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Read GyanDhan’s comparative guide on SBI vs BOB abroad education loan to choose the right option for you. Compare the interest rates, loan amount, repayment terms & more.
Both these banks do not charge any prepayment penalties if you decided to foreclose your loaIn 2022, the number of Indian students pursuing education abroad reached a six-year peak, with over 770,000 students venturing overseas. This trend led to a 68% increase in the loans disbursed by public sector banks for the same year, resulting in approximately 7,500 crore INR being disbursed.
This makes it evident that public sector banks are the preferred choice when it comes to abroad education loans. If you're also planning to fulfill your dream of studying abroad soon, you may also be exploring education loan options in public sector banks as well. In this blog, we are going to compare two prominent public sector banks that is SBI and BOB so that you can make an informed decision.
State Bank of India (SBI) and Bank of Baroda (BOB) are 2 of the top three public sector banks in the study abroad domain for the financial year 2021-22. 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.
Basis of difference | SBI | BOB |
---|---|---|
Rate of interest |
Starts at 10.15% (girls) and 10.65 (boys)* |
Starts at 9.90% (girls) and 10.40% (boys)* |
Insurance |
Optional** (Rinn Raksha) |
Mandatory (Group credit Life Insurance) |
Course + 6 months |
Course + 12 months |
|
Processing fees |
10,000 INR (non-refundable) |
10,000 INR (refundable in case of premiere institute) |
10% in every case |
Nil (Premier institute) 10% - 15% (non-premiere institute) |
|
Loan Approval Basis GRE / GMAT? |
No |
No |
*Interest rate as on July 2023
**Students who opt for Rinn Raksha insurance are eligible for an additional 0.5% concession on the overall interest rate of their education loan
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 (SBI) and Bank of Baroda (BOB) 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.
Therefore If you are a female applicant with a strong academic record and an interest in purchasing insurance, SBI could be a preferred alternative. However, for male applicants, BOB may also be a wise choice.
Read More About: UBI vs SBI: Which is Better for Education Loans?
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 more extended 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.
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.
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. In case you want a secured loan as a male applicant and you do not have any problem in arranging margin money then you can go for an SBI education loan. While in case you are a female applicant that wants to save additional costs and has a university listed in BOB’'s premier institute list then of course BOB would be the best choice for you.
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’t 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 with us.
Read also:
Although both banks have various interest rate incentives but considering a non-incentive interest rate BOB has more reasonable interest rates starting at 9.90% and 10.40% for female and male applicants respectively.
Yes, both of them can provide you with unsecured education loans if your amount is up to 7.5 Lakhs INR. In case your loan amount is more than that then you would have to pledge collateral.
Yes, both these banks provide a concession in interest rate by 0.50% if you are a female applicant. Apart from it, there are a few more interest rate incentives that you can get with SBI but not with BOB like when you opt for Rinn Raksha insurance then you can get a 0.50% discount no matter your gender. The only condition for SBI abroad education loan is that the maximum discount that you can get cumulatively could not be greater than 1%.
No.
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