Education is one of the most significant investments in a person’s life, and pursuing higher studies abroad is a dream for many. However, the cost of international education can be a barrier for most students. Education loans have become a popular financial tool to bridge this gap.
In India, the Bank of Baroda (BOB) and the State Bank of India (SBI) are two of the leading public sector banks offering education loans to students aiming to study abroad. Both banks offer competitive overseas education loan schemes tailored to the needs of students.
This article provides an in-depth comparison between BOB and SBI education loans for abroad studies, covering aspects like interest rates, loan amounts, repayment terms, and other essential factors. So, you can make an informed decision based on these points and finalise the best bank for your overseas education loan. So, without any further ado, let’s begin our comparative analysis.
Evaluating the key features of these leading banks is essential for overseas education loan aspirants. Let’s get into their details:
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Loan
Amount |
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Secured
Loans: Up to Rs.1.5 crore |
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Funding
& Margin |
Non-Premier
Universities - 90% Funding +10% Margin |
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Rate of
Interest |
Interest
rates for Non-Premier Universities start at 10.35% |
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Concessions |
For
Non-Premier Universities 0.20% of Girl Concession is offered |
It provides a
0.50% to Rin Raksha Insurance Holders |
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Level of
Study |
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Tenure |
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Sponsors |
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Moratorium
Period |
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Now that we have a comparison between the two banks, let’s look at the factors based on which you should finalise your bank.
When choosing a bank for a study abroad loan, it's essential to consider several factors to ensure you get the best possible terms and conditions. Keep in mind these important factors:
Fixed vs. Variable: Some banks offer fixed interest rates, while others offer variable rates that may change over time.
Current Rates: Compare the Baroda abroad education loan interest rates with SBI as even a small difference can significantly impact the total repayment amount.
Maximum Loan Limit: Ensure the bank provides sufficient loan amounts to cover your tuition, living expenses, travel, and other costs.
Secured vs. Unsecured Loans: Understand the difference in loan amounts offered for secured (with collateral) and unsecured loans (without collateral).
Valuation and Insurance: Understand the bank’s requirements for valuing and insuring the collateral.
Requirement of Collateral: For higher loan amounts, banks may require collateral like property or fixed deposits. Evaluate your ability to provide collateral.
Academic Requirements: Some banks have specific academic requirements, such as minimum grades or admission to specific institutions.
Cosigner/Sponsor: Understand the requirements for cosigners or sponsors, as this can affect your eligibility and loan terms.
Grace Period: Consider the moratorium period (the time during which you don’t have to start repaying the loan), which usually lasts for the course duration plus a grace period.
Interest During Moratorium: Check if the education loan interest rate is simple or compounded during the moratorium period.
Student Contribution: Some banks require a margin, meaning you must pay a portion of the total expenses, with the bank covering the rest. Ensure you can manage this margin.
Approval Process: Check the time taken by the bank to process and approve the loan. Delays can affect your study plans.
Disbursement: Ensure the bank can disburse funds in a timely manner, especially if you need funds at different stages of your education.
Upfront Fees: Compare processing fees, administrative charges, and any other hidden costs that could increase the overall cost of the loan.
Prepayment Penalties: Verify if there are any fees for paying off the loan early.
Tenure: Consider the repayment period offered. Longer tenures mean lower monthly instalments but more interest paid over time.
EMI Options: Evaluate the flexibility in Equated Monthly Instalments (EMIs) and any options for early repayment.
These are the important aspects that you must consider as an overseas education loan applicant. Ultimately, both the Bank of Baroda and the State Bank of India offer robust education loan schemes for students aspiring to study abroad, each with its own set of advantages. BOB offers a slightly lower interest rate and a comprehensive loan package, making it a good choice for students who need a smaller loan amount. On the other hand, SBI’s higher maximum loan amount, extensive coverage, and the option of an SBI education loan without collateral make it an attractive choice for students planning to pursue expensive courses in countries with high living costs.
For students seeking personalized guidance and a seamless loan application process, Élan Overseas Education Loans provides specialized services. Reach out to team Élan today to explore your customized loan solutions!
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