Education Loan at Zero Interest Rate
Education Loan at Zero Interest Rate
Mar 21, 2024
15 Mins
Education loans can be a helpful means to pursue higher education without worrying about finances. If you are looking for an education loan at a zero interest rate, read on to find out more.
Can I Obtain an Education Loan without Interest?
Unfortunately, it is not possible to obtain an education loan without any interest. Student loans, like any other credit product, come with an interest charge, which banks or lenders will apply.
However, education loans have their advantages, such as a moratorium period until the completion of studies. During this time, only simple interest will be charged on the loan amount, and you will need to pay only the interest during this period.
What are Education Loans?
Education loans are a type of term loan that is taken to fulfill educational needs. While primarily meant for higher education, they now also cover school fees.
The loan payments are usually made directly to the institution on a semester-wise basis. These loans are usually need-based and cover expenses such as tuition fees, cost of books, food and accommodation, lab and library fees, travel expenses, and study tour expenses.
In case the student does not meet the eligibility criteria, their guardian can take the loan on their behalf. The option of a secured or unsecured loan is available, which will determine the loan amount, interest rates, and tenure.
Which Banks Provide Interest-Free Education Loans?
In India, most banks and NBFCs (Non-Banking Financial Companies) offer various education loan schemes. While you may search for an education loan with zero interest, it is important to note that no bank in India offers interest-free education loans.
Below are some top banks and NBFCs that provide education loans:
1. State Bank of India
- Loan amount: Up to Rs.1.50 Crore
- Interest Rates: Range from 8.20% to 11.15%
2. HDFC Bank
- Loan amount: Up to Rs.150 Lakh
- Interest Rates: 9.50% onwards
3. ICICI Bank
- Loan amount: Up to Rs.2 Crore
- Interest Rates: 9.85% onwards
4. Axis Bank
- Loan amount: Up to Rs.50 Lakh
- Interest Rates: Range from 13.70% to 15.20%
5. IDFC First Bank
- Loan amount: Up to Rs.75 Lakh
- Interest Rates: Range from 9% to 15%
6. Avanse
- Loan amount: Rs.1 Lakh onwards
- Interest Rates: 14.24% onwards
7. HDFC Credila
- Loan amount: Depends on your requirement
- Interest Rates: Credila Benchmark Lending (current rate is 12.30%) + Depends on your credit profile, collateral offered, the course undertaken, etc.
8. Auxilo
- Loan amount: Depends on your requirement
- Interest Rates: 8% onwards
Please note that the numbers mentioned above are subject to change at the discretion of the lender.
How to Obtain Affordable Student Loans?
While obtaining zero interest loans for students is not possible, there are several ways to reduce your interest amount. Here are some strategies to get education loans at affordable interest rates:
1. Secured Education Loans
Consider opting for a secured education loan using your property or any other asset as collateral. This allows you to negotiate a higher loan amount and lower interest rate.
2. Subsidies and Schemes
The government and banks occasionally offer special subsidies and schemes. These may lower the interest rate or provide a subsidy on the interest amount, helping you secure a loan at a lower rate.
3. High Credit Score
Maintaining a higher credit score is beneficial when seeking an unsecured education loan. Lenders generally prefer applicants with a higher credit score, and it also gives you negotiating power over the interest rate.
4. Higher Margin
Paying a higher margin can help reduce the actual loan amount, making it more manageable for you in the future.
5. Prestigious Institutions
Lenders often prioritize applicants who have gained admission to affiliated or prestigious institutions. If you have received a scholarship or have been accepted into a top university, they may view you as a promising client and reduce your interest rate accordingly.
In conclusion, while obtaining an education loan with zero interest in India is not possible, there are many banks and NBFCs that offer loans at affordable interest rates. Planning ahead, building your credit score, and conducting thorough research to find the right lender may take time if you require a large loan in the future. Alternatively, you can also consider personal loans.
At MoneyView, we offer loans ranging from Rs.5,000 to Rs.5 Lakh, and the application process takes just 24 hours in most cases. To learn more, visit the MoneyView website or download the MoneyView app from the Playstore.
