The Educational loan is one of the best schemes by Indian government, which enables the students to go abroad for their higher studies and pursue their dreams. But still there are many discrepancies and confusions, when it comes to taking a loan for education and this article will cover the same with respect to private and public banks.
Public banks (Nationalized banks):
- Less interest (Around 11-13%)
- Need to show security in the form of assests, property, etc., for EDU loans more than 7lakh INR
- You can start repaying after your studies
- Processing time takes very long
- You need to submit many documents
- The bank manager needs to trust you for giving the loan
- Most of the bank managers are unfamiliar with the German university process and hesitate to sanction the loan.
Please note that, the processing time takes 2-3 months and all the documents must be properly provided to the manager. But still, the rate of interest is less and the repayment time is also a major advantage for the students.
Since most of the managers doesn't know about FREE education in Germany, they do not understand the process of blocked account, No tution fees, etc., You need to struggle a bit, to make them understand with proper documents from the embassy or DAAD. The bank manager will hesitate to transfer the loan amount into your account for the blocked account purpose and you need to show him the VISA regulations and convince them.
Private banks:
- More interest (Around 13.5%)
- Need to show security only for more than 10lakhs
- You need to pay the interest right from the time you avail the cash
- Processing time is less
- Less documents are needed
- They are familiar with the process of German universities and VISA.
Since they process in short time, doesn't mean that they are better. They charge more than the Public banks and at last, it will you who should pay the huge amount in return. Also, your parents needs to pay the interest right from the day you encash your loan.
Both of these banks have their own advantages and disadvantages, you need to be careful and think before you choose a side.
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Public Banks seem to be an obvious choice here .Thanks for the info Aravind.Great job.
ReplyDeleteWell, it depends. If you don't have a lot of time then, you have no other option than to go for private banks. On the other hand, if you have almost 4 months prior to your departure, then you can opt for Public banks.
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