In 2024, the education loan market in India is continuing to evolve and grow rapidly.
This chart explains why. After the slump in 2021 (due to COVID-19 induced lockdown), the number of Indian students going abroad for their education has soared massively.
Why does this matter? Well, for starters, this partly explains why so many new players are entering the market of study abroad student loans in India.
No wonder the contenders for top education loan providers in India in 2024 are increasing, and the competition is becoming fiercer.
An Overview of the Education Loan Landscape in India in 2024
India offers countless options for prospective students. Here’s an overview.
- India’s banking sector is vast. Students have compelling products from 12 public and 21 private banks.
- Public banks like Bank of Baroda, Bank of India, and Canara Bank have been the backbone for many students dreaming of studying abroad.
- On the other side, private banks such as Axis Bank and City Union Bank also offer competitive loan options.
- India also has 12 Small finance banks, like Au Small Finance Bank, and 43 Regional Rural Banks (RRBs), including Kerala Gramin Bank and Uttarakhand Gramin Bank. Many of these banks offer study abroad loans.
- Students can also get great offers from Non-Banking Financial Companies (NBFCs). There are over 9,500 NBFCs registered with the Reserve Bank of India (as of 2022). So, it’s obvious that many students feel that options for securing an education loan seem endless (which can make the loan search process very confusing).
- International lenders like Prodigy Finance and Mpower Finance offer tailored loan solutions. For many students, loans from these international lenders can even outdo the offers from domestic banks.
There you have it – the loan landscape in India for students who wish to study abroad. The problem is of overabundance, and not shortage. To search through so many products from so many providers is impractical.
This article will bring clarity to the chaos. Let’s continue.
What is an Education loan?
Let’s clarify what an education loan is. Simply put, an education loan provides financial support to students who wish to pursue higher education.
So, what expenses will your education loan cover? It covers expenses like tuition fees, books, accommodation, and sometimes even travel.
However, all loans aren’t the same. Our focus isn’t on just any education loan. We’re zooming in on loans that can help you fund your education for the minimal cost.
Given our focus, the search for the right education loan providers narrows down significantly.
In the following sections, we will explore the top banks providing education loans in India, including both public and private banks, NBFCs, and international lenders.
Top Education Loan Providers in India in 2024
The “best” education loan provider in India isn’t a standard answer. It depends on what you want the most from your education loan. Different education loan providers have different products that target different need brackets.
- Some lenders win by sheer volume of loans given out. This doesn’t always mean they’re the best fit for you.
- A lender approving tons of applications might not be the one with the most competitive interest rates.
- The best lender is the one offering low interest rates and flexible repayment terms that work with your budget.
So, it’s clear that we need a balanced view of top education loan providers in India. Here are the options.
| Bank/NBFC | Interest Rate Range | Loan Amount Range |
| State Bank of India | 8.30% to 11.50% | Up to INR 1.5 Crore |
| Punjab National Bank | 8.55% to 11.25% | Up to INR 1 Crore |
| Bank of Baroda | 9.10% to 12.45% | Up to INR 80 Lakhs |
| ICICI Bank | 9.50% onwards | Up to INR 2 Crore |
| Bank of India | 8.25% to 11.60% | Up to INR 1 Crore |
| Bank of Maharashtra | 9.20% to 11.05% | Up to INR 20 Lakhs |
| Central Bank of India | 8.30% to 11.25% | Up to INR 50 Lakhs |
| Axis Bank | 13.70% to 15.20% | Up to INR 40 Lakhs |
| Kotak Mahindra Bank | Up to 16.00% | Varies |
| Canara Bank | 7.30% to 9.30% | Up to INR 40 Lakhs |
| Mpower Finance | Starts from 8.00% | Up to $100,000 |
| Prodigy Finance | Variable | Up to 100% of tuition fees |
Major Banks & NBFCs Offering Education Loan to Study Abroad:
- Bank of India Education Loan
- HDFC Credila Education Loan
- Union Bank of India Education Loan
- ICICI Bank Education Loan
- Yes Bank Education Loan
- IDFC Bank Education Loan
- PNB Education Loan
How to compare the best education loans provided by different banks and NBFCs?
To compare top student loans from India’s top education loan providers, several important criteria come into play. Let’s understand them.
Key Comparison Criteria For Top Education Loan Providers in India in 2024
- Secured vs. Unsecured Loans: A secured loan requires collateral, like property or investments. An unsecured loan doesn’t. The choice affects interest rates and loan amounts.
- Interest Rates: This is crucial as it determines your repayment amount. Lower rates mean lower repayments.
- Repayment Terms: Look at how long you have to repay the loan and when repayment starts. Some loans offer a grace period until after graduation.
- Processing Fees: These upfront costs can add up. Some lenders waive these fees for certain loan amounts or courses. International lenders usually charge higher processing fees compared to India lenders.
- Loan Amount: Ensure the loan covers your needs, including tuition, living expenses, and travel.
Other important factors to consider include:
- Currency fluctuations if the loan is in foreign currency
- Prepayment penalties
- Availability of moratorium period
- Customer service and support
- Loan disbursal time
Ask Yourself These Questions While Comparing
When comparing education loan providers in India, it helps to question yourself till you have the right answer. These questions will help:
- Will I be able to provide collateral for a secured loan?
- What interest rate am I comfortable with?
- Which banks provide education loans easily?
- Am I okay with paying processing fees, or should I look for a provider that doesn’t charge any?
- Does the loan amount cover all my study abroad expenses?
When you have clear answers to the above, you can focus on the factors that matter most to you.
Limitations in comparing top education loan providers in India in 2024
In your hunt for the perfect education loan, you might face some roadblocks. It’s not as straightforward as it seems.
- Students often have limited time to explore options, making it challenging to visit multiple bank branches.
- You’re likely to stick to banks within your reach, limiting your choices to nearby locations.
- It’s natural to lean towards banks you know, which might cause you to miss out on better deals from lesser-known education loan providers.
These barriers can lead to you compromising on the best education loan. The worst part is that many students don’t even realise that there might be a better option available.
Compare top education loan providers on FundRight
Enter FundRight. It’s the world’s first platform where banks compete for your loan. We built FindRight to simplify the comparison of education loan providers in India. Here’s how it works:
- Register and create your profile on FundRight. Your details remain anonymous, and India’s top 15 lenders compete to give you their best offers.
- Expect to receive compelling student loan offers within just one day.
- Lenders strive to outdo each other, improving their terms to win you over, which means even better offers for you.
- A FundRight expert is there to help you negotiate even lower interest rates with banks.
- From shortlisting offers to submitting documents and getting approval, everything happens online, without you needing to step out of your home.
FundRight opens up a world where securing the best loan for your international studies becomes easier.
Stop overpaying for your education. Save up to 23 lakhs with FundRight. Check your offers.
FAQs
Tata Capital is a strong recent entrant in the education loan space, offering competitive rates and flexible terms for students going overseas.
Each education loan provider has its own criteria regarding grades, co-borrower requirements, and eligible courses. Check with the lender directly.
Yes, many lenders offer unsecured education loans, although they may have higher interest rates than secured loans.
Look at repayment periods, processing fees, prepayment penalties, and customer service reputation of the education loan provider.
