This varies from bank to bank. The maximum amount sanctioned is Rs 10 lakh for inland studies and Rs 20 lakh for studies abroad. The interest rates vary between 10 to 12 per cent. Earlier there was a cut off age for applying (30 years) but this clause has now been struck down. At SBI, the loan amount can even go up to Rs 50 lakh for those who have taken an insurance policy to cover their loans, under the Edu Shield scheme, which transfers the risk to the insurance company in case of the death of either the borrower or the co-guarantors. Like most of their other loans, SBI charges no processing fee but asks for a deposit of Rs 5,000 has to be made for studies abroad, which is later adjusted in margin money.
The repayment of the loan starts one year after graduation or, six months after securing a job, whichever is earlier. Most banks give the same moratorium as SBI but with some the loan must be repaid in 84 Equated Monthly Installments (max), i.e. seven years. The loan disbursement is made in one go or term-wise/semester, direct to the institute.
You can use Creditfina’s Education Loan Comparison tool to zero in on the bank that would offer you the most competitive rate on your education loan.
A hot tip: You can circumvent the high interest rates in India by taking a personal loan to finance your travel, going abroad and taking a cheaper loan from your host country. But for that, you need to have a relative there, who has a clean credit history and who is willing to be your co-guarantor.