Summary
- Up to 15 years after the end of the moratorium period (which begins after the end of the educational program, where the moratorium period depends on the loan type, and is generally between 6 and 12 months).
- If a second loan is taken for higher studies, the combined loan amount must be repaid within 15 years after completing the second course.
- In this guide, we will primarily focus on the Global Ed Vantage Education Loan from the State Bank of India.
The State Bank of India is a trusted banking institution that provides financial services to millions of customers across India. The bank can trace its roots back to 1806 and today it is the largest public sector bank.
The bank has always been a pioneer, sensitive to the needs of the population. In 1995, SBI introduced the first education loan product in India. At present, SBI offers a bouquet of education loans for students, both for studying in India and abroad. Their loan offers have competitive interest rates and very attractive terms.
In this article, we look at the different aspects of the application process, SBI education loan interest rates, documents to be submitted, and more.
Types of State Bank of India Education Loans
Whether you are studying in India or abroad, SBI provides an education loan to fit your needs. The bank offers educational loans for both professional and vocational courses.
These are the various SBI education loan schemes to help students achieve their educational goals:
- General Student Loan: This is the standard loan for higher studies within India or abroad.
- Scholar Loans: This loan product is specifically designed for students admitted to prestigious institutions like IITs, IIMs, and NITs.
- Global Ed Vantage Scheme: This loan product is tailored for students pursuing their higher studies abroad.
- Skill Loan: This loan product is aimed at financing skill development courses with a maximum loan amount of Rs. 1.5 lakhs.
- Dr. Ambedkar Interest Subsidy Scheme: This loan product offers interest subsidies to OBC and EBC students pursuing their studies abroad.
- Shaurya Education Loan: This is a niche loan scheme designed for defense personnel.
- Padho Pardesh Interest Subsidy Scheme: This loan provides interest subsidies to minority community students pursuing their studies abroad.
Besides, there is also the SBI Takeover of Education Loan Scheme. It allows you to transfer education loans from another bank to the State Bank of India.
In this guide, we will primarily focus on the Global Ed Vantage Education Loan from the State Bank of India.
The following features are common to all SBI education loans:
Repayment Period
Up to 15 years after the end of the moratorium period (which begins after the end of the educational program, where the moratorium period depends on the loan type, and is generally between 6 and 12 months).
Processing Charges
- For loans up to Rs. 20 lakhs: Nil
- For loans above Rs. 20 lakhs: ₹10,000 plus taxes
Security
- Loans up to ₹7.5 lakhs: Only a parent or guardian as a co-borrower. There is no collateral security or third-party guarantee required
- Loans above ₹7.5 lakhs: A parent or guardian as a co-borrower, along with tangible collateral security
Margin
- Loans up to ₹4 lakhs: Nil
- Loans above ₹4 lakhs: 5% for studies in India, 15% for studies abroad
Repayment Commencement
- Repayment starts one year after course completion
- If a second loan is taken for higher studies, the combined loan amount must be repaid within 15 years after completing the second course
EMI
The accrued interest during the course and moratorium period is added to the principal. The combined amount is repaid as Equated Monthly Installments.
Interest rates for State Bank of India Education Loans
SBI offers a range of education loans to cater to diverse student needs. The SBI Global Ed-Vantage loan is specifically designed for students pursuing higher studies abroad. It provides loan amounts ranging from Rs. 20 lakh to Rs. 1.5 crore at an interest rate of 11.15%. Additionally, students can benefit from a 0.50% concession if they avail of SBI RiNn Raksha or any other existing life insurance policy assigned in favor of SBI. Female students receive a further 0.50% concession, making the loan more affordable.
Here is an overview that compares all loan options from SBI, in terms of their lending limits and interest rates:
| Loan Scheme | Loan Limit | Interest Rate (Tentative) |
| SBI Global Ed-Vantage | Rs. 20 lakh to Rs. 1.5 crore | 11.15% |
| SBI Student Loan Scheme | Up to Rs. 50 lakh | 8.05% p.a. to 11.75% p.a. |
| SBI Scholar Loan Scheme | AA list: Rs. 50 lakh | AA list: IITs: 8.15% Other institutions: 8.20% |
| A list: Rs. 40 lakh | A list: IITs: 8.15% Other institutions: 8.65% | |
| B list: Rs. 30 lakh | B list: NITs: 8.65% Other institutions: 9.15% | |
| C list: Rs. 7.5 lakh to Rs. 30 lakh | C list: NITs: 8.65% Other institutions: 9.65% | |
| SBI Skill Loan Scheme | Up to Rs. 1.5 lakh | 10.65% |
| SBI Takeover of Education Loan Scheme | Above Rs. 10 lakh & up to Rs. 1.5 crore | 11.15% |
| SBI Shaurya Education Loan | Up to Rs. 7.50 lakh | 11.15% to 11.75% |
| Above Rs. 7.50 lakh & up to Rs. 1.50 crore | Up to Rs. 40 lakh (studies in India) | |
| Up to Rs. 1.5 crore (studies abroad) |
Application process for an education loan from State Bank of India
The application process for State Bank of India education loans is straightforward.
