Many banks offer education loans for higher studies. Choosing the best bank for education loan is essential for a hassle-free repayment journey. To determine the right loan lender, one must compare factors such as interest rates, loan amounts, repayment terms, and eligibility criteria.
Some top banks for education loans to study abroad are PNB, SBI, HDFC, ICICI, Bank of Baroda, etc. They offer higher loan amounts at competitive rates and minimal documentation requirements. Check out the best bank for education loans to make an informed decision.
Table of contents
Best Bank for Education Loan
The best bank of education loans is the one that offers flexible loan terms and conditions. They are transparent about the interest rates, charges, repayment conditions, and collateral requirements.
Punjab National Bank, State Bank of India, ICICI, HDFC, and Bank of Baroda are some of the best lenders offering the best education loans. These loans come with competitive interest rates, flexible repayment plans, and swift approval processes. Let’s explore the best banks for education loans-
- State Bank of India- Best for Low Interest Rates
- ICICI Bank- Best for Higher Loan Amounts
- HDFC Bank- Best for Quick Approvals
- Punjab National Bank- Best for Low/ Minimal Fees
- Bank of Baroda- Best for Abroad Studies
State Bank of India
State Bank of India is the best bank for education loans offering competitive interest rates. The bank is also known for quicker loan processing and covering a wide range of education expenses. You can also claim tax benefits under Section 80E of the Income Tax Act.
Below mentioned are some reasons to apply for SBI education loans-
- You can apply for secured education loans up to INR 3 crores and collateral-free loans up to INR 50 lakhs for select/ premier universities.
- Interest rates start from 8.15% p.a.
- Special concessions are available for female students.
- Loan sanction/ disbursement before the i20/ visa is also offered.
- SBI RinN Raksha for education loan, a credit life policy improves the insurance coverage of the loan.
ICICI Bank
ICICI Bank is also the best bank for education loans. You can get instant collateral-free loans via the bank’s Internet Banking portal. Make sure to apply to one of the approved foreign universities for education loan hassle-free processing.
Here are some of the reasons that make it the best bank for education loans in 2025-
- The bank offers education loans up to INR 1 crore without pledging collateral. Secured loans are available up to INR 3 crores.
- Flexible collateral options for large loans.
- Government employees, CXOs, and professionals with 2 years of experience get additional benefits and offers.
- No margin money is required if you apply to premier institutions.
HDFC Bank
HDFC Bank is the best bank for education loans for quick approvals. The bank covers the entire costs of higher studies with no upper limit on the loan amount (secured loans). You can easily apply to a wide range of courses across different study levels (UG, PG, PhD, etc).
Some of the reasons mentioned below make it the best bank for education loans.
- Education loans can be used for over 2100 universities and 950 courses across 35+ countries.
- You can avail of collateral-free loans up to INR 45 lakhs.
- Fully online application process.
- Pre-approval letters even before confirmed admission.
- No prepayment charges are applicable.
Punjab National Bank
Punjab National Bank (PNB) is also one of the best banks for education loans You can apply for domestic and study abroad loans for a variety of courses, including popular ones like MCA, MBA, CPA courses in the USA, and CIMA in London.
Check out some of the reasons why PNB is the best bank for education loans in 2025-
- You can apply for need-based finance as per RBI guidelines for education loans.
- Interest rates range from 9.20% to 12.75% p.a based on the loan scheme & tenure.
- No processing fees on education loans for higher studies in India.
- No prepayment charges if you plan to prepay/ foreclose your loan early.
Bank of Baroda
Bank of Baroda is also the best bank for education loans for abroad studies. Besides an education loan of up to INR 1.5 crores, the bank offers flexible repayment tenure of up to 15 years. Female students get concessional interest rates.
Check out why it is the best bank for education loans for international students-
- Offers personalised Bank of Baroda Forex card that can be loaded in multiple currencies.
- Offers competitive currency exchange rates.
- Quick international funds transfer services with no hidden fees make it an ideal option for hassle-free foreign remittances.
These banks cover diverse student needs, from affordability and quick approvals to high loan amounts and international financial support.
