SBI vs BOB: Which is Better for Education Loans?

As per the Ministry of Finance, public sector banks disbursed INR 28,699 crore in education loans, while private banks disbursed INR 7,749 crore during the financial year 2023-24. This makes it evident that public sector banks are the preferred choice when it comes to abroad education loans. SBI and BOB are two of the most popular banks for education loans in India, but which one offers better terms for students? Let us compare their features, benefits, and drawbacks to help you make an informed decision.

Bank of Baroda vs State Bank of India: Education Loan Options

Before comparing the specific features of education loans, we will start by first understanding the two banks and their education loan schemes for both studies abroad and in India. Both banks offer different loan products to students who aspire to pursue higher education. The table below will help you understand the different loan schemes offered by the State Bank of India and the Bank of Baroda.

Bank Of Baroda Vs. State Bank Of India Education Loan Overview

State Bank of India and Bank of Baroda are the top public sector banks in the study abroad domain. Although both banks offer similar features, it is important to consider certain distinct factors when choosing between them. The table below provides an overview of the differences between BOB and SBI.

*Interest rate as of April 2025

Bank of Baroda vs SBI: Eligibility Criteria

When it comes to education loans, the State Bank of India and Bank of Baroda have slightly different eligibility requirements. The comparison in this section will help you understand the eligibility criteria that the students need to fulfill.

SBI Education Loan Eligibility:

SBI determines eligibility for its education loans by considering both merit and financial need. Students looking to apply for an SBI abroad education loan should meet the following criteria:

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  You must have secured admission to an approved institute.
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  Admission to a recognized university/institution for a degree or diploma program is required.
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  A minimum of 50% marks in Class 12 or graduation is required.
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  Your family’s annual income must meet their eligibility standards.
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  Loans cover graduate, postgraduate, diploma, certificate, and doctorate courses abroad. Pilot training must be approved by the respective aviation authority.

BOB Education Loan Eligibility:

BOB follows a more flexible approach and offers need-based education loans. Students looking to apply for a BOB abroad education loan should meet the following criteria:

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  The student must be an Indian citizen and at least 18 years old.
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  Admission to a recognized university for a professional or technical course through a merit or entrance-based process is required.
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  Better loan terms are available if the institution is on the Bank of Baroda’s approved list.
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  A strong academic record is required, along with meeting the lender’s criteria and prerequisite tests like the GRE, IELTS, or TOEFL.

Documents Required For SBI Vs BOB Education Loans 

Whether you are planning to study in India or abroad, both SBI and BOB have similar document requirements. Below is a simple checklist to make your education loan journey easier.

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  Admission Letter: Proof that you’ve been accepted into your chosen university or college.

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  Passport: Your identity and nationality proof.

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  Visa: To study abroad, a visa confirms that you are allowed to study in the destination country.

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  Academic Records: Your mark sheets, certificates, and transcripts that highlight your educational background.

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  Standardized Test Scores: Scores from exams like the SAT, ACT, GRE, GMAT, TOEFL, or IELTS.

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  A breakdown of your course duration, structure, and fees.

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  Loan Application Form: The loan application form that you will need to fill out and submit to the bank.

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  Income Proof: Proof of income is required, like salary slips or income tax returns.

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  Collateral Documents: Papers related to any collateral being pledged (like property documents).

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  Co-applicant’s Documents:  ID, income proof, and other necessary documents. Your co-applicant must be your parents or guardian (your immediate family members).

SBI vs BOB: Interest Rates 

The interest rate is the percentage imposed by a lender on the borrowed sum, reflecting the expense of borrowing. It plays a crucial role in choosing a bank for an education loan since even slight fluctuations in the interest rate can significantly affect borrowing expenses. Although the State Bank of India and Bank of Baroda both provide floating interest rates based on the EBLR established by the RBI, it's worth noting that they begin at different initial interest rates.

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  SBI interest rate for abroad studies starts at 9.65% for female applicants and 10.15% for male applicants. Similarly, BOB also provides an attractive interest rate, which starts from 9.7% for listed universities. 
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  SBI provides a 0.5% concession for female applicants, while BOB offers a 0.20% interest rate concession to female applicants.

