Education plays a critical role in paving the way for a good career and opening employment opportunities for your children. You cannot afford to delay or postpone educational expenses. Often despite financial planning, you may find it difficult to arrange the required funds to afford the expensive fee of certain educational institutions. An education loan helps you arrange funds to fulfil your child’s dream to study in reputed colleges or institutions.
Banks or financial institutions give student loans or education loans to assist students in taking care of the cost of their higher education. You can apply for an education loan to study both within Indian institutions or anywhere in the world. Such loans are easily available, and you can quickly get them disbursed provided you meet all required eligibility criteria of the financial institutions.
Many banks offer student loans at low-interest rates and flexible terms and conditions to students who secure higher ranks. For education loans, the documentation process is kept to a bare minimum so that students can obtain their loans without waiting too long.
Banks are often careful while analysing the eligible students to ensure that monetary aid reaches deserving candidates. Before approving the education loan, banks may check students’ academic records, prospects of the course and current admission status, along with the repayment capacity of the family in case the loan amount is on the higher side.
Also, some banks may offer education loans at lower interest rates if the student has secured a scholarship in a reputed educational institution. It is advisable to check with the bank all the offers you may be eligible for as per your profile and educational qualifications. You must also check with the bank to know whether you are eligible to get a lower interest rate on your education loan.
It is important to know the overall budget of your education before applying for the loan. You should also compare the interest rates of different banks and choose the institution that can offer you a lower rate of interest with better facilities. Knowing the budget of your education course, including your travel, stay, exam fee and other miscellaneous expenses, can help you decide your loan amount. Often banks will give you the total cost of your education; however, there are expenses your education loan may not cover. You should have prior knowledge of such costs, according to BankBazaar.
Also, carefully choose the tenure and EMI to ensure trouble-free repayments. Any delay in loan repayments or default may lead to financial difficulties. Check all the additional charges and penalties mentioned in the loan agreement before you sign it.
The table below compares the interest rates of different banks and EMIs to help you make a wise decision regarding your education loan.
Interest Rates & EMI on Education Loan
Compiled by BankBazaar.com
Note: Interest rate on Education Loan for all listed (BSE) Public & Pvt Banks considered for data compilation; Banks for which data is not available on their website, are not considered. Data collected from respective bank’s websites on 02 Aug 2022. Banks are listed in ascending order on the basis of interest rate i.e., bank offering lowest interest rate on education loan (irrespective of loan amount and tenure) is placed at top and highest at the bottom. EMI is calculated on the basis of interest rate mentioned in the table for a Rs 20 lakh loan with a tenure of 7 years (processing and other charges are assumed to be zero for EMI calculation).