More and more college students are taking education loans to pursue their goals. As the cost of higher education is increasing, the demand for such loans is increasing too. Choosing the perfect college for graduation is hard and so is the selection of bank to avail the student education loan.
With so many options in the market including both government and private banks plus the NBFCs, making the right choice gets a bit tedious. Many banking institutions offer attractive Education Loan Schemes for India and Abroad comprising various benefits and offers. So which one to choose?
While Private Banks provide top-notch fast services like ICICI Bank Education Loan, Government Banks offer education loans at very low interest rates like PNB Education Loan schemes. Some other major factors which need to be researched before finalising your banks are:
Loan Eligibility Criteria
Nature of the Transaction Process
We are listing here some of the major differences between the Private Banks and Government Banks to assist you in choosing the best one. Your perfect bank must suit your needs and simplify the education loan disbursal process for you.
|Type of Bank||Private Banks||Government Banks|
|Examples||ICICI, HDFC, Axis, etc.||SBI, PNB, CBI, etc.|
|Loan Amount||INR 50 Lakh: Indian Students INR 1 Crore: International Students||INR 10 Lakh: Indian Students INR 20 Lakh: International Students|
|Processing Charges||Most of the banks charge a processing fee of around 1%.|
Varies from institute to institute.
For SBI: Up to INR 4 Lakh: Nil
Above INR 4 Lakh: INR 5,000
Higher interest rates.
Eg: ICICI- 11.5%
Cheaper interest rates.
Eg: SBI- 10.45%
|Paperwork Procedure and Turnaround Time.|
|Concession||Most Banks offer a concession of 0.5% to girls students and SC/ST students.||0.5-1% concession to girl students.|
No charges on Branch transactions
No pre-payment penalty amount
Less processing fee
Top 5 Public Sector Banks in India:-
SBI and PNB are the more popular names, though other banks also have very attractive and beneficial schemes that you can avail. Banks like SBI have innumerable branches all over the country which makes the delivery of services effective.
Hassle free documentation process
Better concession rates
Good customer care
Top 5 Private Sector Banks in India:-
HDFC and ICICI banks furnish excellent services and charge no processing fee or any pre-payment penalty.
So, before you finalise your bank to avail education loan, make sure you have analyzed all the pros and cons. Both the Private Baks and Government Banks have their own perks and drawbacks. So, choose the one which suits your needs the best.