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MBA loan: Comparison Public Sector Banks with Private Banks

Are you thinking about how to fund your MBA after you receive the most aspired letter of admission from your favorite B – School? Taking en Education Loan is one of the most feasible options, but making the choice of banks from where you can take the loan is a big question. 

There are certain factors which you need to keep in mind while choosing the bank for your loan like low Interest Rate, no prepayment penalty, minimum or no collateral required and flexible repayment options etc.

The initial choice you face is whether to choose Public sector bank or private bank. Some of the most popular nationalized banks include State Bank of India, Punjab National Bank, Bank of India etc. and some of the popular private banks of India are ICICI Bank, Axis Bank, HDFC Bank.

Following factors should be kept in mind while taking loan from the bank.

Nationalized banks are more secure: Nationalized banks are more secure as they are controlled by the government. The interest rates are approved by the Reserve Bank of India. Hence they are more trust worthy than the private sector banks. 
Private Banks operate in a more hassle free manner: It is said that the private sector banks act in a much hassle free manner than the nationalized banks. It may take a long time to get your loans sanctioned in a nationalized bank, but in a privatized bank the process takes place in a relatively short span of time and in a hassle free manner. 

Nationalized banks offer less interest rate: This is a well known and common fact that the interest rates of the nationalized banks are lower than that of the private sector banks. That is one of the reasons why many loan seekers choose nationalized banks over the private sector. 
This is evident if you look at the interest rates of Axis Bank and State Bank of India. The interest rate of Axis Bank for the education loan of Rs. 4 lakh to Rs. 10 lakh is 14.75, 16.75; whereas that of State Bank of India is 12.50, 13.50. 
Let us compare some more interest rates among the leading nationalized and privatized banks:

Private banks are more customer friendly: The private sector banks are fast in their approach and service. They have a dedicated customer support service which answers to all the customer queries and qualms throughout the day. On the other hand, the nationalized banks are not that effective in dealing with the customer care services. It’s generally a long process to communicate something, be it a complaint or a suggestion to the authorities of the nationalized banks. 

No matter how much arguments one do, you have to make the decision yourself, as you will be the one responsible for taking the loan, as well as repaying. So before making such an investment, you will have to check all the factors, pros and cons of both the sectors, and then about the individual banks. Remember, when it comes to money, trust is the most important factor and you can reap the fruits of the seeds of your trust in the years to come. All the Best.