Therefore, If you are a female applicant with a strong academic record, SBI could be a preferred alternative. However, for male applicants, BOB may also be a wise choice.

SBI vs BOB: Moratorium Period 

The moratorium period is a designated duration in which borrowers are exempted from making principal or interest payments. It offers students financial flexibility, enabling them to concentrate on their studies without immediate repayment obligations. Various banks may offer different lengths of moratorium periods, and opting for a bank with a longer moratorium period can grant students more time and financial relief. By carefully evaluating the moratorium periods provided by different banks, students can select a loan provider that suits their financial requirements and offers essential support throughout their academic pursuits.

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  SBI provides a moratorium period that lasts until the completion of the course, with an additional 6-month grace period, during which you may have the opportunity to defer payments without any obligation. This is known as a payment-free moratorium period.
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  On the other hand, BOB offers a moratorium period that extends up to the course duration, plus an additional 12 months, but during this period, you will be required to pay simple interest.

SBI vs BOB: Processing Fees and Margin Money

When deciding between banks for an education loan, it is important to consider the processing fees and margin money as key factors. Processing fees refer to the charges levied by the bank for handling the loan application. Margin money is the portion of the loan amount that you would need to arrange yourself.

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  The processing fee charged by SBI is 10,000 INR plus GST and this processing fee is not refundable. On the contrary, the processing fee charged by BOB is similar to SBI, which is 10,000 INR plus GST. Still, the benefit is that in case your university is listed in the premier university list then the processing fee becomes refundable, and this can be in the majority of the cases as BOB has approx 400 universities listed in the same.

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  When considering margin money, BOB does not charge any margin money if your university/college is listed in its premier list. However, if it is not listed, then you would have to arrange 10% - 15% of the amount as a margin. On the other hand, with SBI, you would have to pay 10% as a margin in every case.

Application Process for BOB & SBI Education Loan Through GyanDhan

Applying for an education loan through GyanDhan simplifies the process for both Bank of Baroda and State Bank of India loans. Below is the step-by-step guide to help you understand the loan application process.

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  Visit the GyanDhan website and fill out the loan eligibility form with details like your course, university, and loan requirements. Based on your profile, GyanDhan will suggest the best loan options from BOB and SBI.

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  Speak with a GyanDhan loan counselor to understand the loan terms, interest rates, and repayment plans for both banks and get personalized guidance on which bank best suits your financial needs.

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  Upload all required documents (admission letter, ID proof, academic records, etc.) directly to GyanDhan’s portal, and we will verify your documents and help you with any missing paperwork.

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  We coordinate with the bank on your behalf to process your loan application and ensure faster loan approvals for you.

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  Once your loan is approved, the bank will issue a sanction letter, confirming the loan amount and terms 

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  After completing the formalities, the loan amount is disbursed as per your university's fee schedule.

Repayment Terms for BOB and SBI Education Loans

Once the loan is disbursed, you start planning the repayment of your education loan. However, both SBI and BOB offer similar repayment terms. Below are some of the repayment terms that will help you plan your repayment schedule. 

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  Maximum Repayment Period: Both SBI and BOB offer a repayment period of up to 15 years.

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  Moratorium Period: SBI offers you a moratorium period of the course length plus 6 months, whereas BOB offers a moratorium period of the course period plus 12 months.

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  No Prepayment Charges: If you are willing to prepay your loan, neither SBI nor BOB charges prepayment penalties.

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  Flexible Repayment Options: Both banks may offer you a customized EMI plan depending on your profile.

So considering a situation in which you need an abroad education loan and your university is on the premiere list of BOB then you can go for a secured education loan with BOB but in case you have plans to be enrolled in a university that is not on the list of premier institutions of BOB then going for SBI would be a wise choice because in here you would only have to arrange 10% as margin whereas it can go up to 15% for BOB.

Both these public sector banks are quite similar in terms of their abroad education loan offerings. But the overall choice between them depends on your requirements as a user. Now that you know several differences between BOB and SBI, you can confidently start your abroad education journey by comparing them on different aspects and analyzing which one aligns more with your requirements. If you still can not decide which is better for you and feel like this is a lot of work for you, then don’t worry, let GyanDhan help you. All you have to do is check your eligibility with us.

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