Make college memories that last a lot longer than your student loan payments.

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.

Education Loan Interest Rates All Banks 2020

Banks Interest Rates Processing Fees
Punjab National Bank 7.30% to 9.80% p.a. 1% of loan amount
Central Bank of India 7.60% to 9.60% p.a. Courses in India: Nil
Canara Bank 7.85% to 9.85% p.a. Nil
State Bank of India 7.95% to 10.05% p.a. Up to Rs.10,000
Bank of Baroda 8.00% to 10.25% p.a. 1% of loan amount
IDBI Bank 8.25% to 10.25% p.a. Contact the bank
Syndicate Bank 8.25% to 11% p.a. Nil
Bank of India 8.95% to 9.75% p.a. Up to Rs.5,000
Tamilnad Mercantile Bank 9.10% to 11.60% p.a. Nil
Oriental Bank of Commerce 9.40% to 11.40% p.a. Contact the bank
HDFC 9.55% to 13.25% p.a. Up to 1% of loan amount
UCO Bank 9.95% to 10.35% p.a. Nil
Karnataka Bank 10.08% to 13.9% p.a. Contact the bank
United Bank of India 10.25% to 10.35% p.a. Contact the bank
Federal Bank 10.25% p.a. onwards Contact the bank
Karur Vysya Bank 11.25% to 12.95% p.a. Nil
Tata Capital 10.99% p.a. onwards Contact the bank
Jammu and Kashmir Bank 11% to 13% p.a. 1% of loan amount
Andhra Bank 11.15% to 11.45% p.a. Contact the bank
ICICI Bank 11.25% to 14.60% p.a. RAAC pricing + GST
Dhanalakshmi Bank 11.45% to 13.60% p.a. 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?

You can avail an education loan for recognized vocational courses, diploma, undergraduate, postgraduate, doctorate, and professional courses.

2. Are there any tax benefits that can be availed on an education loan?

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.

3. When do I start repaying my loan?

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.

4. Is any collateral required?

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

5. Can I add a co-applicant to my loan?

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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