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UBI vs SBI: Eligibility, Documents Required and More

UBI vs SBI: Eligibility, Documents Required and More

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Compare UBI vs. SBI education loans: interest rates, eligibility, benefits, and application processes to make an informed decision for your study abroad journey.

GyanDhan
Arshi Khan
Updated on:  05 Apr 2025 | 6.5K | 15  min read

In the Indian financial marketplace, public sector banks are often considered a reliable choice for obtaining a reasonably good loan. Union Bank of India (UBI) and State Bank of India (SBI) are two of the top options for education loans for students. While choosing the right bank for an education loan is important, students must consider factors like interest rates, loan amounts, collateral requirements, and repayment flexibility.

 

While both banks offer competitive loan schemes, SBI is known for higher unsecured loan limits, whereas UBI provides attractive terms for select institutions. To assist you in making an informed decision, we present a comparative guide between two prominent public sector banks that offer study abroad loans. 

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Key Comparison Of UBI Vs SBI Abroad Education Loans

Union Bank of India and State Bank of India are well-known institutions in the financial marketplace, particularly when it comes to finding abroad education loans from public sector banks in India. While both banks offer similar features, there are a few distinct factors that you should consider when deciding between these lenders. Below is a table that can provide you with an overview of the differences between UBI and SBI.

Basis of difference UBI SBI

Loan amount (unsecured)

Secured loan: Up to INR 1.5 crore

Unsecured loanUp to INR 40 Lakhs 

Secured loan: Up to INR 3 crores

Unsecured loan: Up to INR 50 Lakhs

Interest rate*

Secured loans:

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    For listed universities - 9.25%
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    For non-listed universities - 10.5%

Unsecured loans: 9.75%

Starting at 9.65%*

Moratorium period

Course + 12 months

Course + 6 months

Margin Money

0 - 15%

10%

Processing fees

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    Up to INR 40 Lakh - INR 10,000 + GST
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    Above INR 40 Lakh - INR 20,000 + GST

10,000 INR + GST

Processing time

Up to 14 days

Up to 15 - 20 days

Unsecured loan eligibility

Only for masters program

N/A

Premiere institute list 

Have a list that can lead to fluctuation in interest rates

N/A

Loan Approval Basis GRE / GMAT? 

No

No

*Interest rate as of April 2024

 

Check loan eligibility for study abroad

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SBI Global Ed-Vantage Scheme Eligibility Criteria

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    The applicant must be an Indian citizen and at least 18 years old.
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    Applicable for graduate, postgraduate, and doctoral programs in various disciplines at internationally recognized universities.
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    Covers undergraduate, master’s, and PhD programs across diverse academic fields.
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    Available for study in major global education hubs, including the USA, UK, Canada, Australia, Europe, Singapore, Japan, Hong Kong, and New Zealand.
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    Supports courses offered by reputed institutions abroad that maintain high academic standards.
 

Click here to learn more about SBI Education Loans.

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Union Bank Special Education Loan Scheme Eligibility Criteria

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    The applicant must be an Indian citizen and at least 18 years old at the time of application.
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    Admission to a recognized university or institution for a degree or diploma program is required.
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    A strong academic record is necessary, along with meeting the bank’s minimum academic criteria.
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    Applicants must fulfill any prerequisite tests like the GRE, IELTS, or TOEFL if required.
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    A parent or legal guardian with a stable income and good credit history is mandatory as a co-applicant.
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    Covers universities in the USA, UK, Canada, Australia, Singapore, Japan, Hong Kong, New Zealand, and Europe (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Sweden, Switzerland, UK).
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    Supports graduate, postgraduate, diploma, certificate, and doctorate programs such as Bachelors, Masters, MCA, MBA, and MS.
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    Additional courses covered:
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      CIMA (London) and CPA (USA).
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      Aeronautical, pilot training, and shipping diploma or degree programs
     

Click here to learn more about UBI Education Loan.

 

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Documents Required for Union Bank of India vs. State Bank of India Education Loan

Both Union Bank of India and State Bank of India have specific requirements for documents, as applying for an education loan involves submitting a range of documents. Below are some of the documents that you must prepare beforehand.

 

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    Loan Application Form - A duly filled and signed application form provided by the bank.
 
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    Identity Proof - Any government-issued ID such as an aadhar card, passport, or PAN card.
 
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    Address Proof - Electricity bills/ aadhar card/ passport/ utility bills/ driving license.
 
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    Academic Records - Mark sheets and certificates for 10th, 12th, and Graduation/Post-graduation. 
 
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    Admission Letter - Admission letter from the university of enrollment.
 
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    Fee Structure - A detailed document from the institution outlining the total course fees.
 
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    Income Proof - Salary slips, income tax returns (ITR), or an income certificate are required to evaluate the repayment capability of the borrower.
 
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    Collateral Documents - Documents related to property ownership, valuation reports, or fixed deposits that are offered as collateral.
 
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    Passport Size Photographs - Recent photographs meeting the bank’s specifications.
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UBI vs SBI: Unsecured Loan Amount

When choosing between banks for an education loan, the loan quantum, or the loan amount offered, plays a crucial role and can significantly impact your decision. The loan quantum determines the maximum amount the bank is willing to lend, and it should align with your financing needs. Different courses and institutions may have varying tuition fees and living costs, so it's essential to evaluate whether the loan quantum offered by a bank can adequately cover your expenses.

