Education loans provide financial aid to aspiring students who want to pursue higher education in India as well as abroad. Many banks offer specialized education loans to cater to the diverse needs and requirements of students. The loan terms, such as the loan amount, interest rate, and repayment, vary by lender.
Students should consider these terms to choose a bank for an education loan according to their requirements. One of the major criteria that every student is concerned about is the interest rate on the loan. The interest rate significantly varies from lender to lender. Hence, we have gathered the latest interest rates of the prominent banks offering education loans in India for you to consider.
Interest Rates on Education Loans from Banks in India
The interest rate on an education loan influences the overall loan repayment by determining the monthly EMIs of the loan. It varies significantly based on the requirement of collateral involved in the loan.
Many students often look for low interest rates to reduce the overall education loan cost. When students apply for an education loan through WeMakeScholars, they can automatically get a lower rate of interest, reducing the overall education loan cost. As WeMakeScolars is partnered with more than 15 public and private banks, their team can help students get the best interest rates on education loans.
Here, we are going to look at the interest rates and loan amounts offered by different public banks, private banks, and NBFCs for education loans for secured, unsecured, and partially secured education loans.
Interest rates on Secured Education Loans
Education loans that require applicants to pledge collateral as security for the loan amount are secured education loans. These loans offer relatively lower interest rates and higher loan amounts compared to unsecured education loans. Here’s a table containing the interest rates and loan amounts of prominent banks for their secured education loans:
Bank Name | Maximum Loan Amount | Interest Rate |
State Bank Of India (SBI) | 3 Crores (Secured) | Starts from 8.15% |
Bank Of Baroda (BOB) | 1.5 Crores (Secured) | Starts from 9.45% |
Bank Of India (BOI) | 1.5 Crores (Secured) | Starts from 10.55% |
Punjab National Bank | Need-Based Financing | Starts from 7.70% |
Canara Bank | 1 Crore (Secured) | Starts from 10.00% |
Central Bank of India | 2 Crores | Starts from 7.85% |
Federal Bank | 20 Lakhs (Secured) | Starts from 11.75% |
South Indian Bank | 1.5 Crores (Secured) | 12.54% |
Karur Vysya Bank | 1.5 Crores (Secured) | Starts from 9.99% |
HSBC Bank | Need-Based Financing | Starts from 9.99% |
IDBI Bank | Need-Based Financing | Starts from 8.50% |
Kotak Mahindra Bank | 20 Lakhs (Secured) | Maximum 16% |
Karnataka Bank | 2 Crores (Secured) | Starts from 9.00% |
Tamilnad Mercantile Bank | 20 Lakhs (Secured) | Starts from 12.30% to 12.35% |
IndusInd Bank | Need-Based Financing | Starts from 10.49% |
Jammu and Kashmir Bank | 30 Lakhs (Secured) | Starts from 10.35% |
Yes bank | Need-Based Financing | Starts from 10.99% |
Standard Chartered Bank | Need-Based Financing | Starts from 11.49% |
Assam Gramin Vikash Bank | Up to 15 Lakhs | Starts from 10.10% |
Andhra Pradesh Grameena Vikas Bank | Up to 60 Lakhs | Starts from 9.50% |
Bangiya Gramin Vikash Bank | Up to 1 Crore | Starts from 10.00% |
Baroda Gujarat Gramin Bank | Up to 10 Lakhs | Starts from 10.30% |
Baroda UP Bank | Need-Based Financing | Starts from 8.15% |
Dakshin Bihar Gramin Bank | Need-Based Financing | Starts from 9.35% |
J&K Grameen Bank | Up to 20 Lakhs | Starts from 10.95% |
Karnataka Gramin Bank | Up to 1 Crore | Starts from 10.50% |
Madhya Pradesh Gramin Bank | Up to 20 Lakhs | Starts from 11.50% |
Maharashtra Gramin Bank | Up to 20 Lakhs | Starts from 11.95% |
Interest Rates on Unsecured Education Loans
Student loans that do not require any collateral as security from the applicants in the loan are called unsecured education loans. These loans are given based on the income and credibility of the financial co-applicant. Private lenders specialize in offering education loans without collateral. The table below contains the interest rates and loan amounts of well-known lenders for their non-collateral education loans:
Bank Name | Maximum Loan Amount | Interest Rate |
State Bank of India | 50 lakhs (Unsecured) | Starts from 10.15% |
Central Bank of India | 40 Lakhs (Unsecured) | Starts from 7.95% |
UCO Bank | 40 Lakhs (Unsecured) | Starts from 8.80% |
Union Bank of India | 40 Lakhs (Unsecured) | Starts from 9.50% |
Axis Bank | 75 Lakhs (Unsecured) | Starts from 11.25% |
ICICI Bank | 1 Crore (Unsecured) | Starts from 10.85% |
IDFC First Bank | 1 Crore (Unsecured) | Starts from 12.00% |
Auxilo | 60 Lakhs (Unsecured) | Starts from 11.50% |
Avanse | 85 Lakhs (Unsecured) | Starts from 10.50% |
Incred | 80 Lakhs (Unsecured) | Starts from 11.90% |
HDFC Credila | 1 Crore (Unsecured) | Starts from 11.50% |
Andhra Bank (Merged with Union Bank) | 40 Lakhs (Unsecured) | Starts from 9.50% |
Kerala Gramin Bank | Need Based | Starts from 13.60% |
These are the latest interest rates and loan amounts of prominent banks for their secured and unsecured education loans. Both public and private banks offer a moratorium period of the course duration plus 6 to 12 months on education loans. It is a grace period during which the repayments on the loan don’t start. After the moratorium period, the interest is compounded, and EMI is calculated. Use the education loan EMI calculator to calculate and compare the actual EMIs on student loans from different lenders, considering the interest rates, moratorium period, and other factors.
However, some private lenders charge interest during the moratorium period, and the interest is compounded after the moratorium period.
Students should also look at the other loan terms, such as eligibility criteria, repayment tenure, and collateral requirements, while taking an education loan.
Other Terms to Consider for an Education Loan
The loan terms that students should consider before taking an education loan are:
- Eligible courses for an education loan from the lender,
- Eligible countries for an education loan from the lender,
- Whether the preferred university is accepted by the lender,
- Collateral requirement,
- Documents required,
- Margin amount,
- Repayment tenure,
- Co-applicant eligibility, such as minimum required income and credit score, and
- Eligibility criteria for an education loan from the lender.
Conclusion
With the rising cost of education all over the world, the demand for education loans has also increased significantly. Education loans have become the primary source of funding for many students planning for both domestic and international studies. Many banks in India offer various education loan schemes to fulfill the diverse needs and requirements of students.
It is essential to understand the loan terms of these banks while taking an education loan. One of the major loan terms that significantly influences the overall repayment on an education loan is the interest rate. Hence, it is very important to understand the interest rates of education loans offered by banks when planning for a student loan. In this article, we have covered the latest interest rates on education loans from prominent banks in India, along with their loan amounts, to help students make a well-informed decision. We have also covered what other loan terms students should consider for an education loan.