Students who need financial assistance might borrow money to pay for their education through education loans. These loans, which can be used to pay for tuition, fees, housing, and other education-related costs, are often offered by banks, credit unions, or other financial institutions.
For students who require financial aid to pay for their higher education, India offers a variety of education loans. To pay for tuition fees, housing costs, travel costs, and other costs associated with pursuing a course of study, students can obtain education loans from banks, financial institutions, and other lending organizations.
You must meet certain qualifying requirements, such as being an Indian national, having an outstanding academic record, and proving financial necessity, in order to apply for an education loan in India. Additionally, you might need to offer collateral or a co-signer depending on the lender and the loan amount.
Which is the Best Education Loan in India ?
Some of the best education loans in India available are included below, along with brief descriptions and information on each loan type:
PNB Education Loan
Students who want to pursue higher education in India or elsewhere can apply for education loans from Punjab National Bank (PNB).
The loan can be used for professional, post-graduate, and graduation courses, among other courses. Depending on the needs, the loan amount can be of any amount.
SBI Education Loan
The State Bank of India (SBI) provides financial aid to students seeking higher education in India or overseas through the SBI Education Loan program.
The purpose of the loan is to assist students in meeting the price of books, tuition, fees, and other study-related expenses. One year after the course ends, the repayment must be completed. For loans up to Rs. 20 lakh, it has no processing fees.
Axis Bank Education Loan
Education loans are provided by Axis Bank to students who want to continue their education overseas or in India itself. It is among India’s top banks for student loans.
Tuition, living expenses, and other costs may be covered by the loan amount, which is determined by the student’s chosen course and school.
Loan disbursement occurs within 15 business days of application submission, with a minimum loan amount of Rs. 50,000.
Bank of Baroda Education Loan
This loan can be authorized for students who have been accepted into a reputable university for postgraduate study in India or overseas after competing in an exam or being chosen on the basis of merit.
Processing fees and documentation costs are nonexistent. Up to 7.5 lakhs, no collateral is needed. Loan repayment starts six months after landing a job or a year after the course ends, whichever comes first.
HDFC Bank Education Loan
Considering living costs, tuition, and other course-related costs, HDFC Bank provides one of the best education loan in India to students.
Repayment terms might last up to 15 years. When applying for a loan up to INR 7.5 lakhs, no collateral is needed.
Best Education loan in india without collateral
Collateral, which might include fixed deposits, real estate, shares, bonds, and other securities, is required for almost all bank and other lender education loans. You are still able to apply for an education loan without providing any collateral, though.
The Credit Guarantee Fund for Education Loan (CGFEL) Schemes, which offer up to a Rs. 7.5 lakh collateral-free loan, can help achieve this. This is exclusive to student loans distributed through the Indian Banks’ Association’s Model Education Loan Scheme (IBA).
You must apply for an education loan under this program through a scheduled commercial bank in order to get this. For sums up to Rs. 7.5 lakh, you are not need to offer security or collateral; however, for amounts over that, collateral will be needed.
Best Education loan in India for study abroad
HDFC Credila
Education loans with favourable interest rates for reputable universities are available from HDFC Credila. HDFC Credila has provided funding to thousands of students studying abroad. HDFC Credila is acquainted with the admissions and educational systems of India and other countries.
Unlike banks, which often charge a set rate for a specific set of students, HDFC Credila offers a range of rates depending on the student’s academic record, the co-borrower, the institution, and the collateral security supplied.
State Bank of India
Education loans from SBI are available for study abroad to pursue postgraduate degrees in countries that are job-oriented for professional and technical graduates such as Italy, Russia, the US, the UK, Finland, Austria, Norway, Poland, Denmark, Germany, Ireland, Spain, New Zealand, Canada, Singapore, etc.
These courses include diploma programs at respectable colleges, MBA, MCA, and MS programs, among others. The SBI study loan for overseas students covers a variety of expenses. It includes tuition, books and equipment costs, exam fees, lab and library fees, caution deposits, and travel expenses.
Axis Bank
Students who want to study abroad for technical, professional, or career-oriented courses can apply for education loans. Depending on the needs and credentials of the applicant, Axis Bank offers student loans with no maximum amount, starting at INR 50,000, and covering up to 100% of the whole cost of study (including course fees, book costs, living and travel expenses). Obtaining an education loan from Axis Bank is a hassle-free process overall.
Punjab National Bank
For Indian students who have excelled academically and wish to pursue their education overseas, PNB Udaan is a special education loan program. Students who have been accepted into graduate or postgraduate programs, such as diploma programs, career-focused professional or technical courses, CIMA/CPA programs, etc., are eligible for the loan.
University fees, travel costs, test fees, lab fees, library fees, book/equipment fees, and other relevant costs are all covered by the PNB loan. The loan applicant must be an Indian national and must have been accepted into a graduate program at an accredited overseas college or university via entrance examination or merit-based selection. He/she ought to have passed the HSC as well.
