Lowest education loan interest rate for study abroad

The cost of tuition fees alone at prestigious foreign institutes could exceed ₹20 lakhs.

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

Considering these essential aspects of studying abroad, you could need anything between ₹50 lakhs and ₹80 lakhs.

That’s massive.

Does this mean you must give up on your dreams? Or discount them for something cheaper?

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 They Cover?

Low interest education loans are monetary assistance availed by students to meet the expenses related to their education, paying a comparatively low-interest rate.

These education loans cover the costs of your

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 would be a safer choice for students to opt for.

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 with 8-10% interest.

The low interest education loans are usually offered in India by public banks with 8% interest.

Now, let’s get to the lenders that provide you lowest interest student loans.

Top Banks in India Offering Lowest Education Loan Interest Rates

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

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

Most of the low interest education loans can be repaid within 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 be 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.

To take any of the low interest loans to study abroad, you must fulfill the eligibility checklist.

Tip: Calculate the Amount You Will Need to Study Abroad

Eligibility Requirements for Low Interest Education Loans

To successfully get your loan passed, you must be eligible to take a student loan.

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; undergoing 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.

For students who have displayed average academic scores but have shone in extracurriculars too, there is a good chance of getting a low-interest loan.

Documents Required for Lowest Education Loan Interest Rate

If you are eligible for a student loan, the next important thing for you is to gather the necessary documents.

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

Loan insurance helps secure loan repayment.

In any case of an unfortunate accident, the loan insurance company will pay back the entire education loan amount, instead of the co-applicants.

This can be a huge relief to the borrowers of government bank education loans, for which even retired parents are named as co-applicants.

However, it is not mandatory for every loan applicant to have a 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. Along with the form, you will be required 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 the 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 progress your loan accordingly.

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 repaying of loans. The loan repayment can be paid back 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 preferred 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 repayment before signing off on the loan.

With the right lowest education loan interest rate, there is no stopping you and your dreams of getting your professional and academic goals.

You can also bid your loans on India’s top loan bidding platform Fundright and choose from a wide variety of lenders.

Even if you’ve been rejected or disappointed by reaching out to bank managers, FundRight professionals will knock on the right door for you.

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:

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.

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.

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.

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.

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.

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.