You can start your application either online through the SBI website or by visiting your nearest SBI branch.
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Online Application
- Explore the SBI website for comprehensive details about different types of education loans, and interest rates.
- Carefully fill out the application form with accurate and complete information.
- Prepare (in PDF, JPG, or PNG format) all the necessary documents such as identity proof, address proof, income proof, admission letter, and other details for submission with the application. The total size of all the documents must not exceed 2 MB.
- Upload or submit the completed application form along with the required documents as instructed on the SBI website.
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Branch Visit
- You can also apply for an education loan the old-fashioned way by visiting your nearest SBI branch.
- The steps involved are similar to the online process. You fill out a form with your details and submit it with a copy of the documents directly to the bank.
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Loan Processing
- Upon receipt of your application, the bank will scrutinize and verify every detail. The bank personnel will also conduct your interview. The bank would want to meet the co-applicant.
- Bank personnel will also verify collateral. It can be time-consuming due to the complexity of verification requirements. If the loan is approved, you will receive a sanction letter. The letter will outline the loan amount, interest rate, and repayment terms.
- Once you accept the loan terms and sign the loan contract, the funds will be disbursed. They may be transferred directly to your educational institution or to a loan account in your name.
Eligibility for State Bank of India education loan
To be eligible for an education loan from the State Bank of India (SBI), applicants must meet several criteria:
- Citizenship: Applicants must be Indian citizens.
- Age: They must be between 18 and 35 years of age.
- Admission: They must have secured admission to an approved institution.
- Collateral and Co-applicant: Depending on the type of loan and amount, collateral and a co-applicant are required.
Eligible Courses – Studies Abroad
The loan covers regular graduate, postgraduate, and doctorate courses in any discipline offered by foreign institutes/universities in countries such as the USA, UK, Canada, Australia, Europe, Singapore, Japan, Hong Kong, and New Zealand.
Eligible Expenses
- College/School/Hostel Fees: All payable fees.
- Examination/Library/Laboratory Fees: Necessary academic expenses.
- Travel Expenses: Passage money for studies abroad.
- Books and Equipment: Purchase of necessary items like books, instruments, uniforms, and computers.
- Additional Expenses: Study tours, project work, and thesis expenses, capped at 20% of the total tuition fees.
- Deposits: Caution deposits/building funds supported by institution bills, capped at 10% of the tuition fees.
- Insurance: Premium for ‘RiNn Rakhsha’ to improve loan insurance coverage.
Quantum of Finance
- Minimum Loan Amount: Rs. 20 Lakhs
- Maximum Loan Amount: Rs. 1.5 Crores
Margin
- Scholarship/Assistantship: To be included in the margin.
- Pro-rata Basis: Margin to be brought in on a year-on-year basis as and when disbursements are made.
Why choose the State Bank of India for a study abroad loan?
There are several compelling reasons for taking an education loan from the State Bank of India. Here are the most important ones:
- Among Indian banks, both in the public and private sectors, SBI has the largest number of branches. There are 22,400 domestic branches and 200 foreign branches in 29 countries. There are four branches in the USA, six branches in Canada, and 12 branches in the UK. This makes it easier for students to address issues that require them to visit a bank branch in person or to seek tailored help from bank staff experienced in international banking.
- SBI offers substantial loan amounts to students. SBI Global Ed-vantage loans offer up to ₹1.5 crore for education abroad. This amount is sufficient for most students to fund their foreign education, even at some of the top universities in the world, where the expenses of pursuing higher education may be higher than average.
- SBI education loan interest rates are among the most competitive in the market. Domestic loans cost between 8.15% – 9.65% and international loans 11.15%. That is far less than the 13%-15% charged by some private sector banks.
- There is zero processing fee up to ₹20 lakhs. Above that it is capped at ₹10,000, which is a very reasonable rate.
- SBI provides additional interest concessions for female students, making it an attractive option for them. Currently, the concession rate is 0.5%.
These features make SBI education loans very attractive for students.
State Bank of India education loan EMI calculator
SBI has an EMI calculator to help you arrive at various EMI amounts for different combinations of interest rate, loan amount, and tenure. You can find it here.
