What percentage of my education loan will most public sector banks in India finance, and how much will I need to arrange myself?
Most public sector banks in India finance around 90 percent of your total education loan amount, leaving you to arrange the remaining 10 percent yourself. This gap is called the loan margin, and you should plan for it separately from your main loan sanction amount.
Most public sector banks in India fund about 90 percent of your total education cost, which means you need to arrange the remaining 10 percent yourself. This gap is known as the loan margin.
How Loan Margin Works
| Detail | Figure |
|---|---|
| Typical financing by public sector banks | 90 percent of total cost |
| Amount you arrange yourself | Remaining 10 percent |
Plan Around the Gap
Since banks rarely cover the full cost, factor this margin into your savings plan well before you apply. Exchange rate movements can also change the actual amount you receive at disbursement, so build in a small buffer beyond the bare minimum.
My Advice
Do not wait until your loan is sanctioned to discover you owe a 10 percent gap. Set this money aside early, ideally in the same currency you will need it in, so a sudden exchange rate shift does not leave you short right before disbursement.
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