In Bangladesh, getting a higher education can be costly for many students and families. Most educational institutions in Bangladesh are suffering from several issues like inadequate budgets, expert teacher and equipment shortages, and above all, poor educational standards which have made the students more eager to receive higher education abroad. Although well-off families in Bangladesh can support their children to choose that path, most students from middle-class families can’t afford this opportunity. Therefore, many of them rely on student loans to finance their studies.
For students, it’s one of the most important tools to pursue their educational goals. Currently, these loans are being offered by a variety of financial institutions in Bangladesh. However, students and their families should be aware of the responsibilities and obligations that come with taking out a loan, and should only borrow what they need and can realistically repay. Furthermore, the student loan process in Bangladesh can be confusing and time-consuming, so it’s important for students to do their own research and understand the different options available to them.
Student Loans in Bangladesh
Due to a lack of funding, a significant portion of Bangladeshi students can’t complete their higher studies. In this way, student loans are like a financial safety net for students who wish to succeed in life. Banks in Bangladesh generally offer education loans for undergraduate and postgraduate programs. Similar to other bank loans, student loans or education loans also work the same way. Depending on the Bank, a student can borrow BDT 5 lac to BDT 20 lac for further education with the repayment period of this loan ranging from 1 year to 5 years. To make the loan easier to repay for students, the majority of Banks in Bangladesh provide affordable interest on loans.
Any Bangladeshi national student can apply for the loan who has excellent results in SSC/HSC/O-level/A-level or equivalent from any recognized educational institution. While applying for the loan, banks will ask for several documents like the bio-data of the student and their guardian, the personal net worth of the guardian, the applicant’s passport, the profile of the educational institution, etc.
However, these loan plans are mostly based on the income of the applicant’s parents or legal guardian. Most banks need security or a promise that the loans will be paid back. Most of the time, a student can get an education loan if they have a security deposit or if their parents have a steady income of at least Tk 25,000 per month. According to The Financial Express, Bank Officials admit that this is one of the biggest problems that most potential students face when they are trying to finance their education. Most of the time, the parents’ income doesn’t meet the requirements, so their applications are turned down.
However, in the last few years, the per capita income of the people of Bangladesh has increased and the people of the country are now more self-reliant than before. As a result, it is now possible for almost everyone to meet the minimum monthly income requirements set by the bank. As a result, like developed countries, the tendency of students to go abroad for higher education with student loans has increased in Bangladesh.
Top Banks for Student Loan In Bangladesh
In Bangladesh, almost all banks offer educational loans for undergraduate and postgraduate programs both in Bangladesh and abroad to help students to pursue their dream. These banks also provide many lucrative offers to their customers. Here is a list of the Banks that provides student loans –
1. Agrani Bank
Agrani Bank, a government-run bank, offers the Agrani Education Scheme to help students achieve their higher education goals by providing loans. Typically, the bank offers up to BDT 20 lac under their student loan program with a 7% interest rate. However, the loan amount may vary depending on where the student wants to study. Agrani Bank typically provides education loans for a period of 5-10 years, with monthly installments ranging from BDT 500-10,000. To apply for a student loan, the student must fill out an application form available on the bank’s website or at a nearby branch. After submitting the form with photocopies of required documents such as student ID, passport, and photos of the applicant and nominee, the bank will review the application and approve the loan if the student is eligible.
2. Mercantile Bank
Mercantile bank, established in 1999, is one of the leading private banks in Bangladesh that offers various services across different industries. In 2016, they started offering education loans for students. They typically provide loans of up to BDT 5 lac for domestic higher education and up to BDT 20 lac for education abroad with a repayment period of 1 to 6 years. To be eligible for this loan, students must be between 18 and 26 years old, be Bangladeshi citizens, and must have SSC/HSC/O-level/A-level or equivalent education certificates. Additionally, the student’s parent or legal guardian must also be a joint applicant and sign the loan application. Once the loan is approved, the money can be used for costs such as tuition, educational materials, travel, housing, and other expenses related to education.
3. Shahjalal Islami Bank Limited
Shahjalal Islami Bank Limited (SIBL) is one of the first Islamic banks in Bangladesh and offers an attractive education loan program for students who want to further their studies in Bangladesh or abroad. SIBL is unique in that they have a set loan limit for each student, regardless of where they plan to study. Students can receive up to BDT 7 lac for a degree in Bangladesh or BDT 15 lac for a degree in another country. The interest rate is 14% per year, which is higher than other banks, but SIBL doesn’t charge a service fee, which can be an advantage. The repayment period is up to 60 months after the loan is received.
4. City Bank
Since the beginning of its journey in 1983, City Bank has become a very reputed bank in Bangladesh that has a “City Scholar” scheme that offers funding for higher studies both in Bangladesh and abroad. According to this scheme, students can get up to 95 percent of their fixed deposit as a student loan under a secured overdraft facility or a maximum of BDT 10 lac with zero collateral fee under an unsecured facility. The loan interest rate is much lower than other competing banks and the loan processing system of City Bank is also very fast. Also, like other banks, City Bank does not impose any strict conditions to spend this loan money on specific projects, rather this money can be spent for any educational purpose. With proper supporting documents, bank authorities issue these loans for any educational purpose, and a credible individual such as a legal guardian must be the guarantor to avail the loan.
5. Eastern Bank
Established in 1992, Eastern bank has developed a reputation for being one of the leading institutions in the private banking sector of Bangladesh, known for its high annual turnover and exceptional customer service. The bank’s student loan program is highly competitive compared to other private banks, with loan amounts ranging from BDT 1 lac to BDT 20 lac and a standard interest rate of 9% per year. However, unlike most banks, Eastern bank does not have a guardianship requirement for the loan. The loan repayment period is 1 year to 5 years, but there is a non-refundable 1% processing fee that is deducted from the original loan amount. Overall, Eastern bank can be a great choice for a quick and trustworthy banking experience for student loans.
6. One Bank
One bank, established in 1999, is a major player in the private banking sector of Bangladesh. They offer an education loan program, but with a unique twist. Instead of the student applying for the loan, a parent or guardian must apply on their behalf. The minimum income requirement for a salaried guardian ranges from BDT 25 to 50 thousand, depending on their profession. The loan amount can go from BDT 50,000 to 20 Lac, based on the student’s needs. The interest rate is 9% per year and repayment can be made over 5 years. The loan can be used for education-related expenses both in Bangladesh and abroad. However, the minimum salary cap for the guardian may be a barrier for some financially-needy students.
7. NCC Bank
NCC bank is one of the leading private-sector banks in Bangladesh. They offer a variety of loan options to a broad range of customers. One of the most unique loan options they offer is their student loan, which provides the highest loan amount of all banks in Bangladesh. This loan is available to all Bangladeshi students who have completed their HSC or equivalent level of education. Students who want to study abroad must present their visa and admission documents as part of the application process. The loan amount can range from BDT 1 lac to 1 crore, depending on the applicant’s financial situation and needs. However, NCC bank also has one of the highest interest rates at 12.5% per year. The repayment period for the loan can be extended up to 5 years.
Student loans are a valuable resource for students in Bangladesh who need financial assistance to pursue their education. The banks listed in this article offer a range of loan options with varying interest rates and repayment periods. By carefully researching and comparing the loan options available, students can make an informed decision and find the best loan option to suit their needs. It is also important to consider the eligibility, loan amount, and interest rate before applying for a student loan. This article provides a useful starting point for students to begin their search for the right loan.