in this post, we will share all the information related to education loans. Where can you easily get an education loan? How can you get it? How can you reduce the interest? Who should not take an education loan? Who should take it?
I have personal experience with the SBI education loan as I also took an education loan from SBI for my studies. So, in this video, I will share information along with personal experience.
SBI Education Loan Categories
SBI broadly provides education loans in five categories:
- SBI Student Loan for students who want to study within India
- SBI Global Advantage Loan for students who want to study abroad
- SBI Scholar Scheme for India’s top colleges like IIT, IIM, NIT, etc.
- SBI Skill Development Scheme for vocational courses
- SBI Takeover Loan Scheme for existing education loans
Loan Amounts
SBI Student Loan offers up to 20 lakhs. Under SBI Scholar Scheme, students can get up to 40 lakhs, based on college categories divided into AA, A, B, and C:
- Category AA: Up to 50 lakhs
- Category A: Up to 40 lakhs
- Category B: Up to 30 lakhs
- Category C: Up to 7.5 lakhs
SBI Global Advantage Loan offers loans ranging from 7.5 lakhs to 1.5 crores, covering tuition fees, hostel, computer expenses, and more.
Margin Money
For SBI Student Loan, 100% financing is available for amounts up to 4 lakhs. Beyond this, 5% margin money is required. For SBI Global Advantage Loan, 15% margin is needed.
Collateral Requirements
SBI Scholar Scheme does not require collateral. For SBI Student Loan, no collateral is needed for amounts up to 7.5 lakhs. Beyond this, parents must be co-borrowers, and collateral (like property papers, government bonds, or LIC policies) is required up to 110% of the loan amount. Similarly, for SBI Global Advantage Loan, 110% collateral is required for the loan amount.
Processing Fees
SBI Scholar Scheme has no processing fees. For SBI Student Loan, no fees apply for amounts up to 20 lakhs. Above 20 lakhs, a fee of 10,000 + GST is applicable. For SBI Global Advantage Loan, a processing fee of 10,000 + GST is also applicable.
Interest Rates
Interest rates vary and are subject to change every few months. As of now:
- SBI Student Loan: 11.15%
- SBI Scholar Scheme: 8.55% to 9.65% (based on college category)
- SBI Global Advantage Loan: 11.15%
For girls, there is a 0.50% concession on the interest rate. The interest rates are floating and not fixed.
Loan Repayment and Moratorium Period
Loan repayment starts after the moratorium period (course duration + 1 year). During this time, only simple interest is charged, and after this, compound interest is applied. SBI provides 15 years for loan repayment. During the moratorium period, no penalty is charged even if you don’t pay EMIs.
