Cheapest Education Loan Options 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:

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• 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 fulfil this mandate, they offer low-interest education loans. Therefore, education loans from government banks are cheap.

• Subsidized interest rates

Government provides subsidies to public banks to lower the interest rates on education loans. 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 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. 

The process to apply for an abroad education loan should always start from exploring and comparing different lenders and their products. Borrowers win half the battle as GyanDhan evaluates your profile and selects the best lender 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: 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-gritties 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 for that particular case. 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 get help in your loan application and sanction too. 

If you are looking for an educational loan with low interest rates, then public banks like the State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank of India, and Punjab National Bank are the best options available.

No, there is no educational loan available in India with a 0% interest rate.

The maximum loan amount that can be availed for abroad studies varies from bank to bank. Usually students can secure up to INR 1.5 Cr. 

The current interest rate for abroad education loans varies from bank to bank but typically ranges from 8.5% to 11%. The interest rate is based on multiple factors such as the loan amount, repayment period, credit score of the borrower, the type of course or program, and various other factors.