UBI vs SBI Education Loan: Interest Rates, Limits & Key Differences

When choosing between Union Bank of India (UBI) and State Bank of India (SBI) for education loans, here is what you need to know.

Note: Union Bank of India absorbed Corporation Bank and Andhra Bank in 2020 and continues to operate as a single entity under the UBI brand.

All interest rates, loan limits, and fee figures cited in this article are as of 2025-26 and subject to change. Always verify current terms directly with the bank before applying.

Comparing SBI and UBI Education Loans: Quick Snapshot

Here is a quick glance at how Union Bank of India (UBI) and State Bank of India (SBI) compare on education loans (all figures as of 2025-26; verify with the bank):

*All figures indicative as of 2025-26; subject to change. Verify with the bank before applying.

While SBI allows higher loan limits, UBI offers a longer moratorium period and in many cases faster processing, making it ideal for students who value flexibility and speed.

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UBI vs SBI: Loan Limits

Understanding how much funding each bank offers is crucial. Both banks provide competitive loan limits depending on your course, country of study, and whether you have collateral.

Union Bank of India (UBI)

• Unsecured education loans up to ~₹40 lakh without collateral.
• Secured loans available at higher limits, particularly for international education.
• For abroad studies, UBI provides up to ~₹150 lakh through its Premier Abroad scheme.

State Bank of India (SBI)

• Unsecured loans up to ~₹50 lakh without collateral.
• Secured loans up to ~₹3 crore depending on course and co-applicant profile.
• For international students, SBI’s Global Ed-Vantage scheme offers loans up to ~₹3 crore.

All loan limit figures are indicative as of 2025-26 and subject to change. Verify with the bank before applying.

Interest Rate Comparison

Both banks offer floating interest rates linked to the External Benchmark Rate (EBR). Small rate differences can significantly affect total repayment over a 10–15-year tenure.

SBI offers multiple schemes: PM-Vidyalaxmi rates start at ~7.15% (Utkarsh), ~7.45% (Uttam), and ~8.65% (Uday). For regular loans, SBI charges ~10.15% for unsecured loans up to ₹7.5 lakhs and ~9.15% for secured loans above that.

UBI charges ~11.30% for loans up to ₹7.5 lakhs under CGFSEL. For top colleges, the rate is ~9.30%–10.80% for studying abroad and ~10.30%–10.80% for medical courses.

All rate figures are indicative as of 2025-26 and subject to change. Verify current rates with the bank before applying.

Gender-Based Concessions

Both banks provide a 0.50% interest rate reduction for female students across their education loan schemes. For example, under SBI unsecured loans, a rate of ~10.15% drops to ~9.65% for female applicants. Under UBI’s tiered structure for premier institutions, female students pay ~10.55% vs ~11.05% for male students.

Domestic vs Abroad Study Rates

For domestic education, SBI’s regular schemes start at ~9.15% with collateral, while UBI charges ~11.30% under CGFSEL. For abroad studies, SBI’s Global Ed-Vantage Scheme offers ~9.15%, whereas UBI’s premier abroad schemes range from ~9.30% to ~10.80%. All figures as of 2025-26; verify with the bank.

Repayment Flexibility

Both SBI and UBI offer student-friendly repayment structures. SBI provides a 6-month moratorium after course completion or job placement (whichever is earlier), with total repayment tenure up to 15 years. UBI allows up to 15 years for repayment and offers a moratorium of course duration plus 12 months — helpful for students in fields like medicine or engineering where job placement may take time. Both banks allow early repayment without penalties.

Eligibility Criteria

Before applying, it is important to understand each bank’s eligibility requirements.

Academic Qualifications and Admission Requirements

Both UBI and SBI require students to have secured admission to a recognised institution. For overseas studies, relevant exam scores are needed. UBI typically restricts loans to courses within India unless applying under the Premier Abroad scheme, and requires an Indian passport for overseas applications. SBI supports a wide range of domestic and international programmes including medical, engineering, and management.

Co-Applicant Requirements and Income Criteria

UBI accepts a wider set of co-applicants (immediate and some extended family), while SBI allows only parents, guardians, or spouses. Both banks require a co-applicant income of at least ~₹30,000/month for unsecured loans (verify with the bank). UBI is more flexible with secured loans, accepting even retired professionals and farmers as co-applicants.

Age Limits and Professional Flexibility

UBI has no stated maximum age limit, making it viable for older students or professionals seeking further education. SBI typically has a maximum age limit of 35 years for education loan applicants (verify with the bank as this can vary by scheme).

