With the number of foreign degree seekers in India growing by the day, several public and private banks have come forward with various schemes which can help fulfil their dreams. Before applying for a loan, the applicant must secure a seat in a recognised institution, followed by a thorough research of the requirements for taking a loan from a bank. A comparative study before choosing a bank is recommended, and it should be noted that public sector banks generally have lower interest rates.

Below is a comparison between a public and a private bank to help applicants.

State Bank of India

Job oriented professional/ technical Graduation Degree courses/ Post-Graduation Degree and Diploma courses like Master in Computer Application (MCA), Master in Business Administration (MBA), Master of Science (MS) and likewise offered by reputed universities. Also, courses conducted by CIMA (Chartered Institute of Management Accountants) - London, CPA (Certified Public Accountant) in USA, etc.

Loan amount: Up to INR 30 lakh

Margin

• Up to INR.4.0 lakh- No Margin
• Above INR .4.0 lacs- 15 %

Repayment:

• Up to INR 4 lakh- repayment period up to 10 years
• Between INR 4 lakh and 7.5 lakh– repayment period up to 10 years
• Above INR 7.5 lakh– the repayment period up to 12 years

Repayment starts one year after completion of course or six months after securing a job, whichever is earlier. If a subsequent second loan is availed for higher studies, the candidate can repay a combined loan amount for both the courses in 12 years after the second course is completed.

• The SBI’s Base Rate 9.70% w.e.f. 08.06.2015
• For loans up to INR.4.0 lakh – the rate of interest (ROI) in 3.65 above Base Rate. Currently 13.35% p.a.
• For loan limit between INR 4 lakh and7.5 lakh – the ROI is 3.90%above Base Rate, currently 13.60% p.a.
• For loan limit above INR 7.5 lakh – the ROI is 1.90% above Base Rate, currently 11.60% p.a.

A concession of 0.50% in interest is considered for girl students. Besides, a1% concession for full tenure of the loan is considered, if interest is serviced promptly as and when applied and during the course duration. Additionally, all education loans are exempted from Income Tax under Section 80(E) in respect of interest paid.

• Letter of admission
• Completed Loan Application Form
• Two passport size photographs
• Statement of cost of study
• PAN Cardof the student and Parent/ Guardian
• AADHAR Cardof the student and Parent/ Guardian
• Proof of identity
• Proof of residence
• Student/Co-borrower/ guarantor's bank account statement for last 6 months
• Income Tax (IT) return/ IT assessment order, of previous 2 years of Parent/ Guardian/ other co-borrower (if IT Payee)
• Statement of assets & liabilities of co-borrower
• Proof of income(i.e. salary slips/ Form 16)  of co-borrower

Axis Bank

Courses covered:

The bank offers loan for pursuing higher professional and technical education. Students, who have secured admission in an institution, are eligible.

Loan amount:

Up to INR 20 lakh, which would cover tuition fees, hostel charges, cost of books, and others. Loan amounts higher than this would warrant a case-to-case approval.

Margin

Like the SBI, the Axis Bank also has No margin for education loans up to INR 4 lakh. For loans above INR 4 lakh, intended for higher studies overseas, a15% margin is applicable.

Repayment:

Easy Monthly Instalments (EMI)can be spread over 180 months, which is up to 15 years.ROI perannum ranges from 13.75% to 15.75%.

The student loan will be disbursed in full or in suitable installments directly to the educational institution or vendor of books orequipment as and when Bank understands the requirement.

Axis Bank Base Rate is 9.95 %

Other requirements:

The parent(s) or guardian of the student would be treated as a co-applicant for student loan. His or her role would be like the primary debtor. Third party guarantee and/or collateral security may be asked for in appropriate cases.

Axis bank does not charge loan processing or prepayment fee. However, charges for Late Payment of EMI is INR 500 + taxes per cheque bounce and a penal interest @24% per annum i.e. @ 2% per month on the overdue installment (s).

Repayment

• Up to INR 4 lakh-Base rate + 7.00%
• Between INR. 4 lakhand INR. 7.5 lakh -Base rate + 8.00%
• Above INR 7.5 lakh - Base rate + 6.00%
• For Girl Child up to INR 4 lakh-Base rate + 6.50%
• Between INR. 4 lakhs and INR 7.5 lakh -Base rate + 7.50%
• Above INR 7.5 lakh-Base rate + 5.50%

Timeline:

Bank will convey its decision within 15 working days from the date of receipt of the application.

Several public sector banks offer loans up to INR 20 lakh but have varying ROIs per annum. Bank of Baroda has a 12 % for loans above INR 4 lakhs while.Canara Bank offers 12 % on amounts between INR 4 lakh and 7.5 lakh. Credila (a HDFC Bank Company) has a ROI of 13.5% and ICICI 15 %. Meanwhile the Indian Overseas has a 15 % ROI for a loan offer up to INR 40 lakhs.