There are numerous students who wish to study abroad in world-class universities, but the rising cost of overseas education often poses financial challenges for some aspiring students. To overcome this hurdle, study abroad education loans emerge as a feasible solution for pursuing your education abroad. There are many financial lenders that offer education loans to study overseas such as Nationalized banks that generally provide lower interest rates, ensuring affordability.
Conversely, private banks excel in convenience, swift process, and quick disbursal of funds. It might seem like sitting on the fence, but the choice between the two depends on the option that aligns with your financial needs and study goals. Though the functions of these lenders are relatively similar, there are some factors like rate of interest, processing fees moratorium periods, Processing Time, etc. that differ from one another.
Thus, if you are yet to decide which bank is best for education loan for abroad, this article will give you a brief insight about both nationalized banks and private banks. So tightly fasten your seatbelt as we explore more.
What are Nationalized Banks & Private Banks?
| Nationalized Banks | Private Banks |
| Nationalized banks are financial institutions that are owned, operated, and controlled by the government. Some of the popular public banks are the SBI, BOI, UBI, BOB, PNB, and BOM. | Private Banks are a financial institution operated by private individuals or corporations, some of the popular banks are ICICI Bank, Axis Bank, and IDFC First Bank. |
Let us move ahead and look at the factors that students must consider before choosing a financial institution for an overseas education loan.
Nationalized Banks VS Private Banks
Nationalized Banks and Private Banks both provide collateral and collateral free education loan for abroad for abroad education. To get a better understanding of which one can be a better option for you let us refer to the table below.
| Parameters | Nationalized Banks | Private Banks |
| Quantum of Finance | Secured Laon – Up to 1.5 Crore or more depending on the project cost.Unsecured – Up to 7.5 Lakhs | Secured Loan – Up to 75 lakhs to 1 Cr depending on the project cost.Unsecured Loan – Up to 75 Lakhs |
| Rate of Interest | 9.5% to 10.5% | Secured – 9.7% to 11% Unsecured – 11.5% to 13.5% |
| Processing Time | Up to 3 Weeks | Up to 10 Working days |
| Processing Fees | 10,000 + GST | Up to 1% of the total loan amount + GST |
| Disbursement | To the University’s bank account, and Forex card for living expenses | To University account for tuition and living expenses in Students Account / Forex Card / Landlord Account. |
| Repayment Tenure | Up to 15 years, repayment in the form of EMI after the completion of the moratorium period | Up to 10 years, repayment in the form of EMI after the completion of the moratorium period |
| Moratorium Period | Up to 12 months | Up to 6 months |
| Serving Simple Interest | Optional | Compulsory after loan disbursement |
| Popular Schemes | E.g. – Union Bank of India For Unsecured Loan – Up to Rs. 40 Lakh under the Special Union Education Scheme for Abroad studies | E.g. – ICICI Bank Unsecured Loan – Up to Rs 1 Crore. However, this is applicable to universities and the courses that fall under the prime list of this bank. |
| Tax Benefits | Eligible under section 80E | Eligible under section 80E |
| Age Limit | 18 to 35 years | 18 to 35 years |
Summing Up
These are some of the factors for an overseas education loan that you must consider before choosing a financial lender. Apart from these factors you can know detailed guidelines and policies of different financial lenders, for that you can search for some of the top overseas education loan advisors that offer best online loan services for studying abroad. They will guide you and help you choose the best fit for you, we hope this article was helpful. All the very best.