Education Loan Intrest Rate in SBI 8.15% Central Bank of India 8.10% PNB 9.20% Canara Bank 9.25% IDFC First Bank 10% IDBI Bank 8.50% ICICI 9.40%
Note: These interest rates are effective as of April 2024 and are subject to change as per the bank’s rules and regulations.
Education Loan
Leading Indian banks play a crucial role in assisting students in achieving their academic goals by providing comprehensive education loans
What is an Education Loan?
An education loan is a form of financial assistance provided by banks or loan providers to students who wish to pursue technical, educational, or other courses abroad. This loan enables students to repay the borrowed amount after they have completed their course. Additionally, a grace period of six months is typically given before the student needs to start repaying the loan, allowing them time to secure employment.
Types of Education Loan
- Undergraduate education loan for higher education after secondary education
- Post graduate education loan for pursuing courses after completion of undergraduate courses
- Career growth education loans for courses, trainings or certification
- Parents availing education loan for their children
Education loans serve as a financial lifeline, covering a wide range of expenses that students encounter during their academic journeys. These loans not only cover tuition fees but also extend support for expenses like hostel charges, travel costs, insurance premiums, and more. With loan amounts that can go up to Rs.1 crore and a flexible repayment tenure of 15 years, students receive substantial financial assistance.
A significant advantage of education loans is the tax benefits they offer under Section 80E of the Income Tax Act. This provision allows borrowers to claim deductions on the interest paid, providing some relief.
Education loans are not limited to traditional academic paths. They encompass various courses, including undergraduate, postgraduate, vocational training, and skill development programs. To be eligible, students need to be enrolled in recognized institutions and have completed 10+2 or hold a degree, among other factors.
The application process for education loans can be done online or offline, with the requirement of essential documentation such as admission letters and academic records.
Borrowers can make use of an Education Loan EMI Calculator to estimate their monthly repayments, which gives them a clear understanding of the overall loan cost. The repayment phase usually begins 12 months after completing the course, and borrowers have flexibility in choosing repayment modes such as internet banking, cheques, direct debit, and demand drafts.
Lenders understand the significance of education and take a holistic approach when approving loans. They consider factors like the chosen course, the institution, the loan amount, the student’s academic performance, the family’s repayment capacity, assets, and annual income.
In essence, education loans provide a supportive framework for students, relieving them of financial constraints and allowing them to focus on their educational endeavors.
| Name of Bank | Interest Rate (p.a.) | Processing Fees |
|---|---|---|
| SBI | 8.5% p.a to 11.75% | - Up to Rs. 10.000 - No charged required for loan amount below Rs. 20 Lakh - Loan amoutn above Rs.20 Lakh: Rs.10,000(plus taxes) |
| Central Bank of India | 8.10% p.a. to 10.60% p.a. | - Nil for studies in India - 1% of loan amount for studies abroad (Max: Rs. 15,000) |
| PNB | 9.20% p.a. onwards | - Nil for studies in India - 1% of loan amount for studies abroad (Max: Rs. 10,000) |
| Canara Bank | 9.25% p.a. onwards | - 0.50% of the loan namount up to Rs.10,000(for collateral security coverage of 100% and above) |
| IDFC First Bank | 10% p.a. to 15% p.a. | - Up to 1.5% of the loan amount |
| IDBI Bank | 8.50% p.a. onwards | - Nil for studies in India - 1% of the loan amount (Maximum: Rs.5,000) for studies abroad |
| Bank of Baroda | 8.15% p.a onwards | - No Processing for charges up to Rs7.50 lakh - 1% of loan amount up to Rs 10,000 for charges above Rs.7.50 lakh |
| Bank of India | 10.95% p.a. to 11.75% p.a | - No processing free for studies in India |
| ICICI Bank | 9.40% p.a. onwards | - Up to 2% +GST |