Education Loans Beyond SBI: PNB, Bank of Baroda, Canara and Union Bank

SBI Is The Default. It Is Not The Only Option.#

Most families begin and end their search at the State Bank of India. It is the biggest lender, the branch is nearby, and everyone knows someone who took a loan there. That is a perfectly reasonable place to start, but it is a poor place to stop, because other public sector banks compete hard for education borrowers and some of their products fit particular students better.

A student at a listed premier institution may find a lower rate and a bigger collateral-free limit at Canara. A student heading to a top foreign university may prefer Bank of Baroda's structure. A family with property to pledge may find PNB's terms straightforward, and Union Bank casts one of the widest nets under the government's PM-Vidyalaxmi scheme.

This guide compares four of them: Canara Bank, Bank of Baroda, Punjab National Bank (PNB) and Union Bank of India. I read Canara's, Bank of Baroda's and Union Bank's own product pages, SBI's rate card for comparison, and a comparison-site summary for PNB, whose own pages gave little detail. I have flagged what is from the bank and what is second-hand.

Background: The Frame All Public Sector Banks Share#

Public sector banks follow a common template, the Indian Banks' Association (IBA) Model Education Loan Scheme, and then add their own schemes on top. Knowing the template makes every product page easier to read.

Security bands. Under the model, loans up to ₹4 lakh need only the co-obligation of a parent, meaning the parent signs the loan alongside the student. Between ₹4 lakh and ₹7.5 lakh, banks traditionally want a third-party guarantee as well, though they may waive it. Above ₹7.5 lakh, tangible collateral of suitable value is expected.

Margin. The share of the cost you must fund yourself. Under the model, nil up to ₹4 lakh, then 5 per cent for courses in India and 15 per cent for study abroad.

Moratorium. The course period plus one year, or six months after a job, whichever is earlier.

Floating rates. Most public sector education loan rates are tied to a benchmark, and the bank adds a spread. Since the RBI's repo rate is the usual benchmark, your rate moves when it does.

Premier institution schemes. These are the exceptions to the collateral bands. For students at listed institutions, banks waive security up to a higher limit and charge lower rates.

PM-Vidyalaxmi. A central government scheme in which participating banks offer collateral-free, guarantor-free loans, with interest subvention for lower-income families, to students admitted on merit to institutions on the government's quality list.

Here is how the four banks compare on the main features. Figures are from the banks' own pages unless marked as reported by a comparison site.

Canara Bank: Vidya Turant#

What it is. A scheme for students at premier institutions, and Canara's answer to the question "how do I lend without collateral and still sleep at night?" The bank takes an assignment of the student's future income instead of property.

The terms, from Canara's own page. Rate from 6.85 per cent, subject to conditions. Collateral-free and guarantor-free at any amount within the cap. Limits of ₹50 lakh for Category A institutions (which include ISB Hyderabad and ISB Mohali), ₹40 lakh for Category B (67 institutes) and ₹30 lakh for Category C (134 institutes). No margin, with scholarships counted where they exist. A moratorium of the course plus one year and repayment of up to 15 years after that, with no prepayment penalty.

The limits. It is for courses in India only. You must be an Indian national who has cleared the qualifying exam, been selected through an entrance test by a competent authority and secured admission to an eligible institution. The bank's institution list is published as a downloadable document, so check where your college sits.

Beyond Vidya Turant. Canara also runs general education loans for other institutions and courses. Comparison sites report rates of roughly 8.6 to 12.5 per cent for these, which is a wide range. Ask the branch for the exact figure for your profile and amount.

Best for. A student at a listed institution who wants a low rate without pledging the family home.

Bank of Baroda: Baroda Scholar#

What it is. A scheme for higher education in India and abroad, with better terms for "premier" institutions and larger amounts than most.

Rates, from the bank's page. Floating and repo-linked, quoted as spreads over the bank's own benchmark, the BRLLR: the benchmark plus 0.55 per cent for premier institutions, plus 2.00 per cent for other institutions on loans up to ₹7.5 lakh, and plus 1.05 per cent above that. There are fixed-rate options too. I could not confirm the benchmark's current value from the page, so ask the branch for today's figure. Some comparison sites quote flat rates of 9.5 to 11 per cent, but they read as older or rougher figures.

Limits. Up to ₹1.5 crore at premier institutions and ₹60 lakh at non-premier ones.

Security. A tiered structure. Up to ₹4 lakh: parent co-obligation, no security. From ₹4 lakh to ₹7.5 lakh: third-party guarantee and assignment of future income. From ₹7.5 lakh to ₹80 lakh: tangible collateral worth the full loan amount. Above ₹80 lakh: collateral worth 1.25 times the loan.

Margin. Nil up to ₹4 lakh, 15 per cent from ₹4 lakh to ₹7.5 lakh, and above that nil for premier institutions and 10 per cent for non-premier ones.

Moratorium and repayment. The course plus one year, then 10 to 15 years, with a cap of 120 instalments for loans up to ₹7.5 lakh and 180 for larger ones.

Fees and concessions. No processing fee up to ₹7.5 lakh. Above that, 1 per cent capped at ₹10,000, and refunded for premier institutions. Girl students get a 0.20 per cent concession at non-premier institutions only, which is smaller than SBI's 0.50 per cent.

Reported, not confirmed on the bank's page. One comparison summary says the bank offers up to ₹30 lakh without collateral to students at the top IIMs and XLRI. Ask for it in writing if you rely on it.

