Lowest education loan interest rate for study abroad

Studying abroad is expensive. Even after bagging rewarding scholarships you might still have to spend at least 10-20 lakhs on your education abroad. 

 

In addition to this, having funds for your visa, accommodation and other utilities burden you with a large sum of money. 

 

Considering these essential aspects of studying abroad, anyone might be sceptical to study overseas.  

 

However, banks like the Central Bank of India, State Bank of India and Union Bank of India offer low-interest student loans to help you make your dreams come true. 

 

While these are some of the best  options for a student loan, read the blog to learn everything about low-interest student loans to study abroad. 

 

Table of Content

 

  1. Top Banks Offering Low-interest Bank Loans .
  2. Low Interest Education Loans – What Do They Cover? 
  3. Top Banks in India Offering Lowest Education Loan Interest Rates 
  4. Eligibility Requirements for Low Interest Education Loans
  5. Documents Required for Lowest Education Loan Interest Rate 
  6. Loan Insurance for Low Interest Student Loans
  7. How to Get Low Interest Education Loans in India?
  8. Education Loan Repayment Process of Low Interest Student Loans

Of course, not. Choose the lowest education loan interest rate to cater to your needs. This could save you lakhs. 

Here’s a summary of the best low-interest rate student loan offers from banks and NBFCs. 

 

Banks  Interest Rate Processing fee  Loan Amount 
Central Bank of India  Starts at 6.85% 1% of loan amount Upto ₹ 20 lakh
State Bank of India  Starts at 6.70% 10,000 per application  ₹7.50 lakh- ₹1.5 Crores
Union Bank of India  Starts at 6.80% NIL Upto 30 lakh
Punjab National Bank Starts at 8.00% 1% of loan amount Upto ₹ 60 lakh
Indian Bank  8.50% NIL ₹ 4 lakh +
Bank of Baroda Starts at 8.45% NIL ₹ 7.5 lakh +
HDFC 9.55%-14% 1% of loan amount + tax ₹ 20 lakhs

 

The interest rates listed in the table above are recent and may subject to change.

 

Suggestion: Apply for GradRight Scholarships 

Low Interest Education Loans – What Do They Cover? 

Low-interest education loans cover the costs of: 

  • Tuition fees
  • Living expenses
  • Travel expenses 
  • Insurance
  • Cost of books, equipment, instruments, and uniforms (if any)
  • Cost of laptop covered (if required for the course)
  • Deposit money 
  • Blocked amount (if required) 
  • Any other expenses with the required proof to complete your desired course.
Note: Beware of potential scammers running amok promising low education loan interest rates. Always get your loans from trustworthy banks/lenders only.

Before applying for a low-Interest education loan, know this

To opt for low-interest education loans learn about the types of interest rates to make a sound decision. 

  • Types of interest rates

 

Floating Interest Rate

 

The interest rate can decrease or increase during the loan tenure. It is highly dependent on market conditions. 

 

Fixed Interest Rate

 

This type of interest rate stays the same throughout the loan tenure. Loans with a fixed interest rate are a safer choice for students. 

 

 

Fixed Interest Rate
 

 

 

Suggested Read: Best practices to manage your education loan

  • Types of loans 

In addition to interest rates, you must know that loans with collateral or secured loans have lower interest rates.

 

On the contrary, with an unsecured loan, you will not require any safety collateral or asset to back up the loan. However, unsecured loans impose higher interest rates. 

 

Depending on the type, amount, course and country you will be studying in banks offer student loans at 8-10% interest. 

 

Low-interest education loans are usually offered in India by public banks with 8% interest. 

 

Now, let’s get to the lenders providing you with some of the lowest-interest student loans. 

Top Banks in India Offering Lowest Education Loan Interest Rates 

Helping students fulfil their dreams of studying abroad, leading Indian banks offer low-interest education loans. 

 

Students can benefit from these lowest-interest student loans and avail of additional benefits of taking a loan as well. For instance, maintaining a good credit score or saving on taxes. 

 

 

Top Banks in India Offering Lowest Education Loan Interest Rates

Source

 

 

Most low interest education loans have a repayment period of 15 years after graduation.

 

The banks offering low interest education loans are 

 

Banks  Interest Rate Processing fee  Loan Amount 
Central Bank of India  Starts at 6.85% 1% of loan amount Upto ₹ 20 lakh
State Bank of India  Starts at 6.70% 10,000 per application  ₹7.50 lakh- ₹1.5 Crores
Union Bank of India  Starts at 6.80% NIL Upto 30 lakh
Punjab National Bank Starts at 8.00% 1% of loan amount Upto ₹ 60 lakh
Indian Bank  8.50% NIL ₹ 4 lakh +
Bank of Baroda Starts at 8.45% NIL ₹ 7.5 lakh +
HDFC 9.55%-14% 1% of loan amount + tax ₹ 20 lakhs

 

The interest rates listed in the table above are recent and may subject to change.

