How The Girl Child Benefits From Lower Education Loan Interest Rates In India?

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    Encouraging education for the girl child has always been a priority for many in the private sector in India. The girl child benefits from education loans from banks. Most of the banks in India  offer lower interest rates, to the extent of 0.50 per cent for the education of the girl child.

    How The Girl Child Benefits From Lower Education Loan Interest Rates In India?
    In some cases the norms are slightly relaxed, while in some cases, there are several beneficial schemes that are launched for availing education loan. Take a look at the schemes of the banks and their interest rates, which in most cases is 0.50 per cent lower on education loans for the girl, as compared to education loans for boys. 

    Interest and Benefits on Education Loan Up to Rs 4 Lakhs For Girl Child

    Name of Bank Interest Rate Benefit For Girl Child
    Axis Bank Base Rate + 6.50% 0.50% lower
    IOB Loans Vidya Jyoti 12.25% 0.50% lower
    PNB Saraswati 12.75% 0.50% lower
    SBI Education 13.00% 0.50% lower
    Syndicate Bank 1.75% above base rate 0.50% lower
    Oriental Bank of Commerce 12.25% 0.50% lower
    Bank of India 12.70% 0.50% lower
    Andhra Bank Base rate +2.25% 0.50% lower
    Punjab and Sind Bank 12.25% 0.50% lower
    State Bank of Mysore 12.75% 0.50% lower

    As can be seen from the table most of the banks in India offer a concessional loan rate of 0.50 per cent for the girl child. Other banks may also be offering lower interest rates, but the above are definitely offering and one can approach them for details.

    Here are some other details for education loans in India

    Generally, there is no guarantor required if the loan is below Rs 4 lakhs. However, there is a requirement for a guarantor if it exceeds this amount. A third party guarantee would most certainly be required with most banks.

    Above an education loan of Rs 7.5 lakhs most banks seek a collateral in the form of an NSC certificate, Unit Trust of India Certificate etc.

    Insurance policy on the life of the student

    To protect the bank from a bad debt in case of death of the student, there is a life insurance policy that needs to be taken on the life of the student. The bank will pay the insurance amount by building it into the loan. This means that the applicant ends-up paying for the premium on the insurance.

    Repayment terms

    The repayment terms generally tend to differ from banks to banks. In most cases it is one year after getting a job.

    Conclusion

    It's better for parents and students to opt for an education loan when it comes to loan for a girl student. Most other forms of loans like personal and gold loans to meet the education of a girl child is not the right approach as the interest rates in most cases is far higher than that of an education loan.

    In cases it is for studies abroad one may need to raise additional resources in terms of collateral. But, as mentioned earlier this is a much better proposition then going for other forms of loans, whose interest rates are far higher.

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