Best for. Students going abroad or to a premier institution who need a large loan, and who can offer collateral for the higher tiers.

Punjab National Bank: Saraswati And Udaan#

PNB's own website lists Saraswati, Digital Education Loan, Pratibha and Kaushal as education products, but the pages I could reach did not give rates or limits. The figures below come from a comparison site, BankBazaar, dated 2026, so treat them as indicative and confirm with the bank.

PNB Saraswati is the main product for courses in India. Reported floating rates run from 8.85 to 10.10 per cent, with fixed rates from 9.85 to 11.60 per cent. Margin is nil up to ₹4 lakh and 5 per cent above. A moratorium of the course period plus one year applies. Loans above ₹7.5 lakh need full collateral.

PNB Udaan is for study abroad. Reported floating rates are from 8.10 to 10.10 per cent, and fixed rates from 9.10 to 11.60 per cent. Margin is nil up to ₹4 lakh and 15 per cent above. Loans above ₹7.5 lakh again need full security. No maximum is stated, with lending based on need.

What is missing. Neither summary listed concessions or processing fees. If a concession exists for girl students or for interest paid during the course, ask about it.

Best for. Families with property to offer who prefer a conventional secured loan and want a branch-based process.

Union Bank: A Wide Net Under PM-Vidyalaxmi, And Abroad Schemes#

PM-Vidyalaxmi at Union Bank. From the bank's page: no ceiling on the amount, no collateral and no guarantee, covering institutes the bank counts as 1,425 across all courses, including IIMs, IITs, IIITs and NITs. Interest subvention is 100 per cent of interest during the moratorium for family income below ₹4.5 lakh and 3 per cent for income between ₹4.5 lakh and ₹8 lakh. A 75 per cent credit guarantee applies up to ₹7.5 lakh. The page says payment reaches the education loan account digitally through CBDC mode, which is the government's digital rupee. The page does not state the processing fee, moratorium or margin.

Other schemes. Comparison sites report Union Bank rates from about 7.85 to 11.85 per cent depending on scheme, with unsecured foreign-study loans starting at about 8.75 per cent and collateral-free loans up to ₹40 lakh for students at Category A premier institutions abroad. Different sites quote different ranges, so ask the bank for a written figure. A 0.50 per cent concession for women is also reported.

A note on the count. The government's original PM-Vidyalaxmi list had 860 institutions for 2024-25, and banks now quote higher counts, since the list is updated yearly. Check the live list rather than relying on any single figure.

Best for. A student admitted on merit to a listed institution who wants collateral-free borrowing without a fixed ceiling.

Choosing Among Them#

Start with your seat, not the bank. Ask which of these lists your institution is on. If it is on Canara's premier list, compare Vidya Turant with SBI's Scholar Loan. If it is on the PM-Vidyalaxmi list, apply through the portal to several banks at once.

Compare the total cost, not the headline rate. Fees, margin requirements, the benchmark's spread and the treatment of moratorium interest can outweigh a small rate difference.

Look at collateral honestly. A collateral-free loan protects the family home, but it has a cap. A secured loan can be larger, and the cost of pledging property is the risk to it.

Get written sanctions from two banks. The PM-Vidyalaxmi portal lets you send one application to several lenders. Verbal quotes at a counter are indicative, and a written offer from one bank is real leverage at another.

Frequently Asked Questions#

Which public sector bank has the lowest education loan rate?

Canara's Vidya Turant starts at 6.85 per cent and SBI's Scholar Loan and PM-Vidyalaxmi tiers start at 6.90 per cent, all for listed institutions. Your own rate depends on your institution, the loan size and whether you offer collateral.

Does Canara Bank give an education loan without collateral?

Yes, under Vidya Turant, which is collateral-free and guarantor-free up to ₹50 lakh, ₹40 lakh or ₹30 lakh depending on the institution's category. It is for courses in India only.

How much education loan does Bank of Baroda give?

Up to ₹1.5 crore for premier institutions and ₹60 lakh for other institutions under Baroda Scholar. Collateral is required above ₹7.5 lakh, and above ₹80 lakh it must be worth 1.25 times the loan.

What is the difference between PNB Saraswati and PNB Udaan?

Saraswati is for study in India and Udaan is for study abroad, according to comparison sites. Reported margins are 5 per cent above ₹4 lakh for Saraswati and 15 per cent for Udaan, with full collateral above ₹7.5 lakh for both. Confirm with the bank.

Does Union Bank offer PM-Vidyalaxmi loans?

Yes. Its page describes no ceiling, no collateral and no guarantee for students at covered institutions, with interest subvention for family incomes up to ₹8 lakh. Check that your institute is on the list.

Can I apply to more than one bank?

Yes. The PM-Vidyalaxmi portal lets you send a single application to several lenders, and you can accept the best offer. Compare written sanction letters, not verbal quotes.

Are these rates fixed or floating?

Mostly floating, linked to a benchmark such as the repo rate, though some banks offer fixed options at higher starting rates. A floating rate can move over a long repayment, so test your budget at a rate two points higher than the quote.

Terms were read on 26 September 2026 from Canara Bank's Vidya Turant page, Bank of Baroda's Baroda Scholar page, Union Bank's PM-Vidyalaxmi page and SBI's rate card, plus a BankBazaar summary for PNB and Union Bank's other schemes, marked above. Rates and limits change, so confirm them with the bank before you apply.