Also, read this blog on financial literacy for students planning to study abroad. Check important skills and strategies to stay ahead.
Factors to Consider When Choosing the Best Bank for Education Loan
When selecting the best bank for education loans, students and their families must evaluate various factors to ensure they choose the most suitable option. Besides interest rates, loan amount, and collateral requirements, you must also consider banking support. Check out the list of important factors while choosing the best bank for education loans-
1. Interest Rates
The interest rate significantly impacts the total repayment amount. Lower interest rates reduce the financial burden in the long run.
When choosing the best bank, look for banks offering the lowest interest rates on education loans and special discounts for female students or merit-based.
2. Loan Coverage
A comprehensive loan coverage ensures all educational expenses are taken care of without additional financial stress.
When choosing the best bank for education loans, always look for lenders providing coverage for a wide range of expenses, including tuition fees, accommodation, insurance, etc. If you are planning to study abroad, check if the lender offers pre-visa disbursements.
3. Loan Tenure and Repayment Options
A longer tenure reduces monthly instalments but increases total interest, whereas flexible repayment options allow students to plan better.
The best bank for education loans will be one that offers flexible repayment tenure options (usually 5 to 15 years). Additionally, they must provide a grace period or moratorium period (typically the course duration plus 6–12 months).
4. Loan Amount
Different banks have varying upper limits on the loan amount, which may affect students applying to high-cost programs or universities.
Always look for the lender that offers the maximum loan amount with or without collateral when choosing the best bank for education loans.
5. Collateral and Security Requirements
Some loans require collateral for high amounts, which might not be feasible for all families. You must look for collateral-free loan options or sign a loan agreement with transparent terms on pledged assets.
6. Processing Time and Approval Speed
Students with strict admission or visa deadlines need quick approvals. In such cases, international students should apply to banks with streamlined online processes when choosing the best bank for education loans. Check if the lender offers pre-approval sanction letters for students applying to partnered institutions.
7. Hidden Fees
Additional fees like processing charges, prepayment penalties, or late payment fines can add to the loan cost. Always look for lenders offering low or zero processing fees and no penalties for early repayment.
8. Forex and International Banking Support
International students often need seamless fund transfers and competitive exchange rates,
Forex cards and wire transfer services. You might also need zero-margin currency exchange options.
9. Eligibility Criteria
Each bank has specific eligibility criteria that must be met for loan approval. When choosing the best bank for education loan, check for a lender with less stringent eligibility criteria for co-borrower requirements and income criteria.
Also, read this blog to understand the education loan process. From filling out the form to disbursement of funds, check the steps here.
10. Reputation and Customer Service
A bank’s reputation and support services impact the overall loan experience. You must also consider this factor before applying for an education loan. Look for reviews and testimonials from past customers. See if they offer dedicated support for education loan queries and emergencies.
This was all about choosing the best bank for education loans in 2025. By carefully evaluating these factors, you can select the bank that offers the most suitable education loan for your study abroad aspirations.
To learn more about education loans, the best bank accounts for students, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
FAQs
The best bank for an education loan depends on your needs. State Bank of India (SBI), ICICI, HDFC, PNB, and Bank of Baroda are some top options based on interest rates, loan amounts, and repayment terms.
State Bank of India (SBI) offers the lowest interest rates starting from 8.15% p.a. for education loans.
HDFC Bank is known for its quick loan approvals and easy online application process.
ICICI Bank offers education loans up to INR 1 crore without collateral and up to INR 3 crore with collateral.
Punjab National Bank (PNB) offers education loans with no processing fees for higher studies in India.
Bank of Baroda is ideal for studying abroad, offering loans up to INR 1.5 crore and forex card facilities.
HDFC Bank offers 100% coverage of education expenses, including tuition, living costs, and more, with no upper limit on loan amounts for secured loans.
To determine the best bank, compare interest rates, loan coverage, repayment options, processing time, and eligibility criteria based on your needs.
Yes, several banks like SBI and ICICI offer collateral-free loans for amounts up to INR 50 lakh, depending on the university.
Approval times vary, but banks like HDFC offer quick approvals, sometimes within a few days, especially for online applications.
Follow Us on Social Media
