SBI vs. Bank of Baroda Education Loan for Abroad Studies

sbi vs. bank of baroda study abroad loan

Imagine yourself stepping onto a global stage, a world brimming with diverse cultures and endless possibilities. Studying abroad unlocks doors to specialized skills, broadened perspectives, and experiences that will shape your future. But amidst the thrill lies a looming concern – how do you finance this incredible adventure?

Enter the banks, they offer a lifeline: education loans. Here, two popular names stand out – the State Bank of India (SBI) and the Bank of Baroda (BOB). Choosing the right one can be a bit complex. SBI promises stability and a wide range of options.  They might be the first name that strikes your head. BOB, another banking powerhouse, steps forward with competitive rates and specialized programs designed just for you.

But the question is which bank holds the key to unlocking your academic dreams abroad?  Let’s delve deeper and unravel the details of both SBI and BOB’s offering secured and unsecured education loan for abroad studies. Together, we’ll find the perfect fit to finance your incredible journey overseas.

State Bank of India vs Bank of Baroda

1. Interest Rates

Interest rates are like the Mount Everest of education loans – the higher they are, the tougher the climb. Both SBI and BOB offer floating interest rates based on the External Benchmark Lending Rate (EBLR) set by the Reserve Bank of India (RBI). However, their initial rates differ slightly. SBI charges a base rate of 10.65% for girl child and 11.15% for others, whereas BOB has marginally lower rates starting at 9.90% for the prime university list and 10.20% for non-prime university list, moreover, it gives a concession of 0.2 for girl child. Seems like BOB edges out SBI here, however, the interest rates are always floating, and it depends on the individual profile.

2. Quantum of Finance

Education loans can be secured (backed by collateral like property) or unsecured (based on your creditworthiness). Both SBI and BOB offer both options. Talking about SBI, for collateral free education loan for abroad education it offers loan amounts up to Rs. 1.5 Crore for overseas education, while BOB offers up to Rs. 1.5. Crore for prime university list and 60 lakhs for non-prime list. However, both banks offer a similar quantum of finance or more depending on the project cost. Now, when it comes to unsecured loans SBI and BOB offer up to Rs. 7.5 lakhs. However, the loan amount depends on the project cost and the applicant’s profile.

3. Processing Fees

When it comes to processing fees, they’re often seen as the toll you pay to access the loan highway. In the case of SBI, they charge a processing fee of INR 10,000 plus GST. On the other hand, BOB applies a processing charge of 1%, with a maximum cap of INR 10,000, recovered upfront for loans above Rs. 7.50 lakh. Interestingly, this processing charge is refunded upon availing of the loan (first disbursement) for premium institutions. Additionally, there’s no processing charge for loans up to Rs. 7.50 lakh with BOB. This difference in processing fee structures is worth considering when evaluating your options for education loans.

4. Repayment

Once you’ve graduated and secured your desired dream job, the reality of loan repayment sets in. Fortunately, both SBI and BOB provide a repayment period of up to 15 years after the completion of your course, offering you ample time to stabilize your finances. Moreover, SBI and BOB with a one-year moratorium period after the course concludes, offering a much-needed breather before repayment commences. This grace period can be a welcome respite, allowing you to transition smoothly into the workforce without the immediate burden of loan repayments.

5. Loan Margin

Loan margin, or collateral margin, is pivotal in determining education financing. SBI offers a margin of 90% plus an additional 10%, providing substantial coverage. On the other hand, BOB’s approach varies. It offers 100% funding for prime university list institutions, while non-prime universities receive 90% plus an additional 10%. Understanding these margins helps in assessing the extent of financial assistance provided by each bank, aiding in informed decision-making.

Special Perks

While interest rates and loan amounts are crucial, it’s the special features that can set a bank apart. Here’s where things get interesting:

1. SBI – Global Ed-Vantage

State Bank of India’s “Global Ed-Vantage” scheme targets students aspiring to pursue full-time overseas education, offering SBI education loan for abroad studies up to a substantial ₹1.5 crore. Covering tuition, living expenses, and travel costs, it stands out with competitive interest rates and a generous repayment window of up to 15 years. The scheme streamlines the process with online applications, attractive interest rates, and loans ranging from Rs. 20 lakhs to Rs. 1.5 crore. Repayment is made convenient through EMIs for up to 15 years, and loans can be sanctioned even before obtaining the i20/Visa. Additionally, students can benefit from tax deductions under section 80(E), easing their financial burden.

2. BOB – Baroda Scholar

Bank of Baroda’s “Baroda Scholar” program offers loans up to ₹1.5 crore with appealing interest rates, making it a competitive option for international studies funding. Notably, the program waives processing fees for loans up to ₹7.5 lakhs, ensuring accessibility. Catering to various students, including those pursuing vocational or technical studies abroad, the program imposes no processing charges up to Rs. 7.50 lakh, no documentation charges, and no margin on loans up to Rs. 4 lakhs. These features make it a hassle-free option for students seeking financial support for international education.

Summing Up

When considering financing options for your abroad education, both the State Bank of India (SBI) and Bank of Baroda (BOB) offer competitive solutions. SBI’s “Global Ed-Vantage” scheme provides a comprehensive approach with a wide range of options, while BOB’s “Baroda Scholar” program stands out with appealing interest rates and accessible features. Whether it is the State Bank of India or Bank of Baroda abroad education loan interest rate, both banks offer floating interest rates for their education loans, allowing flexibility in repayment. Ultimately, the decision should be based on individual preferences and financial considerations to ensure a smooth journey towards academic success abroad, underscoring the importance of evaluating both SBI and BOB’s offerings. For better guidance, you can reach out to some of the top overseas education loan advisors and make the right choice.  Good luck!

Education Consultant

Education Consultant

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