 

The maximum amount that can be borrowed if you pledge collateral goes up to INR 1.5 crore in the case of UBI and INR 3 crores if you borrow from SBI. However, this is not the case with unsecured education loans. In the case of an unsecured education loan, SBI can provide you with up to INR 50 lakhs, while UBI can provide you with up to INR 40 lakhs.

 

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UBI vs SBI: Interest Rate

The interest rate refers to the percentage charged by a lender on the borrowed amount. It represents the cost of borrowing and is an essential factor to consider when selecting a bank for an education loan as a slight increase and decrease in interest rate can have a huge impact on borrowing costs. Both SBI and UBI have a floating interest rate but the major point of differentiation is between their starting point of interest rates. 

 

SBI has a reasonable interest rate starting from 9.65% for female candidates and 10.15% for male candidates. On the other hand, you can borrow money from UBI for your education loan at an interest rate that starts from only 9.25% for listed universities and 10.5% for non-listed universities. 

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UBI vs SBI: Moratorium Period

The moratorium period refers to a specified timeframe during which borrowers are not required to make principal or interest repayments. It provides financial flexibility to students, allowing them to focus on their studies without immediate repayment obligations. Different banks may offer varying moratorium periods, and selecting a bank with a longer moratorium period can provide more breathing space and financial relief. By carefully considering the moratorium period offered by different banks, students can choose a loan provider that aligns with their financial needs and provides the necessary support during their academic journey.

 

UBI provides a moratorium period that extends up to the duration of the course plus an additional 12 months. In contrast, SBI offers a moratorium period that extends only up to the duration of the course plus 6 months. Both banks may offer a free moratorium period, allowing borrowers to defer principal and interest repayments. However, in certain cases where the loan application is not good, borrowers may have to pay simple interest during the moratorium period. 

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UBI vs SBI: Processing Fees and Time

Processing fees and processing time are significant factors to consider when choosing between banks for an education loan. The processing fees are charges imposed by the bank for processing the loan application. Comparing the processing fees of different banks allows you to evaluate the additional costs associated with obtaining the loan. Moreover, the processing time refers to the duration it takes for the bank to review and approve the loan application. A shorter processing time means quicker access to funds, which can be crucial when dealing with admission deadlines or financial obligations. 

 

UBI stands out with a relatively shorter processing time of 7 - 10 days, allowing for quicker access to funds. Moreover, UBI charges a processing fee of INR 10,000 plus GST for loans up to INR 40 Lakh and INR 20,000 plus GST for loans above INR 40 Lakh. On the other hand, SBI has a longer processing time of 15 - 20 days and charges a processing fee of INR 10,000 plus GST. By opting for UBI, applicants can benefit from a faster loan application process, who need funds on an urgent basis. 

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Difference Between UBI And SBI Eligibility Criteria

When choosing between banks for an abroad education loan, eligibility criteria and the bank's approved university list are crucial factors to consider. Each bank may have specific eligibility requirements regarding the applicant's academic qualifications, admission to recognized universities, and co-borrower criteria. Ensuring that you meet the eligibility criteria of a particular bank is essential to increase the chances of loan approval.

 

Did you know? UBI is one of those public sector banks that accepts Gram Panchayat property as well for collateral while SBI does not accept the same. In a few cases, UBI can also accept agricultural land in alignment with state laws. 

 

After analyzing all the differences, it can be concluded that there is no one bank that is a clear winner in all the aspects mentioned above. There were some aspects in which SBI is better, then there are some factors in which we can say that UBI is a better choice. It all comes down to one's individual requirements.

 

In case you have collateral to pledge, but it is a Gram Panchayat Property, you can go for UBI education loans. On the contrary, if you want a secured education loan but your university is not approved by UBI, which leads to an increase in interest rate, then SBI can be a clear choice.

 

Now that you know several differences between UBI and SBI, you can confidently start your abroad education journey by comparing each of the aspects with your personal requirements and then evaluating which bank’s loan offering better aligns with you. You have to check all the things before applying for an education loan abroad. If you still can’t decide which is better for you and believe that evaluating the best bank in accordance with your requirements is too much 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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Frequently Asked Questions

Does SBI or UBI provide unsecured education loans?
 

Yes, SBI and UBI both provide unsecured education loans; the difference between them is their loan quantum. In the case of SBI, you can get up to INR 50 lakhs as an unsecured education loan, while in the case of UBI the loan quantum for an unsecured education loan can go up to INR 40 lakhs.

Is there any pre-payment penalty associated with either SBI or UBI education loan?
 

No, there is no pre-payment penalty that you would have to pay in case you decide to foreclose your loan. 

What are the processing fees charged by SBI and UBI Banks?
 

The processing fee that is charged by both SBI and UBI is INR 10,000 plus GST. In case of loans exceeding INR 40 lakhs, UBI charges a processing fee of INR 20,000 plus GST.

What are some collateral restrictions in the case of SBI?
 

In the case of SBI, the collateral property that you are pledging must not be either agricultural land or a Gram Panchayat Property.

Check Your Education Loan Eligibility


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