Government Banks For Student Loan Consolidation: Check the List Here!

Government Banks For Student Loan Consolidation

Government Banks For Student Loan Consolidation: A lot of students prefer to take an education loan to study abroad as it covers a wide range of expenses including travel expenses and examination fees. A student may end up taking multiple loans from different lenders. In such a scenario, it becomes difficult to manage different payment periods, interest rates, and terms and conditions. Here comes the role of student loan consolidation!

Student loan consolidation helps simplify the repayment process and may also provide other favourable conditions like improved interest rates. In this blog, we are going to look at various public sector banks providing personal loans for debt consolidation. Before moving forward, let’s first understand the meaning of student loan consolidation.

What is the Meaning of Student Loan Consolidation?

Student loan consolidation is a process by which you can consolidate your different debts into a single one through a personal loan. The ability to consolidate different loans into one is one of the most important features of personal loans. By having a single loan you are only required to pay a single EMI and a single rate of interest. This helps in even reducing the total cost as many banks provide lower interest rates for debt consolidation. It is a convenient way of managing your monthly budget without breaking the bank.

Government Banks Providing Student Loan Consolidation

There are different public and private banks that provide personal loan schemes for debt consolidation. By taking a loan consolidation scheme from a public sector bank you can easily pay back your loan with favorable terms like low interest rates and zero prepayment charges. Let’s look at the different public sector banks providing debt consolidation options.

State Bank of India Personal Loan for Debt Consolidation

State Bank of India (SBI) provides consolidation loans that help customers consolidate all their loans into one and pay off all of their debt in a simple manner. SBI Bank provides different personal loan schemes with different interest rates. Here’s the list of the same:

Name of the Loan SchemeEligibilityEffective Interest Rate
Xpress Credit Personal LoanFor people working in the corporate sector12.05% – 14.05%
Xpress Elite SchemeSalary account with SBI or with another bankSalary account with SBI: 11.05% – 11.55%
Salary account with another bank: 11.30% – 11.80%
Xpress Lite SchemeSame as Xpress Credit1% higher than the Xpress Credit Scheme for all brackets
SBI Quick Personal Loan Scheme through CLP PortalFor customers not maintaining salary accounts with SBI0.25% higher than Xpress Credit Scheme for all brackets

Punjab National Bank Personal Loan For Debt Consolidation

The Punjab National Bank provides a personal loan for debt consolidation up to 24 times of gross monthly salary with a maximum of INR 20 Lakhs depending upon the repaying capacity. Let’s look at the different features of this loan scheme:

EligibilitySecurityRate of InterestPrepayment chargesMargin
Drawing salary from PNB Bank.A suitable third-party guarantee is acceptable to the bank8.90% – 14.45%NILNIL

Bank of Baroda Personal Loan For Debt Consolidation

Bank of Baroda offers hassle-free quick personal loans to individuals for debt consolidation and other requirements. The bank also offers online pre-approved loans easily and conveniently. The different features of a personal loan from Bank of Baroda are:

EligibilityRate of InterestLoan amount
Minimum age – 21 years.Starting at 10.10% p.a. on a daily reducing basisUp to INR 20 Lakhs

Some other features are:

  • Applicants can be employees of government bodies or private companies with a minimum continuous service of one year.
  • Self-employed professionals or business persons need to have their business or practice for at least one year.
  • Co-applicants are not allowed. 
  • There are zero processing charges for government employees who maintain a salary account with the Bank of Baroda.
  • For others, the processing charges range from 1.00% of the loan amount to 2.00% plus GST, subject to:
    Mini. Rs.1,000 + GST
    Max. Rs.10,000 + GST
  • Both floating and fixed rate of interest options are available in Baroda Personal Loan.

Are you also interested in understanding the fundamental differences between education loan consolidation and education loan refinancing? If yes, then you must read:

Education Loan Refinancing Vs. Loan Consolidation: Choose the Better Option

Bank of India Personal Loan For Debt Consolidation

Bank of India provides the ‘Star Personal Loan’ Scheme that has an easy documentation process. Some of the features of this scheme are:

  • A 0.50% concession is available for women beneficiaries.
  • Maximum quantum up to 36 times the gross monthly salary.
  • Maximum repayment tenure of up to 84 months.
  • Quick disposal of the loan i.e., very less turnaround time.
  • Low interest rate starting from 9.10% p.a.
  • No prepayment penalty.

You may also be interested in knowing more about the best student consolidation banks. For this also read our blog on:

Best Student Loan Consolidation Banks: Know How to Choose

Benefits of Opting For Student Loan Consolidation From Government Banks

There are a plethora of benefits available with a loan consolidation from a public sector bank:

  • Prepayment charges or penalties are not levied by public sector banks.
  • The rate of interest offered by public sector banks is often lower than those of private sector banks.
  • Public sector banks often provide grace periods for repayment, while private banks often charge a partial or full interest rate during this period.

FAQs

What is a debt consolidation loan?

A debt consolidation loan is a single personal loan that combines all of your existing loans. This makes your loan repayment option easier as you have to pay only a single EMI and a single interest rate.

Will I be able to pay off my debts faster with a debt consolidation loan?

Yes, consolidation helps in making monthly payments much more convenient. Since you will be paying for one single loan, your chances of missing a payment will be reduced. Also, lower interest rates from debt consolidation may reduce the total cost of the loan which will help you better prepare your monthly budget.

Is a debt consolidation a secured or unsecured loan?

It can be both and depends upon which one you choose to opt for. For a secured loan, you need to provide collateral which isn’t the case in case of an unsecured loan.

This blog was all about student loan consolidation schemes offered by different public sector banks. To know more about student loan consolidation, the best bank accounts for students, forex and banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.

Related Blogs
Streamlining Your Debt: Pros and Cons of Student Loan Consolidation That You Need to Know
Debunking Myths About Student Loan Consolidation
How To Customise Top-Up Education Loan As Per Your Needs

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