Like other Indian states, education loans in Karnataka are extended by Public Sector Banks, private banks and Non-Banking Financial Companies (NBFCs). Some of the major public sector banks in Karnataka include Canara bank, Karnataka bank, Syndicate bank etc., Private banks like HDFC, Kotak Mahindra Bank, Lakshmi Vilas Bank also extend educational credits although at a higher rate of interest.
Education Loan in Karnataka: Public Sector Banks vs Private Banks vs NBFCs
Education loans can be availed from a Public Sector Bank or private bank depending on the convenience of the loanee. Public Sector Banks offer loans at a lesser interest rate. However, the process is tedious and involves complex documentation.
Private Banks offer loans at a relatively higher interest rate but the process is smoother and simple. Both public sector banks and private banks expect a strong customer profile and require collateral securities in the form of real estate properties (plots/flats/individual villas), liquid securities and immovable assets etc.
However, Non-Banking Financial Companies offer unsecured education loans without collateral for a higher rate of interest. Some of the major NBFCs for education loans include
- Credila (HDFC group)
- Global Student Loan Corporation (GSLC)
- Avanse
- International Student Loan Program (ISLP)
- Credenc
Interest Rates
|
Type of Lender |
Interest Rate |
|
Public Sector Banks |
9%-12% |
|
Private banks |
11%-13% |
|
NBFCs |
12%-14% |
It is to be noted, the rates of interest depend on several external factors such as the applicant’s score in entrance exams like NEET, JEE, GRE, GMAT etc., the university and their academic profile.
Education Loan In Karnataka: Eligibility Conditions
|
Criteria |
Explanation |
|
Nationality/Domicile |
|
|
Courses Eligible |
|
|
Types of Institutions |
|
|
Collateral types |
Collaterals accepted:
Maximum loan amount: Up to ₹ 1 crore |
Geographical Effect
Most of the regions inside Karnataka are serviceable for education loans. However, some rural areas and tribal hamlets may not be serviceable. In such cases, banks make sure that your loan application is processed by other large banks and NBFCs and get your loan sanctioned.
Coverage - List of Expenses Covered
- Fees payable to school/college (including tuition, hostel and other miscellaneous fees)
- Examination/Laboratory/Library fees.
- Purchase of books/equipment/uniforms.
- Purchasing a personal computer/laptop, if needed to complete the course.
- Travel Expenses for studies abroad.
Loan Margin
Government banks in Karnataka have a strict margin policy. They provide loan financing up to 80%-90% of the total amount needed to pay your fees.
However, private banks and NBFCs offer 100% loan financing that covers all additional expenses including tuition fees, hostel and other miscellaneous expenses.