With the increasing cost of higher education, more and more students are now considering studying overseas, and to cover the expenses for the same, the majority of students apply for an overseas education loan. Not only does an education loan help students in paying for their tuition fees but if chosen wisely an education loan also helps with other things like tax benefits and in building a good credit score. The overseas education loan market is flooded however there are certain financial institutions that offer an education loan at a cheaper rate of interest. In this blog post, we are going to throw light upon the financial institutions offering an overseas education loan at a cheaper rate of interest. So, without any further ado, let’s get straight into it!
Cheapest Education Loan in India
Education Loan that is offered by Public Sector Banks like BOB & SBI is anytime cheaper than those offered by the Private Sector Banks like Axis Bank and the ICICI Bank. There are the two main reasons for the same that are as follows:
Rate of Interest: The rate of interest for an overseas education loan that is offered by the public sector bank is less as compared to the private banks. The average bracket for ROI falls in the bracket of 1% to 2.5% for public banks whereas when it comes to the private banks it falls in the bracket of 8.5% to 10.5%.
Processing Fee: The processing fee that is charged by public sector banks is lower than that of NBFCs and sometimes even lower than that of the private banks. The majority of the public sector banks have zero or a low processing fee. When it comes to certain banks like SBI or BOB they have a fixed fee of INR 10,000 whereas, in the case of NBFCs, it falls in the cost bracket of 40,000 to 80,000 for the same loan amount.
Now that it’s evident, an overseas education loan from public sector banks is the cheapest ones, let us understand the overseas education loan schemes that are offered at the cheapest rate of interest.
Bank of Baroda: Bank of Baroda is one such financial institution that offers the cheapest loan schemes. In the case of premier institutions, the Bank of Baroda offers the cheapest education loan institutions where the rate of interest will be 8.25% whereas in the case of non-premier institutions, then it will be around 8.9%.
SBI education loan schemes: State Bank of India is another public institution that offers an overseas education loan at the lowest rate of interest. Indian students are also eligible to apply for the student loan schemes like SBI Rinn Raksha Policy, Global Ed-vantage Education Loan, and Student Loan Scheme that is offered by the financial institution. In the case of the girl students, SBI offers a further concession of 5% of the rate of interest.