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It is not commonly known that your education loan rate of interest can change depending on various factors - floating rate plus Spread value. In this article, learn all the details here so that you can save money.
Yes! You have made it to your acceptance mail and you are probably in the seventh heaven. All that huge amount of ordeal is finally worth it. A fluffy think cloud pops up on your brain where you’re flying on a plane, landing in your dreamland, befriending a multicultural group of people and ending up with a 5 or 6 digit salary in the US. But wait – there are things that are yet to be lined up before you can begin your journey, and these things include your not-so-cheap tuition fee that might leave you in a bundle of nerves. Unless you have paternal ties with Lil Wayne or Bill Gates, you can’t help but apply for an educational loan.
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Almost 8 out of 10 applicants who opt for an educational loan are unaware of the complexity around the rate of interest, and how it may change post sanction. Not to worry as it ain’t astro-physics that would take a millennium to get through. Here’s all you need to know about your education loan’s rate of interest:
In the case of non-bank financial companies (NBFCs, Avanse, Credila, etc), the Index is not controlled by RBI. They are free to increase or decrease their Index as per their profitability needs! This is a risk that you, as a borrower, should be aware of.
Nationalized banks should be the ideal choice of every student who is looking for an education loan for abroad studies. The rate of interest offered by these lenders is one of the lowest in the market with many student-friendly terms and conditions. The rate of interest offered by SBI under its Global Ed-Vantage scheme is 8.55% for women and 9.05% for men. Similarly, Bank of Baroda offers 8.0% for women and 8.5% for men.
Apart from the low-interest rate, these banks offer secured education loans, which have benefits such as a longer moratorium period. Another key benefit of choosing SBI is that its rate of interest is fixed for the duration of the loan. This helps students plan their finances and predict their future payments.
In the case of no collateral, the next best option is to apply for an unsecured education loan from Axis Bank or ICICI. Along with a longer loan tenure and quick processing time, Axis Bank has a refundable processing fee for a loan amount up to INR 20 lakhs. For a loan amount beyond INR 20 lakhs, the bank charges a very affordable fee of INR 750 per lakh along with GST. That is, for a loan amount of INR 40 lakhs, a student will have to shell out 750*(40-20) + GST = 15,000 + GST.
Students won’t have to pay a penny more as GyanDhan’s loan application services are absolutely free of cost.
We, at GyanDhan, work in alliance with the Indian banks, who strictly adhere to the policies of RBI. Therefore, using our services will ensure that there aren’t any such unpleasant surprises as far as your interest rate is concerned.
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Also, if you are planning to take an education loan via SBI, then we have launched a new service of door pickup of documents (at zero cost) which will reduce your time and effort substantially.
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