Bank of Maharashtra Education Loan Vs. Bank of Baroda for Abroad Studies

When it comes to financing higher education abroad, selecting the right bank for an education loan is a critical decision. Among the prominent options available to Indian students, the Bank of Maharashtra and the Bank of Baroda stand out as Leading Nationalized Banks offering competitive education loan schemes for overseas studies. Both banks have a strong portfolio catering to students' financial needs, but there are distinct differences in their offerings.

This article will compare these two banks across various critical factors to help loan applicants make an informed decision. So, if you are looking forward to taking a foreign education loan, then this article is for you. Keep reading to find out what each of these top banks has to offer.

Comparing Bank of Maharashtra & Bank of Baroda

1. Maximum Loan Amount

Bank of Maharashtra: The bank offers secured education loans up to INR 1.5 Crores for studying abroad. This amount can cover tuition fees, accommodation, travel expenses, and other study-related costs.

Bank of Baroda: Bank of Baroda provides a loan amount of up to INR 1.5 Crores for their Prime Listed Universities and up to 60 lakhs for Non-Prime Listed Universities. This substantial funding ensures that students can manage all their expenses without financial stress, especially for courses in countries with higher tuition fees and living costs like the USA, UK, and Australia.

2. Interest Rates

Bank of Maharashtra: The interest rates for overseas education loans start from 10.5%, depending on the loan amount and the applicant’s credit profile. The bank offers a slight concession on interest rates for female students.

Bank of Baroda: The Bank of Baroda offers competitive interest rates starting from 9.75% which are often lower than those of Bank of Maharashtra. Additionally, the bank provides a 0.5% concession on interest rates for female students.

3. Acceptable Collateral Security & Requirement

Bank of Maharashtra: For loans above INR 7.5 lakhs, collateral security is mandatory for Bank of Maharashtra Education Loan. Acceptable collateral can include immovable property, fixed deposits, or any other liquid assets.

Bank of Baroda: Similar to Bank of Maharashtra, collateral is required for loans exceeding INR 7.5 lakhs. The types of acceptable collateral include residential property, fixed deposits, and life insurance policies.

4. Eligible Loan Co-applicants

Bank of Maharashtra: Eligible co-applicants can include Parents, Siblings, Spouse, or Parents-in-law. The co-applicant’s income and creditworthiness are crucial for loan approval.

Bank of Baroda: Co-applicants can be Parents, Guardians, or Siblings. The bank may also consider close relatives if the primary co-applicants are not available.

5. Loan Margin

Bank of Maharashtra: The bank typically requires a margin of 15%. This means the borrower must arrange 15% of the total expenses, while the bank finances the remaining 85%.

Bank of Baroda: The loan margin is 10% for studies abroad, ensuring that students contribute a portion of the expenses while the bank covers the rest.

6. Loan Processing Fees

Bank of Maharashtra: The processing fee is relatively nominal; at present it is INR 5000 depending on the loan amount. This fee is refundable after 3 months of loan processing.

Bank of Baroda: Bank of Baroda charges a processing fee of 10,000 plus GST. The bank occasionally waives processing fees for students who secure admission to top-tier universities.

7. Loan Processing Period

Bank of Maharashtra: The processing period can range from 10 to 15 days, depending on the complexity of the application and the completeness of the documentation provided.

Bank of Baroda: Bank of Baroda usually processes overseas education loans within 20 to 25 days, offering a slightly faster turnaround compared to Bank of Maharashtra.

8. Moratorium Period

Bank of Maharashtra: The moratorium period includes the course duration plus an additional 6 months after course completion or 12 months after securing a job, whichever is earlier.

Bank of Baroda: The bank provides a moratorium period which consists of the course duration plus 1 year after gaining employment.

9. Repayment Period (Loan Tenure)

Bank of Maharashtra: The repayment period can extend up to 15 years, providing ample time for students to repay their loans comfortably. The bank also offers flexible repayment options, including step-up EMIs, to match the borrower's earning potential post-graduation.

Bank of Baroda: Bank of Baroda education loan for abroad offers a repayment tenure of up to 15 years as well, allowing for flexible and manageable repayment schedules. The bank provides options like EMI holidays and flexible EMI structures to accommodate the varying financial situations of borrowers.

These are all the key factors of comparison that you must know about the Bank of Maharashtra and the Bank of Baroda. As you have already read, both offer competitive education loan schemes with unique advantages. Ultimately, the choice depends on your individual financial needs and preferences.

Loan applicants should carefully evaluate these factors and possibly seek advice from financial experts to select the most suitable bank for their overseas education financing.