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Molay Ghosh@MReviews
Jun 15, 2016 06:28 PM, 3177 Views
(Updated Jun 15, 2016)
To go for Nationalised Banks or Private Banks?

Student Loans are provided by almost all banks, both nationalised as well as private. They are provided for a variety of studies. However, the main-stream studies are preferred by most banks eg doctor, engineer, mba etc.


It is always better to take a student loan from a nationalised bank as not only their interest rates are low, but the terms of repayment are also very favourable.


Interest charged by the nationalised banks are at least 50 bps less than those charged by the private banks. Normally the repayment starts 6-9 months after you have completed the course. This is known as the holiday period. Again, national banks provide you with longer holiday period. Also in case you are not able to complete the course within the stipulated time, nationalised banks are more flexible in that regards.


Normally the repayment period varies between 5-7 years depending on the amount of loan taken. Nationalised banks do not charge you in case you want to do pre-payment and close the loan before tenure. This a great advantage. In fact, some banks also allow you to make part-payments to your loan without any charge.


The one thing that you need to be aware of is the institute from which you are going to pursue your study. Normally banks have a list of institutes for which they provide loans, and they also categorise them as A, B, C etc. The higher the rating of your institute the better are the terms with regards to max loan amount, interest rate etc. In fact, if your institute is not part of the list, then the bank may not provide you with a loan. This is done to discourage fly-by-the-night institute to treat this as a money-making business and dupe students. Thus you need to be careful while selecting your institute.


Hope you found this article useful.

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