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.
|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.
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.
There are many factors that determine how much your Equated Monthly Instalment (EMI) will be on your education loan. These factors would be:
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.
There are many factors to look out for when choosing an education loan. These would be:
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:
Quickly Check: Education Loan Eligibility
These are some of the documents required to complete your loan application:
You can avail an education loan for recognized vocational courses, diploma, undergraduate, postgraduate, doctorate, and professional courses.
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.
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.
Usually, collateral is only required for education loans above a specific amount, which can vary from bank to bank.
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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