Cheapest Education Loan in India 2024

Taking an education loan is a huge financial decision for both students and their families. Hence applicants should make the final decision after calculating the final impact of the education loan on their future financial health. Keep reading the blog to learn about the cheapest student loan in India and low interest rate education loan in India. 

Cheapest Education loan in India

The cheapest education loan in India can vary depending on several factors, including the lender, the loan amount, the course of study, and the borrower's financial profile. Here are some of the reasons that make an education loan affordable:

Government mandate

Public banks are government-owned or government-supported institutions. Governments have a vested interest in promoting education as it leads to a more skilled and employable workforce, which can ultimately boost the economy. To fulfill this mandate, they offer low-interest education loans. Therefore, education loans from government banks are cheap.

Subsidized interest rates

The government provides subsidies to public banks for low interest student loan. These subsidies are intended to reduce the financial burden on students and their families. The rate of interest of an education loan offered by public sector banks is always lower - by 1% to 2.5% than that offered by private sector banks and NBFCs. The rate of interest for an education loan by a public sector bank is between 9.5% to 11% while it is between 12% to 14% for a private sector bank. For NBFCs, the rate of interest is again very high and is between 12% to 15%. 

Tax benefits 

Another aspect of why public banks are affordable options for education loans is that they provide tax benefits. Section 80E Chapter vi(a) of the Income Tax Act allows for the total interest paid on education loan EMIs during the financial year. There is no maximum limit on the tax exemption amount on education loans. 

Processing fees

The processing fee charged by public sector banks is lower than NBFCs and sometimes even lower than private banks. Most public sector banks have a low processing fee and sometimes even have zero processing fee for an education loan. While SBI has a fixed fee of INR 10,0000 (non-refundable) for an education loan of INR 40 lakhs, both Bank of Baroda and Axis Bank have a refundable processing fee of INR 10,000. However, NBFCs would charge a non-refundable processing fee between INR 40,000 and 80000 for the same loan amount. 
 

Must Read: Student loan application for public banks
 

List of Banks Offering Low-Interest Student Loan

Public banks often provide the lowest interest rate for education loan for several reasons, primarily driven by their mandate to promote education, economic growth, and financial inclusion. 

State Bank of India (SBI) 

Abroad education loan scheme: SBI Scholar Loan and SBI Global Ed-Vantage

Eligible countries:  USA, UK, Canada, Australia, Singapore, Japan, Hong Kong, New Zealand, and Europe.
 

Eligible courses: Regular graduate degree/post-graduate degree/diploma/certificate/doctorate courses.
 

Bank of Baroda (BOB)

Abroad education loan scheme: Baroda Scholar Loan scheme

Eligible courses: 

• Job-oriented professional/technical graduate courses. MCA, MBA, MS, etc.
• Courses conducted by CIMA-London, CPA in the USA, etc.
• Regular degree/diploma courses like aeronautical, pilot training, shipping, etc. Provided these are recognized by the local Aviation/Shipping authority and Director General of Civil Aviation/shipping in India or the competent regulatory bodies in India/abroad for employment in India/abroad.

Union Bank of India (UBI)

Abroad education loan scheme: Union Bank of India special union education loan scheme for abroad studies
 

Eligible countries: USA, UK, Canada, Australia, Singapore, Japan, Hong Kong, New Zealand, and Europe.

Eligible courses: 

• Regular graduate degree/post-graduate degree/diploma/certificate/doctorate courses such as bachelor, master, MCA, MBA, MS, etc are covered. 
• Courses conducted by CIMA- London, CPA in the USA.
• Degree or diploma courses like aeronautical, pilot training, and shipping.

Punjab National Bank

Abroad education loan scheme: PNB Udaan Loan

Eligible courses:

• Only technical or professional graduate courses
• MS, MBA, etc.
• Courses conducted by CPA in the USA or CIMA in London

Application Process For Cheapest Education Loan Through Gyandhan 

The process to apply for an abroad education loan should always start with exploring and comparing different lenders and their products. Borrowers win half the battle as GyanDhan evaluates your profile and selects the best lender with the lowest education loan interest rate for them. To apply for an abroad education loan through GyanDhan, you need to follow five simple steps.
 

Step 1: Check your loan eligibility.

Step 2: An expert education loan counselor will evaluate your profile.

Step 3: Team GyanDhan will either arrange a doorstep pickup for your documents or provide a customized document checklist.

Step 4: Once the documents are uploaded, GyanDhan will proceed with the rest of the formalities.

Step 5: The bank will disburse the amount as per schedule.
 

Still, boggled by the various nitty-gritty that come hidden with an education loan scheme? Well, help is at hand in the form of GyanDhan, India’s first education financing platform. We are committed to helping our students get the best education loan scheme and make their higher education dream a reality. We assign a dedicated loan counselor who studies every student’s profile in detail and then advises the best loan scheme with the lowest interest rate for education loan best suited for you. We also provide a customized list of documents that need to be submitted and even help with the collection and submission of the loan application and required documents. Get in touch with us now and get help in not only choosing the best education loan but also getting help in your loan application and sanction too. 
 

Read Also:

• Vidyalakshmi Education Loan
• Education Loan EMI Calculator
• Education Loan Without Collateral for Abroad Studies 

Frequently Asked Questions