Bank of Baroda
A Baroda Scholar Loan is available for MBA, MCA, MS, and other accredited programs that support the creation of jobs. Under the Baroda Scholar Loan program, students can apply for an education loan before departing for professional or technical studies overseas.
For the student to be eligible for the Baroda Scholar Education Loan in India, they must be accepted into the approved program and institution. The loan cap is Rs 80 lakhs for designated institutions and Rs 60 lakhs for non-designated institutions.
Eligibility Criteria for an Education Loan
- Nationality – Indian Citizen, Non-Indian Residents (NRIs), Overseas Citizens of India (OCI), Persons of Indian Origin (PIO), and Students born to Indian parents overseas who seek to study in India.
- Courses – Nursery to grade 12, courses that have been approved for graduation and post-graduation, career-focused courses, doctoral programs, PhDs, diploma programs, etc.
- Collateral – Plot, fixed deposits, residential or commercial property, and insurance.
Advantages of Education Loan
Here are some reasons why it makes sense for you to choose an education loan when you need one:
1. Entire Cost of Education covered:
The full cost of education, including tuition, living expenses, and other costs associated with studying overseas, can be covered through education loans. This can be especially helpful for students who might not have the money to pay for these things on their own.
2. No Collateral:
For a predetermined amount, many school loans in India don’t require collateral, which makes them more accessible to students who might not have any.
3. Loan Repayment Period:
Longer repayment terms for education loans allow borrowers to pay back the loan in smaller installments over a longer period of time. Students may now handle their money more easily and repay the loan without feeling overwhelmed.
4. Afford Good Education:
Let’s be real here, okay? Without the aid of student education loans, the vast majority of Indians would be unable to afford college since it is so expensive. Anything that enables you to achieve your goals while simultaneously receiving a top-notch education, in my opinion, can’t be all terrible.
5. Burden on Parents reduced:
It spares parents of having to pay for their child’s education financially. No matter their economic source, people from all walks of life can now obtain an educational loan.
In India, a cosigner is required for student loans for education. Your co-borrower’s credit score rises and their legal responsibility for your debt is established when you take out a school loan.
6. Tax Benefits:
Under the Income Tax Act, students who borrow money for education in India are eligible for tax benefits. By doing so, the entire cost of the loan may be decreased, making it more reasonable for students.
7. Good Credit Score:
Students who repay their loans on time might improve their credit scores. It can be advantageous when applying for additional loans or financial goods.
Disadvantages of Education Loan
1. Impossible to unburden yourself if you can’t pay: Your co-borrowers’ future borrowing options may suffer significantly if they are unable to make payments for whatever reason. Payment on schedule is crucial. Because it will severely affect both their and your future creditworthiness if they don’t. Future lenders will deny your application after examining your credit history.
2. Always a burden: You will face a lot of strain to locate the money to pay the subsequent EMIs on time if you fail to make your EMI payments on time. Therefore, failing to make even a single EMI payment can result in ongoing lateness.
3. May not cover all your expenses: Generally speaking, student loans only pay for books, tuition, and fees. The costs of life, such as housing, food, and transportation, might not be met by them. But Exceptions are always there. This implies that in order to pay for these costs, you could have to take out more loans or work part-time.
4. Long Repayment Time: Repayment durations for student loans usually range from 10 to 20 years. This can strain your finances because it implies you will be making monthly payments for an extended period of time.
5. Can Effect your Credit score: Your credit score may suffer if you fail to make a student loan payment. It could be challenging to be accepted for future credit cards or loans as a result of this.
Is taking Education Loan good or bad ?
It’s crucial to carefully analyze the benefits and drawbacks before taking out a student loan. Verify your understanding of the loan’s terms and your assurance of your ability to make the required installments.
Other options, such work-study programs, grants, and scholarships, should be taken into account for financing your education.
How to repay Education Loan ?
- Create a monthly spending plan and follow it. Make an evaluation of your spending patterns.
- You can pay off your education loan in one big sum. Foreclose the loan whenever possible to lower the principal faster, in addition to making regular EMI payments on it. This will shorten the loan’s term and reduce interest payments.
- One of the greatest methods to pay off your education loan and keep your debt to a minimum is to get a part-time job.
- Poor money management can make it difficult for you to pay off your debts fast. Planning and comprehending your monthly cash flow can help you make the required adjustments to your spending plan.
Conclusion
First learn about the best education loan bank in india and best education loan provider in india. Then, select the provider according to your suitability.
Before applying, it is crucial to review and evaluate the various terms and conditions of school loans because they might have a wide range.
Additionally, thoroughly read and comprehend the loan agreement, paying particular attention to the interest rate, payback schedule, and any additional fees or costs.