Finding the right education loan can save you big in the long run. Even a tiny 0.5% difference in interest rate can mean thousands of rupees more (or less) during repayment.

In India, students have plenty of choices, public banks usually offer lower interest rates, while private banks and NBFCs give faster approvals and more flexibility. For those planning to study abroad, picking the right loan is even more important since it shapes how much debt you’ll carry into your career.

In this blog, we’ll break down the key factors that affect loan costs, compare the cheapest options, and help you find the lender that fits your study abroad journey best.

📌Key Factors That Determine Your Loan’s Affordability

Before comparing banks, here’s what actually makes a loan “cheap” or “expensive”:

• Interest Rate (ROI – Rate of Interest): The most obvious factor. Lower ROI = lower overall cost.
• Processing Fees: Some banks charge 1–2% of the loan amount upfront.
• Loan Insurance: Mandatory with certain lenders and adds to your total cost.
• Repayment Terms: Longer tenure reduces EMI pressure but increases total interest paid.
• Moratorium Benefits: Whether repayment starts after graduation or during the study period.

📊 Loan Affordability Breakdown

Here’s a quick snapshot of how much weight each factor typically carries in determining the true cost of your education loan:

Together, these decide how much your loan really costs—not just what’s written on the brochure.

🎓Cheapest Education Loans in India

Now let’s see which lenders actually offer the cheapest loans for studying abroad:

a) Public Sector Banks (PSUs)

Public banks usually offer the lowest interest rates, making them the first choice for many students.

State Bank of India (SBI) – Global Ed-Vantage Scheme

• Interest Rate: 9.15% – 10% (extra concessions for female students)
• Loan Amount: Up to ₹1.5 crore
• Repayment Tenure: Up to 15 years
•  Pros: Lowest ROI, longest repayment, government-backed trust
•  Cons: Slower processing, more paperwork

Bank of Baroda – Baroda Scholar Loan

• Interest Rate: 9.25% – 9.85%
• Loan Amount: Up to ₹80 lakh (without collateral in some cases)
• Pros: Lower than average ROI, wide course coverage
• Cons: Collateral needed for bigger amounts

Punjab National Bank (PNB) – Udaan

• Interest Rate: 9.55% onwards
• Loan Amount: Up to ₹1 crore
• Pros: Affordable ROI, transparent terms
• Cons: Strict eligibility checks

b) Private Sector Banks

Private banks are faster and easier, but their interest rates are higher.

Axis Bank Education Loan

• Interest Rate: 10.5% onwards
• Loan Amount: Up to ₹75 lakh
• Pros: Fast disbursal, minimal paperwork
• Cons: Higher ROI vs PSUs

ICICI Bank Education Loan

• Interest Rate: 10.75% onwards
• Pros: Quick approval, flexible repayment
• Cons: Higher ROI compared to SBI/BoB

 c) Non-Banking Financial Companies (NBFCs)

NBFCs are more flexible, especially for students going abroad.

HDFC Credila

• Interest Rate: 11% onwards
• Pros: Covers 100% cost (tuition, living, travel, laptops)
• Cons: Higher ROI than banks

Avanse

• Interest Rate: 11.5% onwards
• Pros: Tailored for abroad studies, transparent terms
•  Cons: Higher ROI

InCred

• Interest Rate: 11.5% onwards
• Pros: No strict collateral, fast approvals
• Cons: ROI higher than PSU banks

 d) International Lenders (e.g., Prodigy Finance)

• Interest Rate: 11% – 13% (depends on program & country)
• Pros: No collateral, no co-signer required
• Cons: Currency fluctuations can make repayment heavier

👉 Quick Takeaway:

If you want lowest cost → choose Public Sector Banks (SBI, BoB).

If you want speed & flexibility → go with Private Banks/NBFCs.

If you want no collateral/co-signer → explore International Lenders.

📊Comparing the Rates at a Glance

Here’s how different banks and lenders stack up based on points scored across key factors like interest rates, processing fees, repayment flexibility, and approval speed.

• Public Sector Banks – SBI and Bank of Baroda consistently offer the lowest interest rates.
• PNB – Slightly higher than SBI/BoB but still affordable and transparent.
• Private Banks – Axis and ICICI provide faster processing but at a higher cost.
• NBFCs (HDFC Credila, Avanse, InCred) – Flexible options but usually the most expensive.
• International Lenders (Prodigy Finance, etc.) – Good for students without collateral, but currency risks make them pricier.

👉 From this comparison, it’s clear that Public Sector Banks (especially SBI & BoB) consistently offer the cheapest education loans in India.

📊How to Choose the Right Option

• If you want the lowest interest rate → Go for SBI or Bank of Baroda.
• If you want faster approvals → Consider Axis or ICICI Bank.
• If you don’t have collateral → NBFCs like HDFC Credila or international lenders like Prodigy Finance can help.

Conclusion

Choosing the cheapest education loan in India is not just about saving money—it’s about setting yourself up for financial stability as you chase your study abroad dream.. Ultimately, the best option depends on your financial background, need for collateral, and urgency of funding.

At Inforens, we make this journey easier for you. We offer students the cheapest loan options in the market, along with:

💰 Zero Processing Fees

⚡ Fast Approvals aligned with admission deadlines

So, whether you’re heading to the USA, UK, Canada, or beyond, Inforens ensures you get the best deal to fund your education abroad.

👉 Start your application today with Inforens and unlock your global journey stress-free.

Note : The general trends and core advice in the blog post are accurate: Public Sector Banks are generally the cheapest, while private banks and NBFCs offer more speed and flexibility at a higher cost. However, the specific figures for interest rates and loan amounts are subject to frequent change. For the most accurate and up-to-date information, students should always check the official websites or contact the lenders directly.