Education loans can be a helpful means to pursue higher education without worrying about finances. If you are looking for an education loan at a zero interest rate, read on to find out more.
Can I Obtain an Education Loan without Interest?
Unfortunately, it is not possible to obtain an education loan without any interest. Student loans, like any other credit product, come with an interest charge, which banks or lenders will apply.
However, education loans have their advantages, such as a moratorium period until the completion of studies. During this time, only simple interest will be charged on the loan amount, and you will need to pay only the interest during this period.
What are Education Loans?
Education loans are a type of term loan that is taken to fulfill educational needs. While primarily meant for higher education, they now also cover school fees.
The loan payments are usually made directly to the institution on a semester-wise basis. These loans are usually need-based and cover expenses such as tuition fees, cost of books, food and accommodation, lab and library fees, travel expenses, and study tour expenses.
In case the student does not meet the eligibility criteria, their guardian can take the loan on their behalf. The option of a secured or unsecured loan is available, which will determine the loan amount, interest rates, and tenure.
Which Banks Provide Interest-Free Education Loans?
In India, most banks and NBFCs (Non-Banking Financial Companies) offer various education loan schemes. While you may search for an education loan with zero interest, it is important to note that no bank in India offers interest-free education loans.
Below are some top banks and NBFCs that provide education loans:
1. State Bank of India
- Loan amount: Up to Rs.1.50 Crore
- Interest Rates: Range from 8.20% to 11.15%
2. HDFC Bank
- Loan amount: Up to Rs.150 Lakh
- Interest Rates: 9.50% onwards
3. ICICI Bank
- Loan amount: Up to Rs.2 Crore
- Interest Rates: 9.85% onwards
4. Axis Bank
- Loan amount: Up to Rs.50 Lakh
- Interest Rates: Range from 13.70% to 15.20%
5. IDFC First Bank
- Loan amount: Up to Rs.75 Lakh
- Interest Rates: Range from 9% to 15%
6. Avanse
- Loan amount: Rs.1 Lakh onwards
- Interest Rates: 14.24% onwards
7. HDFC Credila
- Loan amount: Depends on your requirement
- Interest Rates: Credila Benchmark Lending (current rate is 12.30%) + Depends on your credit profile, collateral offered, the course undertaken, etc.
8. Auxilo
- Loan amount: Depends on your requirement
- Interest Rates: 8% onwards
Please note that the numbers mentioned above are subject to change at the discretion of the lender.
How to Obtain Affordable Student Loans?
While obtaining zero interest loans for students is not possible, there are several ways to reduce your interest amount. Here are some strategies to get education loans at affordable interest rates:
1. Secured Education Loans
Consider opting for a secured education loan using your property or any other asset as collateral. This allows you to negotiate a higher loan amount and lower interest rate.
2. Subsidies and Schemes
The government and banks occasionally offer special subsidies and schemes. These may lower the interest rate or provide a subsidy on the interest amount, helping you secure a loan at a lower rate.
3. High Credit Score
Maintaining a higher credit score is beneficial when seeking an unsecured education loan. Lenders generally prefer applicants with a higher credit score, and it also gives you negotiating power over the interest rate.
4. Higher Margin
Paying a higher margin can help reduce the actual loan amount, making it more manageable for you in the future.
5. Prestigious Institutions
Lenders often prioritize applicants who have gained admission to affiliated or prestigious institutions. If you have received a scholarship or have been accepted into a top university, they may view you as a promising client and reduce your interest rate accordingly.
In conclusion, while obtaining an education loan with zero interest in India is not possible, there are many banks and NBFCs that offer loans at affordable interest rates. Planning ahead, building your credit score, and conducting thorough research to find the right lender may take time if you require a large loan in the future. Alternatively, you can also consider personal loans.
At MoneyView, we offer loans ranging from Rs.5,000 to Rs.5 Lakh, and the application process takes just 24 hours in most cases. To learn more, visit the MoneyView website or download the MoneyView app from the Playstore.
Author
Pluto Team
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