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  • Education Loan Interest Rates

    Know the latest interest rates on education loans from leading banks in India so that you can compare rates and select the best student loan for your requirements. There are many factors that influence the rate of interest on these loans. Know what they are and how to calculate your education loan EMI for better financial management.

    Also find out all about the eligibility criteria and documents required to ensure that your application has a greater chance of approval.

    Compare Education Loan Interest Rates 2021

    Banks Interest Rates Processing Fees
    Punjab National Bank 6.85% to 9.50% p.a. 1% of loan amount
    Central Bank of India 8.50% to 9.00% p.a. Courses in India: Nil
    Canara Bank 6.90% to 8.90% p.a. Contact the bank
    State Bank of India 6.85% to 8.65% p.a. . Up to Rs.10,000
    Bank of Baroda 6.75% to 9.85% p.a. 1% of loan amount
    IDBI Bank 6.75% to 8.75% p.a. Contact the bank
    Bank of India 1 year MCLR + 1.70% to 1 year MCLR + 2.50% p.a. Nil
    Tamilnad Mercantile Bank 10.45% to 11.45% p.a. Nil
    HDFC 9.15% to 12.15% p.a. (education in India) Up to 1% of loan amount
    UCO Bank 4.00% to 10.20% p.a. Nil
    Karnataka Bank 9.98% to 12.38% p.a. Contact the bank
    Federal Bank 10.05% p.a. onwards Contact the bank
    Karur Vysya Bank 10.60% to 11.60% p.a. Nil
    Tata Capital 10.99% p.a. onwards Contact the bank
    Jammu and Kashmir Bank RLLR + 1.50% to RLLR + 3.50% p.a. 1% of loan amount
    ICICI Bank 10.50% p.a. onwards RAAC pricing + GST
    Dhanalakshmi Bank Contact the bank Nil
    Axis Bank 13.70% to 15.20% p.a. Rs.15,000 + GST
    Kotak Mahindra Bank Up to 16% p.a. Nil

    * Most of the bank. Offers zero processing Fee for courses in India. Please contact the bank for detail.

    Types of Interest Rates in Education Loan

    The type of interest rate on educational loans depends on the bank. Some banks offer a fixed interest rate throughout the loan repayment tenure. Others have interest rates that are pegged to the one-year Marginal Cost of funds based Lending Rate (MCLR). This can be reset at regular intervals, which would then affect the interest rate of the educational loan.

    Factors that Determine Education Loan EMI

    There are many factors that determine how much your Equated Monthly Instalment (EMI) will be on your education loan. These factors would be:

    1. Interest rate on the loan
    2. Loan amount
    3. Repayment tenure

    How to Calculate Your EMI on Education Loans

    The formula that is used to calculate your education loan EMI would be:

    EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]

    P = Principal amount

    R = Rate of Interest

    N = Number of years for repayment (this is calculated in months)

    You can also use an online EMI calculator to give you a detailed amortisation table of your EMI. You can use a free online education EMI calculator for this. All you have to do is enter your required loan amount, prevailing interest rate, and the repayment tenure of your choice into the relevant fields. You can either enter the figures into the fields or use the slider to set the figures (depending on the calculator). Once you have input the correct data, the amortisation table will be instantly detailed along with information about your total principal amount and total interest to be paid.

    Factors to Look Out For

    There are many factors to look out for when choosing an education loan. These would be:

    • Eligibility criteria
    • Courses for which the loan is applicable
    • Collateral required, if any
    • Guarantor required
    • Margin amount
    • Interest rate
    • Loan amount
    • Repayment tenure

    Eligibility Criteria

    The eligibility criteria may differ from one lender to the other, but these are the common criteria that you have to meet to be approved for an education loan:

    • Indian national
    • Age: Up to 35 years for non-employed individuals and up to 45 years for employed individuals
    • Proof of admission into the educational institution
    • Valid educational certificates showing a good academic record (of more than 50% marks)
    • Guarantor’s income proof or credit history
    • Passport/i20 form/visa in case of studies abroad

    Quickly Check: Education Loan Eligibility

    Documents Required

    These are some of the documents required to complete your loan application:

    • Fully filled in application form with passport-size photographs affixed as required
    • Admission letter on letterhead of the educational institute
    • Academic certificates of the applicant
    • Marksheets of entrance examination, if any
    • Scholarship document, if any
    • Declaration that no loan has been availed from another lender
    • Proof of identity such as Aadhaar card/passport/driving license/PAN card, etc.
    • Proof of address or residence such as utility bills/ration card/Aadhaar card/passport, etc.
    • Proof of age such as birth certificate or 10th standard certificate


    1. For what kind of courses can I avail an education loan?
    2. You can avail an education loan for recognized vocational courses, diploma, undergraduate, postgraduate, doctorate, and professional courses.

    3. Are there any tax benefits that can be availed on an education loan?
    4. Yes, you can avail tax benefits on the interest payments of your education loan. This will come under Section 80C and 80E of the Income Tax Act, 1961.

    5. When do I start repaying my loan?
    6. This will depend on the lender, but for most lenders, the repayment tenure will start either at the end of your course or a few months after you get a job. This is a moratorium period after your course ends.

    7. Is any collateral required?
    8. Usually, collateral is only required for education loans above a specific amount, which can vary from bank to bank.

    9. Can I add a co-applicant to my loan?
    10. For many banks, a co-applicant is mandatory for an educational loan. This can be a parent, guardian, spouse, or a parent-in-law.

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