Top Public Sector Banks in India Providing Education Loans: Features, Benefits

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Public sector banks in India understand that lack of funds restricts aspiring students to pursue higher education domestically as well as abroad. Thus, to provide them with the desired funds, public sector banks provide collateral-free education loans of up to INR 7.5 lakhs and secured education loans vary in terms of maximum finance offered, interest rates, moratorium period, processing fees, and other factors. 

In this blog, we will take you through the benefits of education loans from government banks and the list of public sector banks in India providing education loans to help you compare them to the above-discussed factors. 

List of Public Sector Banks Providing Education Loans

Now that we know about benefits of taking education loans from public banks, let’s find about the best banks that offer education loans to study in India and Abroad. Some of the top banks are SBI, Axis Bank, Bank of Baroda, Canara Bank, Punjab National Bank, and IDBI Bank. 

State Bank of India

State Bank of India is one the top public banks providing education loans students to like skill loans, scholar loans, higher education loans in India and abroad. It offers various loan schemes like the SBI Student Loan Scheme and SBI Ed-vantage Scheme along with various interest subsidy schemes like CSIS Scheme and Dr. Ambedkar Interest Subsidy Scheme for overseas education. The SBI Loan disbursement process is also very simple, smooth and hassle-free. The table below shows details of education loan from SBI Bank- 

ParticularsDetails
Quantum of FinanceFor abroad – Upto INR 1.5 crore
Interest RateFor abroad – 8.8% (Men); 8.3% (Women)
Processing FeesINR 10,000 + taxes on loans above 20 lakhs
Loan Tenure15 years 
Moratorium Period Course period + 6 months
Margin Money10%

Bank of Baroda

Bank of Baroda offer instant education loans to students to study in India and abroad. It offers services like Digital education loans, skill loan scheme, BOB forex cards and many others. The loans can also be applied through a government portal – Vidya Lakshmi Education Loan Bank of Baroda aside from visiting the bank branch or applying online. 

Quantum of FinanceFor abroad – Upto INR 80 lakhs
Interest RateFor abroad – 7.75% (Men); 8.25% (Women)
Processing FeesINR 10,000 + GST
Loan Tenure15 years 
Moratorium Period Course period + 6 months
Margin MoneyAbove INR 4 lakhs – 10%

Canara Bank 

Aspiring students can get Canara Bank Education Loan, which is a well-known public-sector bank offering good services to its customers. It can also be applied through Vidya Lakshmi Portal. Bank doesn’t require collateral for education loans up to INR 7.5 lakhs. The Canara Bank Loan Disbursement Process is seamlessly integrated and loans are also processed quickly. 

Quantum of FinanceUpto INR 40 lakhs
Interest Rate7-10% 
Processing FeesNIL
Loan Tenure15 years 
Moratorium Period Course duration
Margin Money5-15% above INR 4 lakhs for study abroad

Bank of India

Bank of India Education Loan interest rates are low, affordable and competitive which makes it a great choice to secure education loans. There are no hidden charges that helps in trouble free loan closure with minimal documentation work. Students can apply for loan by visiting the nearest BOI branch or online and be relaxed as the BOI Education Loan Disbursement Process is hassle free. 

Quantum of FinanceFor abroad – INR 150 lakhs
Interest Rate8.85% – 9.85%Up to 7.5 lakhs- 1 year RBLR + 1.70%
Above 7.5 lakhs- 1 year RBLR + 2.50%
Processing FeesFor abroad – INR 5000
Loan Tenure15 years 
Moratorium Period Course Duration
Margin Money10- 15%

Central Bank of India 

Central Bank of India is another public sector bank providing education loans for India and abroad. These are offered for a wide range of courses from engineering and medicine to maths and science. Eligible students who have secured admission through entrance exams or merit submitted all the valid documents and signed the loan sanction letter can benefit from the quick Central Bank of India Loan Disburemsent process

Quantum of Finance20 lakh for studies abroad
Interest Rate8.10- 10.6%
Processing FeesLoans upto INR 10 lakhs – INR 500Loan above INR 10 lakhs – INR 1000
Loan Tenure15 years 
Moratorium Period Course duration 
Margin Money10- 15%

Karur Vysya Bank 

KVB is one of the banks that provides seamless services and possible for you to achieve your educational goals. Karur Vysya Bank education loans have zero processing fees and the bank transfers the loan amount to the university’s account where you have secured admission. With no margin money up to INR 4 lakhs and a repayment period of 15 years, the bank provides education loans to study in India as well as abroad. 

Quantum of FinanceFor abroad – INR 150 lakhs
Interest Rate12.05% to 14.55%
Processing FeesNIL
Loan Tenure15 years 
Moratorium Period Course duration
Margin MoneyNIL up to 4 lakhs
5% upto 7.50 lakhs
15% above 7.50 lakhs

Indian Overseas Bank 

India Overseas Bank is another public sector bank in India providing education loans under various schemes and facilitating students to pursue higher education. Regular full-time degree courses and full-time management courses are considered eligible courses under the education loan scheme.