 

Apart from bank loans, you also have the exciting option of FundRight to assist you with your funds in a seamless fashion. 

 

Top Banks in India Offering Lowest Education Loan Interest Rates

 

 

 

 

Moving further, note that, to take any low-interest loans to study abroad, you must fulfil the eligibility checklist. 

 

Tip: Calculate the Amount You Will Need to Study Abroad

Eligibility Requirements for Low Interest Education Loans

These requirements slightly vary from bank to bank. However, some of the basic requirements are listed below. 

 

  • One must be a resident of India.
  • The student’s age must be between 18 to 35; pursuing a graduate degree or postgraduate degree.
  • The student must have confirmed admission to an institute or university abroad. 
  • The student must have a co-applicant eligible for an education loan in India. 

 

Furthermore, students with excellent academic records and merit are bound to get lowest interest student loans approved quicker. 

Documents Required for Lowest Education Loan Interest Rate 

 

To get a low-interest education loan from the banks mentioned above, students have to submit scanned copies of the following documents to their respective banks. 

 

  • Admission or acceptance letter from the college or university
  • Two passport-size photographs 
  • Transcripts of 10th, 12th and degree certificates 
  • Permanent Account Number details (PAN)
  • Adhar Card
  • Passport 
  • Voter ID Card 
  • Bank passbook
  • Salary slips of the co-applicant
  • Income tax returns for the last two years of the co-applicant
  • Insurance 
  • Bank statements 
  • Collateral proof (if required)

 

Apart from your ID proofs, having insurance has become crucial to take a loan in the present.  

Loan Insurance for Low Interest Student Loans

Taking a loan insurance is now a mandatory requirement for students opting for a loan. 

 

Loan insurance helps the family of the loan bearer to repay the loan in case of an unfortunate accident. 

 

However, it is not mandatory for every loan applicant to have loan insurance. The requirement depends on the lender and the bank.  

It is usually recommended for student loans taken from a private bank without collateral. 

How to Get Low Interest Education Loans in India?

You can apply for low-interest education loans online or offline at the bank. 

 

Applying Online: To apply online, you will have to fill out an online application form taken from the website of your desired bank. With the form, you will have to submit the scanned copies of necessary documents on the portal, online.

 

Applying Offline: To apply for a low-interest education loan offline, students can visit the nearest branch of their desired bank and fill out a hard copy of the application form. The documents should be submitted along with the form to the bank representative. 

 

After you have initiated your bank application, the bank executives reach out to you and process your loan accordingly. 

 

To get the lowest student interest loan, you can get in touch with a FundRight professional to assist you with your financial needs.

 

Now that we’ve looked at low-interest loans, eligibility and requirements; you can understand how the repayment of these loans works.

Education Loan Repayment Process of Low Interest Student Loans

Most education loans can be repaid within 15 years. 

 

With that said, most loan repayments start 12 months after the completion of your course or six months after finding employment.

 

Note that banks offer varied moratorium periods for the repayment of loans. The loan repayment can be paid in EMIs.

 

Some of the different modes of repayments available are

    • Internet banking
    • Cheque
    • Direct debit
    • Demand draft

These are some of the common and accessible options made available to applicants by the lenders/banks. 

However, the method of repayment is up to the agreement between the lender and the applicant. 

Therefore, students should thoroughly check the details of the loan and its repayment before signing off on the loan.   

With the lowest education loan interest rate, you are unstoppable and your dreams of achieving your goals do come true.

 

 

 

Not the service you deserve

 

 

 

If the only thing holding you back is the shortage of funds, education loans mentioned above are your ticket to the ideal university abroad. 

You can also talk to FundRight experts to guide you through your study abroad journey. 

So dear students, better late than never to sign up on that low-interest education loan deal and go explore the world.

Frequently Asked Questions:

 

Q1. Are there any education loans in India with zero interest?

Ans: There are no such education loans in India. However, the lowest education loan interest rates can be subsidized if you obtain some academic benefits.

Q2. Which bank offers the lowest education loan interest rate for students?

Ans: Currently, the State Bank of India offers several education loans at interest rates starting at 6.70% for students studying abroad.

Q3. Can low interest education loans be obtained without security?

Ans: For loan amounts up to 7.5 lakhs, you do not need to provide security or collateral. 

Q4. Can a student be eligible for a lowest interest student loan without a co-applicant?

Ans: Most education loans require a co-applicant or co-borrower for the purpose of connectivity and security when you are studying abroad.

Q5. What is the maximum amount of loan that can be acquired under the lowest education loan interest rate?

Ans: NRI students can obtain loans up to 30 lakhs for studies abroad. However,  the maximum amount of loans that can be obtained is decided by the bank based on the needs of the student. Currently, HDFC bank offers loans up to 1.5 crores for studies abroad.

Q6. Can student loans be paid off early?

Ans: The repayment period for student loans starts 12 months after the completion of the course. The loan can be paid off within a period of 15 – 20 years, depending on the bank/lender. However, if you wish to pay off your loan sooner, you can do that too.

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