A Look At The Lowest Interest Rates On Education Loans In India

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Interest rates in the economy have begun dropping and this is good news for students who are looking to pursue higher education in India or abroad.

Many banks in India are offering competitive interest rates with easy repayment options. The repayment of an education loan will be usually one year after course completion or six months after securing employment, whichever is earlier.

Note that different banks have different norms when calculating and considering education loans for students.

Lowest Interest Rates On Education Loans In India

Here is a look at lowest education loan interest rates in India from the leading banks.

Name of Bank Interest Rate on Education Loan
United Bank of India10.25-10.75 per cent
IDBI Bank10.00 Per cent
Bank Of India12.45 per cent
State Bank of India11.60 per cent
Axis BankBase rate + 5.50 per cent
Andhra BankBase Rate +2.25per cent
PNB SaraswatiBase Rate+2.50 per cent
IOB12.90 per cent
Punjab and Sind Bank12.50 per cent
Central Bank of India11.95 Per cent

Please note that girls seeking to pursue their higher education can do as at interest rates that are lower than the above as they get a slightly reduced rate of interest.

Education loan features:

Repayment period: The repayment period for Education loan ranges from 5-7 years.

Margin: No margin amount is payable for loans up to Rs 4 lac; while a 5 per cent margin for studies in India and 15 per cent for overseas studies is prevalent.

Limit: For education in India a maximum amount of Rs 10 lakhs can be availed, while the upper cap is Rs 20 lakhs for pursuing studies abroad. However, banks can re-consider the amount depending on the course and repaying capacity.

Interest rates: Simple interest is to be charged during the study period and up to commencement of repayment. Simple interest may be charged even during any subsequent moratorium considered. Rates may vary depending on the A list, B list of educational institution and the loan amount.

Security: The security can be in the form of land, building, Units of UTI, NSC, KVP, life policy, gold, and shares, mutual fund units, debentures, bank deposit in the name of student or parent.

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Read more about: education loans, education loan
Story first published: Thursday, September 10, 2015, 12:19 [IST]
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