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.
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 India||10.25-10.75 per cent|
|IDBI Bank||10.00 Per cent|
|Bank Of India||12.45 per cent|
|State Bank of India||11.60 per cent|
|Axis Bank||Base rate + 5.50 per cent|
|Andhra Bank||Base Rate +2.25per cent|
|PNB Saraswati||Base Rate+2.50 per cent|
|IOB||12.90 per cent|
|Punjab and Sind Bank||12.50 per cent|
|Central Bank of India||11.95 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.