Quantum of FinanceFor abroad studies – INR 40 lakhs
Interest Rate10.05%
Processing FeesNIL
Loan Tenure10- 15 years 
Moratorium Period Course duration
Margin Money5-15% 

Punjab National Bank

Punjab National Bank provides education loans to study in India under its ‘PNB Saraswati’ and abroad under ‘PNB Udaan’ schemes. You can also easily get an education loan through the Vidya Lakshmi Portal Punjab National Bank. Aspiring students must fulfil eligibility criteria as stated by the bank and apply for desired courses and universities. 

Quantum of FinanceNeed-based finance subject to margin as per guidelines
Interest Rate11.50% to 12.75% for men
11 % to 12.25% for women
Processing FeesFor abroad studies- 1% Minimum Rs.10000/- (Refundable after 1st Disbursement)
Loan Tenure15 years 
Moratorium Period Course duration
Margin MoneyNIL up to 4 lakhs
5% upto 7.50 lakhs
15% above 7.50lakhs

Bank of Maharashtra

Bank of Maharashtra education loan is another one in the list of public sector banks in India providing education loans. Students pursuing technical, professional, bachelor’s, master’s, and doctoral courses can apply for the same. The loans are provided at interest rates starting from 9.45%. The Bank of Maharashtra education loan disbursement process is simple and online.   

Quantum of FinanceNeed-based financing
Interest Rate9.45%
Processing Fees0.50% of the loan amount for studies abroad (the amount is refundable incase borrower takes up the course)
Loan Tenure15 years 
Moratorium Period Course Duration
Margin MoneyNIL up to 4 lakhs
15% above 4 lakhs for study abroad

Indian Bank 

Indian Bank is a public sector bank in India providing multiple services including education loans. The CIBIL score of the applicant should range between 65-0700 to avail funds from the bank. Indian Bank education loan interest rates are also affordable starting from 8.80% to 11.40% with flexible repayment options. Indian Bank education loan disbursement process is also quick and students can expect to get it done soon after receiving the acceptance letter and visa approval.

Quantum of FinanceNeed-based finance which is subject to margin as per guidelines
Interest Rate8.80% to 11.40%
Processing FeesUpto ₹10 lakhs:   Nil
Above ₹10 lakhs: 0.15% (max. ₹3000.00)
Loan Tenure10- 15 years 
Moratorium Period Course Duration
Margin Money5-15% 

Benefits of Education Loans from Public Sector Banks

Deciding to choose the right lender among public banks, private banks, and NBFCs can be challenging. Each lending institution offers a set of pros and cons. However, many public sector banks offer many advantages, making it a preferable choice to secure funds from them. Let’s briefly find out as to why many students prefer to take study abroad education loans from public sector banks- 

  • Public Banks offer education loans at competitive and lower interest rates. 
  • Unlike private banks, public banks do not charge partial or full interest during the moratorium period. 
  • Banks charge a processing fee to process and sanction your loans. The processing fee charges are lower in public banks. 
  • No prepayment charges are levied by public banks. 

FAQs 

Which are the best public sector banks in India providing education loans?

Some of the best public sector banks in India providing education loans are SBI, Canara Bank, Bank of India, Central Bank of India, Karur Vysya Bank, Indian Overseas Bank, PNB, Bank of Maharashtra, and Indian Bank.

Which public bank is best for education loans?

SBI is the best public sector bank providing education loans at interest rates starting from 8.30% for women. 

What is the rate of interest on education loans in government banks?

Interest rates on education loans in government banks are lower in comparison to private banks ranging from 8%-15% depending on the creditworthiness of the applicant and the course and university applied in. 

Can I get a 50 lakh education loan from public sector banks?

Absolutely. Banks like SBI. Karur Vysya Bank and Bank of India provide up to 1.5 crores of education loans to study abroad. 

Why public sector bank education loans are rejected?

Some of the reasons for public sector bank education loan rejection are due to incomplete applications, fake documents, low credit scores, and multiple loan enquiries.  

This was all about public sector bank education loans and the benefits of education loans from government banks 

To know more about education loans, 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.

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About Shubhika Garg

Hey there! I'm Shubhika- a proud graduate in English Literature and Language from Delhi University. My journey as a content writer transitioned from online teacher into the world of words. Stepping into the domain of blogs and articles, I discovered my passion for writing growing deeper and stronger. Having said that, I have experience of writing for diverse industries in automobile, technology, ed-tech, finance and mental-health; crafting details to help you find the solution to what you are looking for. Join me as I invite you all explore and learn together.

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