Private Banks vs Public Sector Banks : A Comparison of Education Loans

Did you know there are more than 50 banks?

However, there’s a difference between public sector and private sector banks regarding education loans. Let’s compare.

Loan amount

The loan amount is usually restricted when it comes to public sector banks (PSUs). Private banks, on the other hand, offer higher amounts.

Interest rates

Public sector banks usually score on this front as they offer lower interest rates on education loans compared to private sector banks.

Collateral security

With PSUs, a collateral security and/or a guarantor is a must even for lower amounts.

Private sector banks offer higher collateral-free loans.

Charges

In some cases, private sector banks levy higher loan charges compared to PSUs. For instance, private banks levy a prepayment charge but PSUs don’t. 

Loan processing time

Private sector banks offer education loans much faster than public sector banks and also offer an online application facility for ease.

So, for higher collateral-free loans, choose private sector banks like the IDFC FIRST Bank which offers unsecured education loans up to Rs.50 lakhs.