SBI Expands Collateral-Free Education Loan Limit for International Studies

State Bank of India (SBI) has taken a transformative step to make overseas education more accessible for Indian students. The bank has raised the limit for collateral-free education loans under its Global Ed-Vantage scheme, a move aimed at reducing financial barriers for students aspiring to study at prestigious global institutions.

Overview of the SBI Global Ed-Vantage Scheme

The SBI Global Ed-Vantage program is tailored to support students pursuing full-time courses at universities abroad. This revamped offering allows eligible students to secure loans up to ₹50 lakh without the need to pledge any collateral, covering a wide array of expenses associated with higher education.

Key Features of the Scheme

1. Collateral-Free Loans
   Students can avail themselves of up to ₹50 lakh without pledging any security, a feature applicable to select institutions globally.
2. Extended Repayment Period
   The loan tenure has been designed to ease repayment pressures, allowing up to 15 years for repayment through manageable EMIs.
3. Pre-Approval Before Visa
   Students can secure loan approval even before obtaining their Form I-20 or visa, ensuring seamless financial readiness.
4. Tax Benefits
   Borrowers can claim deductions on interest payments under Section 80(E) of the Income Tax Act, providing additional financial relief.
5. Comprehensive Expense Coverage
   The scheme includes coverage for tuition fees, hostel charges, travel expenses, library and laboratory fees, books, study tours, and more.
6. Simple Interest Rates and Processing Fees
   The interest rate for loans between ₹7.5 lakh and ₹50 lakh stands at 10.15%, with a one-time processing fee of ₹10,000.

Impact on Students and Families

This initiative is being hailed as a significant enabler for middle-income families, opening doors to elite universities such as MIT, Harvard, and Oxford. With over 1.3 million Indian students pursuing education abroad in 2023, according to the Indian Students Mobility Report 2024, this move is set to benefit a large segment of the population.

Experts in the field, like Ankit Mehra of GyanDhan, consider this a progressive step that bridges the gap in education financing. He noted that the lower interest rates and relaxed collateral requirements would encourage students to shift from expensive non-banking financial companies (NBFCs) to SBI’s more affordable offerings.

Saurabh Arora, CEO of University Living, highlighted how the initiative ensures accessibility through its expansive coverage of expenses and repayment flexibility. Similarly, Rahul Subramaniam of Athena Education praised SBI’s focus on reducing the financial strain for families aspiring for international education.

Conclusion

SBI’s decision to enhance the Global Ed-Vantage loan scheme marks a pivotal moment for Indian students aiming to study abroad. By addressing major financial concerns and providing extensive support, the initiative empowers students to focus on their academic goals without the burden of financial stress. This development reinforces SBI’s position as a leader in educational financing and sets a new benchmark for other institutions to follow.