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Secured vs Unsecured Education Loans

Unsecured Education Loans: No Collateral Needed

For students unable to provide collateral, unsecured loans are a practical option. SBI offers unsecured loans up to ~₹50 lakhs, while UBI provides up to ~₹40 lakhs. Interest rates vary slightly: SBI starts at ~9.65% and UBI begins at ~9.75% (as of 2025-26; verify with the bank). Note: UBI may limit unsecured loans to master’s programmes in certain schemes, while SBI extends this option to students across all programmes.

Secured Education Loans: Higher Limits with Collateral

If you can offer collateral, both banks increase their loan limits significantly. SBI allows secured loans up to ~₹3 crores, which is roughly double UBI’s ~₹1.5 crores. UBI requires collateral valued at a minimum of 50% of the loan amount plus accrued interest and provides a 0.50% interest concession if collateral covers 100% or more of the loan amount.

Collateral Options and Acceptable Securities

UBI accepts a broad range of securities including buildings, government securities, public sector bonds, UTI units, NSC, KVP, life insurance policies, gold, and bank deposits. SBI’s Global Ed-Vantage Scheme offers collateral-free loans of up to ~₹50 lakhs for students attending select premier institutions. Collateral can be owned by the borrower, co-borrower, immediate family, or third parties with necessary guarantees.

Special Schemes for Premier Institutions

SBI’s Scholar Loan Scheme is designed for students of premier institutions — it offers 100% financing with no processing fee and lower interest rates (~8.15%–88.90% for premier institutions in India; verify current rates with SBI).

Required Documents for Education Loans

Both UBI and SBI require similar documentation. Submitting complete and accurate documents speeds up the verification process.

Student KYC and Identity Documents

Both banks require KYC documents: Aadhaar, PAN, and passport-sized photos. For abroad studies, SBI mandates a passport, while UBI treats it as optional for domestic loans. Academic records (10th/12th mark sheets and relevant entrance exam scores) with admission proof are required by both.

Admission and Course-Related Documents

An admission letter or offer letter from your chosen institution is required by both banks. For international studies, the offer letter should outline course details and fee structure.

Co-Applicant Income and Financial Documents

Your co-applicant (usually a parent or guardian) must provide proof of income. For salaried individuals: salary certificate, Form 16, and bank statements. Self-employed co-applicants need income tax returns or equivalent documents.

Collateral Documentation for Secured Loans

For secured loans: property documents such as sale deeds, title documents, and valuation reports. Both banks allow digital submission, but originals must be verified before disbursement.

Processing Time and Fees

*Indicative as of 2025-26; verify with the bank.

Processing Fees

UBI: Standard processing fee of ~₹10,000 + GST. Students opting for the "Union Education Loan: Empowering Aspirations" scheme may benefit from zero processing fees (verify current scheme terms with the bank).

SBI: Fees vary by loan type and amount. Visit your nearest SBI branch or the bank website for the latest figures.

Moratorium Period Rules

The moratorium period determines when you need to start repaying your loan, giving students time to complete their studies and secure employment before EMIs begin.

Interest Accumulation and Total Loan Cost

Interest continues to accumulate during the moratorium even without EMI payments. If you opt for a full moratorium, accrued interest is added to the principal, increasing total repayment through compounding. Repayment options during moratorium include:

• Full Moratorium: No payments during the grace period.
• Simple Interest Payments: Pay only the interest to prevent compounding.
• Partial Simple Interest Payments: Pay a portion of the interest.
• Early EMI Payments: Begin full repayment early if financially feasible.

UBI’s longer 12-month post-course moratorium can benefit students in fields like medicine or engineering where job placement takes longer. Paying simple interest during this period helps lower total costs.

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Best Bank for Abroad Studies

Both UBI and SBI offer solutions tailored to international education, but differ in key areas.

Coverage for Tuition and Living Expenses

Both banks cover essential costs including tuition fees, living expenses, and visa-related charges. Interest rates vary based on whether your university is listed (as of 2025-26; verify with the bank):

*Indicative as of 2025-26; verify with the bank.

Forex and Currency Exchange Considerations

Both banks disburse loans in INR. You will need to account for forex charges when converting funds for tuition or living expenses. Currency fluctuations during repayment can impact total cost.

Embassy Compliance and Documentation Support

Both banks provide support for visa and embassy requirements. SBI offers a distinct advantage by sanctioning loans even before I-20 or visa approval, which can strengthen your visa application. Required documents typically include passport, admission letter, and proof of financial capacity.

Making the Right Choice

If your funding needs exceed ₹40 lakhs, SBI is the better option due to its higher unsecured loan limit. If you prefer a longer moratorium period or are attending a recognised international university with a lower listed-university rate, UBI could be a better fit. Weigh your priorities carefully — both banks provide strong support for students pursuing international education.

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