Over 110,000 Nepali youths have packed their bags, dreams, and dictionaries to study abroad for the past few years despite the daunting overseas fees. How? Two words: Education Loans.
Whether you’re aiming abroad or here in Nepal for quality higher education, unless you have a scholarship or a hidden stash of cash, you'll probably need a bank loan to bridge the gap.
But there are so many banks with competitive deals on education loans that promise to help you achieve your dreams. So, how do you find the best one, and what should you consider while doing so? Let’s explore.
An education loan is a collateral-based term loan that students or sponsors of the student can apply for in order to finance their higher education in Nepal or abroad. Using an education loan, you can pay off your educational fees, such as admission, tuition, books, equipment, travel, and living expenses, while you pursue a degree.
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Most banks in Nepal offer a moratorium (or grace) period ranging from six months to four years or the course duration, whichever is earlier. During this time, repayment isn’t mandatory.
In some banks, you don’t have to pay your EMIs immediately, as they will add the accrued interest to your loan balance and adjust your EMIs later. Meanwhile, others may require you to pay only the interest during the grace period.
While every bank promises to fund your higher education dreams, their processes and requirements can be quite different. And that’s the part that immensely impacts your wallet. So, here are the factors to consider when choosing the right education loan.
Interest rates can make or break your loan. So, ensure to compare the interest rates of all banks in Nepal to find the most affordable option.
Wait! Besides cheaper interest rates, you must check the type of interest; is it floating or fixed? Prefer stable EMI, go with a fixed rate, but don’t mind the potential unpredictability; floating is the one for you.
Typically, banks in Nepal offer education loans with tenures ranging from 1 to 15 years. Although a longer loan term means smaller EMIs, you pay more interest than in a shorter one.
Using the EMI calculator, you can plan and check how much EMI you will have to pay even before taking a loan. So, ensure to opt for a suitable loan term that neither burdens you with high EMIs nor high interest.
While you're at it, check if the bank offers flexible repayment options—like whether you need to start repaying immediately, or if repayment is deferred until you complete your course or secure a job.
Most banks in Nepal offer education loans up to NPR 10 million (Rs. 1 Crore), which is usually enough for tuition, travel, and living costs. However, some banks have a maximum limit of NPR 5 million, which might not be enough if you’re pursuing a high-end course that is significantly more costly. So, make sure the bank’s maximum amount for an education loan is enough to cover your total expenses.
Depending on the banks, processing fees are charged on education loans, ranging from 0.25% to 1% of the total loan amount. So, always ensure to check the processing charges and any other additional fees beforehand.
Each bank has its own set of education loan eligibility requirements. Some common criteria include being a Nepali citizen, minimum age, academic background, chosen course/institution, and financial stability of the student or sponsor.
Knowing these requirements up front will not only save you time and effort during the application process but also help you avoid having your loan application rejected.
Education loans are collateral-based term loans, so you must provide collateral that meets all of the bank's requirements to secure them. For instance, most Nepali banks have the following common conditions in the case of land as collateral:
Checking each factor like these can be overwhelming, as there are over 20 banks in Nepal offering promising educational loans. But don’t worry! Saral Banking Sewa is here to rescue you from all the hassle, as it has brought all the banks together in one place with easy-to-use comparison tools.
Now that you have a better understanding of education loans and what to look for, let’s break down some of the top banks in Nepal offering education loans with competitive interest rates.
Among 20 commercial banks in Nepal, Rastriya Banijya Bank (RBB) is the best bank for education loans with the cheapest floating interest rate of 6.14% to 7.14% for the month of Baisakh 2082. Following RBB, Global IME, Everest, and Siddhartha Bank have the interest rates of 6.38%, 6.45%, and 6.53%, respectively.
On the other hand, almost every bank has a similar fixed interest rate of 10% for an education loan with terms up to 5 years.
| Bank | Interest Rate | Tenure | Processing Fee | |
| Floating | Fixed | |||
| Rastriya Banijya Bank | 6.14% to 7.14% | 10% | Up to 5 Years | 0.75% |
| Global IME | 6.38% to 9.88% | 11.99% to 12.99% | Under 5 Years | 0.75% |
| 12.99% to 13.99% | Above 5 Years | |||
| Everest Bank | 6.45% to 8.45% | 11.99% | Up to 7 Years | 0.75% |
| Siddhartha Bank | 6.53% to 9.78% | 10.25% | Under 5 Years | 0.75% |
| 10.75% | Above 5 Years | |||
| Citizens Bank | 6.76% to 9.76% | 10.50% | Under 5 Years | 0.75% |
| 11% | For 6 to 10 Years | |||
| 11.50% | For 11 to 15 Years | |||
| Prime Commercial Bank | 6.9% to 11.9% | 10% to 12% | - | 0.75% |
| Machhapuchchhre Bank | 7.52% to 9.52% | 10.00% | Under 5 Years | 0.75% |
| 11.00% | For 6 to 10 Years | |||
| 11.50% | For 11 to 15 Years | |||
| ADBL | 8.35% to 9.35% | 10.65% | - | 0.75% |
| Himalayan Bank | 9.3% to 10.8% | 9.50% | Up to 7 Years | 0.75% |
You can check other banks’ educational loan offers in our Saral Banking Sewa’s education loan comparison tool.
Despite the ever-rising tuition fees and living expenses, educational loans have helped numerous Nepali students bridge the financial gap, allowing them to achieve their higher education dreams.
While every bank claims to offer the best educational loan for your needs, banks like Rastriya Banijya, Global IME, Everest, and Siddhartha remain the best because they offer cheaper interest rates and flexible loan terms.
So, before making any decisions, always do thorough research and compare each financial product of banks at Saral Banking Sewa to get the best deal every time.
