UBI vs SBI: Eligibility, Documents Required and More

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

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. 

_x000D_ _x000D_ _x000D_ _x000D_

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.

_x000D_ _x000D_ _x000D_ _x000D_

*Interest rate as of April 2024

_x000D_ _x000D_

 

_x000D_ _x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  The applicant must be an Indian citizen and at least 18 years old.
  _x000D_
_x000D_
• _x000D_
  Applicable for graduate, postgraduate, and doctoral programs in various disciplines at internationally recognized universities.
  _x000D_
_x000D_
• _x000D_
  Covers undergraduate, master’s, and PhD programs across diverse academic fields.
  _x000D_
_x000D_
• _x000D_
  Available for study in major global education hubs, including the USA, UK, Canada, Australia, Europe, Singapore, Japan, Hong Kong, and New Zealand.
  _x000D_
_x000D_
• _x000D_
  Supports courses offered by reputed institutions abroad that maintain high academic standards.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

Click here to learn more about SBI Education Loans.

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  The applicant must be an Indian citizen and at least 18 years old at the time of application.
  _x000D_
_x000D_
• _x000D_
  Admission to a recognized university or institution for a degree or diploma program is required.
  _x000D_
_x000D_
• _x000D_
  A strong academic record is necessary, along with meeting the bank’s minimum academic criteria.
  _x000D_
_x000D_
• _x000D_
  Applicants must fulfill any prerequisite tests like the GRE, IELTS, or TOEFL if required.
  _x000D_
_x000D_
• _x000D_
  A parent or legal guardian with a stable income and good credit history is mandatory as a co-applicant.
  _x000D_
_x000D_
• _x000D_
  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).
  _x000D_
_x000D_
• _x000D_
  Supports graduate, postgraduate, diploma, certificate, and doctorate programs such as Bachelors, Masters, MCA, MBA, and MS.
  _x000D_
_x000D_

_x000D_ _x000D_

_x000D_
• _x000D_
  Additional courses covered:_x000D_

  _x000D_
  • _x000D_
    CIMA (London) and CPA (USA).
    _x000D_
  _x000D_
  • _x000D_
    Aeronautical, pilot training, and shipping diploma or degree programs
    _x000D_
  _x000D_

  _x000D_ _x000D_

   

  _x000D_
  _x000D_
_x000D_

_x000D_ _x000D_

Click here to learn more about UBI Education Loan.

_x000D_ _x000D_

 

_x000D_ _x000D_ _x000D_ _x000D_ _x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

_x000D_
• _x000D_
  Loan Application Form: A duly filled and signed application form provided by the bank.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Identity Proof: Any government-issued ID such as an aadhar card, passport, or PAN card.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Address Proof: Electricity bills/ aadhar card/ passport/ utility bills/ driving license.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Academic Records: Mark sheets and certificates for 10th, 12th, and Graduation/Post-graduation. 
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Admission Letter - Admission letter from the university of enrollment.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Fee Structure: A detailed document from the institution outlining the total course fees.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Income Proof: Salary slips, income tax returns (ITR), or an income certificate are required to evaluate the repayment capability of the borrower.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Collateral Documents: Documents related to property ownership, valuation reports, or fixed deposits that are offered as collateral.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

_x000D_
• _x000D_
  Passport Size Photographs: Recent photographs meeting the bank’s specifications.
  _x000D_
_x000D_

_x000D_ _x000D_ _x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

_x000D_ _x000D_ _x000D_ _x000D_

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. 

_x000D_ _x000D_

 

_x000D_ _x000D_

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. 

_x000D_ _x000D_ _x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

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. 

_x000D_ _x000D_ _x000D_ _x000D_

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. 

_x000D_ _x000D_

 

_x000D_ _x000D_

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. 

_x000D_ _x000D_ _x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_ _x000D_ _x000D_ _x000D_ _x000D_ _x000D_ _x000D_

_x000D_ 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.  _x000D_

_x000D_ _x000D_

 

_x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

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.

_x000D_ _x000D_

 

_x000D_ _x000D_

_x000D_ _x000D_ _x000D_ _x000D_ _x000D_