee as well as boarding and lodging expenses, etc. Thus before taking the loan all the possible expenses should be calculated precisely.

After determining how much loan you really require to meet all your expenses the second thing to finalize is the type of loan you should take.

Details of student education loan provided by State Bank of India
(One of the largest Public Sector bank of India)
Purposes for which a student can apply for education loan areEligibility for apply Student education loan
1. Tuition and other fees1. Should be an Indian citizen.
2. Maintenance costs, books & equipment, etc.2. Secured admission to professional/ technical courses through Entrance Test/ Selection process
3. Cost of passage (for studies abroad)3. Secured admission to foreign university/ Institution
4. Caution fund/building fund/refundable deposit.4. Secured admission to foreign university/ Institution
Maximum amount of education loanMargin
Although educational loan is subject to the need of the individual repaying capacity of the parents/ students yet there are following margins and ceilings.Up to Rs.4 lacs: No margin
1. Studies in India – Maximum Rs.7.50 lacs2. Studies Abroad – Maximum Rs.15 lacks1. Studies in India: 5% 2. Studies Abroad: 15%

Student Loan rate of Interest

State bank of India apply lowest interest on the students loan provided by it.
Amount of Student education loanInterest Rate
1. Loans upto Rs.4 lakhs1. 12.00 % p.a.
2. Loans over Rs.4 lakhs2. 13.00 % p.a

While interest is not required to be paid during moratorium period, payment of the same before start of repayment would entitle you to concession in interest rate applied during the repayment holiday.

Repayment of loan

Repayment Holiday – Course period + 1 year or 6 months after getting job, whichever is earlier.

The loan to be repaid in 5-7 years after commencement of repayment Prepayments permitted without any penalty.