Documents required for securing a student loan from the State Bank of India
This is a detailed list of the documents you need to attach to your SBI education loan application:
| Category | Documents Required |
| Student-Applicant Documents | Proof of Identity: |
| – Aadhaar Card | |
| – PAN Card | |
| – Passport (mandatory for studies abroad) | |
| Proof of Residence: | |
| – Aadhaar Card | |
| – Passport | |
| – Voter ID card | |
| Academic Records: | |
| – 10th and 12th results | |
| – Graduation results | |
| – Entrance exam results (e.g. GRE and TOEFL) | |
| Proof of Admission: | |
| – Admission letter from an institution abroad | |
| – Statement of Cost of Study/Schedule of Expenses | |
| Other Documents: | |
| – Passport-Size Photographs | |
| – Details of any other loans you are repaying | |
| Co-Applicant/Guarantor Documents | Proof of Identity: |
| – Aadhaar Card | |
| – PAN Card | |
| Proof of Residence: | |
| – Aadhaar Card | |
| – Passport | |
| – Voter ID card | |
| – Utility bills | |
| Other Documents: | |
| – Passport-Size Photographs | |
| Income Proof for Salaried Co-Applicant/Guarantor: | |
| – Salary slip | |
| – Copy of Form 16 | |
| – IT returns | |
| – Bank account statement for the last 6 months | |
| Income Proof for Self-Employed Co-Applicant/Guarantor: | |
| – Business address proof | |
| – IT returns | |
| – TDS certificate | |
| – Form 16A | |
| – Bank account statement for the last 6 months | |
| Collateral Documents | – Title deed of house, property |
| – Photocopy of other liquid assets offered as security |
Other Banks & NBFCs Offering Education Loan to Study Abroad:
- Union Bank of India Education Loan
- ICICI Bank Education Loan
- Yes Bank Education Loan
- IDFC Bank Education Loan
- Bank of India Education Loan
Things to remember when applying for State Bank of India education loans
Taking an education loan is a significant financial commitment. Here are some key steps to ensure you make an informed decision:
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Research and Compare Loan Options
Carefully compare interest rates and loan terms offered by different banks. SBI education loan interest rates are the most affordable but you must always perform due diligence.
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Assess Your Financial Situation
Calculate the total cost of your education, including both tuition fees and living expenses. Are you confident in your ability to repay? Evaluate the situation based on potential earnings and job prospects.
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Read the Fine Print
Thoroughly examine the loan agreement and pay attention to interest rate fluctuations, penalties, and repayment schedules.
SBI education loan interest rates are floating and would be priced 2-4% above the repo rate set by the Reserve Bank of India. If you take out a loan at 9.6% today, there is no assurance it will not rise to 11% after five years. Similarly, it might drop to 7% in the future.
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Seek Professional Advice
Consult with a financial advisor to understand the ramifications of taking an education loan. Have discussions with bank representatives to clarify doubts and acquire complete information about the loan product before you sign. It is a significant sum of money and you need expert advisors.
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Collateral rules for State Bank of India education loans
SBI accepts two types of collateral for overseas education loans: immovable assets and movable assets.
- Immovable assets such as a freehold house, a flat, or a shop.
- Movable assets usually include fixed deposits, life insurance policies, NSC, and mutual funds.
State Bank of India usually does not accept jewelry and gemstones as collateral.
For immovable assets, you have to provide proof of ownership. In the case of movable assets, a photocopy is required for submission after the original is verified.
Next, we will answer some of the most frequently asked questions about State Bank of India education loans.
Also Read: Collateral vs Non Collateral Education Loan for Abroad Studies
FAQ
1. What is a fixed and floating rate of interest?
Which one you choose entirely depends on your risk appetite. There are advantages and disadvantages to both and they are equally appealing. But one tip for you is that when there is a high-interest regime, do not opt for a fixed rate since you will not gain when the interest rate reduces.
2. How long does it take to process the loan request by the State Bank of India?
State Bank of India typically takes 7-14 days to decide on an education loan application. You can usually expect a preliminary loan approval within a week. Once the collateral is fully verified, the loan amount is disbursed within fifteen days.
3. Which expenses are covered by SBI education loans?
These are the expenses covered by an SBI education loan for studying abroad:
– Tuition fees payable to the college, school, or hostel
– Examination, library, and laboratory fees
– Travel expenses and passage money
– Purchase of books, equipment, instruments, uniforms, and computers at a reasonable cost
– Other expenses required to complete the course, such as study tours, project work, and thesis
– Caution deposit and refundable deposit, not exceeding 10% of the tuition fees for the entire course
– The premium of ‘RiNn Raksha’, which can be financed to improve insurance coverage for the loan
