Banks Offering Lowest Interest Rate on Education Loans

Banks Offering Lowest Interest Rate on Education Loans

Interest rate is a major factor to consider when applying for an education loan to study abroad. There are a lot of government and private banks in India that claim to provide education loans at low rates of interest. However, you must understand that it is essential to compare all the major banks based on interest rate, repayment period and other important factors. Here, we have mentioned some of the top banks offering the lowest interest rates on education loans with flexible terms and conditions. Read on to know all the major features, loan amounts and interest rates of those banks. 

Top Banks for Education Loans at Low-Interest Rates

Some of the top banks in India providing the cheapest education loans to students, especially for overseas studies are SBI, Bank of Baroda, IOB, Union Bank etc. All these banks provide education loans based on IBA’s model education loan scheme and the guidelines of RBI on education loans. Let’s check all the major features and schemes of top banks for education loans at low-interest rates.

Also Read: Planning to go to Germany for academic purposes? Check here all about Education Loan for Germany

Bank of Baroda

Bank of Baroda is one of the oldest banks in India established in the year 1908. It is designated as a profit-making public sector undertaking. Bank of Baroda provides education loans under the Baroda Scholar Loan scheme. The bank offers a low rate of interest, easy processing and a flexible repayment period. Check the major features of Baroda Scholar Loan below:

ParticularsDetails
Name of the SchemeBaroda Scholar Loan
Maximum Loan AmountINR 1.5 crore
Repayment Period15 years
Rate of InterestUp to INR 7.5 lakh- 11.15%
Above INR 7.5 lakh: 10.20%
0.20% rebate on the interest rate for female students.
Processing Fee1% Processing Charge (Max. INR 10,000/-) recovered upfront for loans above INR 7.5 lakh
Margin MoneyNo margin up to INR 4.5 lakh
15% margin money for loans above INR 4.00 lakh up to INR 7.50 lakh
No margin for a loan amount above INR 7.5 lakh
Minimum Eligibility CriteriaIndian citizens above 18 years of age
Must have secured admission to a recognized university abroad

Punjab National Bank

Punjab National Bank (PNB) is a leading public-sector bank in India with a strong track record in providing education loans to study abroad. The bank offers education loans at affordable interest rates under the PNB Udaan Scheme. You can get an education loan for graduation, postgraduation, degree or diploma like pilot training, shipping etc. The maximum loan amount offered is INR 1.5 crore with interest rates ranging between 10% to 13% depending on the loan amount and type of loan. Check all the major features of the PNB Education loan below:

ParameterFixed RateFloating Rate
Loan irrespective of the amount to the student getting admission into specific institutes (100% collateral)For loans up to 10 years: 10.25%
For loans above 10 years: 10.75%
RLLR+BSP
Loan irrespective of amount (100% collateral security is required)For loans up to 10 years: 11.50%
For loans above 10 years: 12%
RLLR+BSP+1.25%
Loan up to Rs.7.50 lakhsFor loans up to 10 years: 12.25%
For loans above 10 years: 12.75%
RLLR+BSP+2.00%
Loan above Rs.7.50 lakhsFor loans up to 10 years: 12.25%
For loans above 10 years: 12.75%
RLLR+BSP+2.00%

Note:

  1. Apart from the loan irrespective of the amount to the student getting admission into specific institutes (100% collateral), the female students will get a rebate of 0.5% in interest rates.
  2. RLLR refers to repo-linked lending rate and BSP refers to the basis point which is a standard measure for interest rate. 

State Bank of India

State Bank of India is the largest public sector bank and is popular for overseas study education loans under the SBI Global Ed-vantage scheme. You can get an education loan of up to INR 1.5 crores at affordable interest rate. The bank also provides a discount in interest rate if you are availing SBI RiNn Raksha or any other policy or product that is being assigned for the benefit of the bank’s business. Check details for the SBI Education Loan interest rate and how it is calculated.

Scheme of LoanCalculation (EBR + Spread)Effective Rate of Interest
SBI Global Ed-vantage Scheme9.15%+2%11.15%
SBI Student Loan Scheme9.15%+2%11.15%
SBI Shaurya Education Loan SchemeFor secured loan: 9.15%+2%
For unsecured loan: 9.15%+2.60%
For secured loan: 11.15%
For unsecured loans: 11.75%

Note: All female students will get a rebate of 0.50% on the interest rate.

Also Read: Confused about public and private bank education loans? Check here all the details on Education loans from Public vs. Private Bank

Indian Overseas Bank

IOB (Indian Overseas Bank) is a leading government bank in India providing study-abroad education loans to meritorious students. The bank provides education loans at affordable interest rates to students with a repayment period of up to 15 years. The bank provides discounts on interest rates based on the type of loan, repayment behaviour, university selection etc. IOB education loan interest rate discount is also applicable for employees and ex-employees. Check the details below:

ParameterCalculation Effective Interest Rate
For General PublicRLLR + 0.40% (SP)+ 1.25% (RP)11%
Forwards of staff & retired staffRLLR + 0.40% (SP)+ 0.00% (RP)9.75%

Union Bank of India

Union Bank is a renowned public sector bank in India. The bank provides education loans to study abroad at interest rates ranging from 8% to 12.50%. This rate is cheaper than loans from other banks and due to this, you can save a considerable amount of money during the repayment. Check the interest rate of the Union Bank education loan below:

Education Loan SchemeMaximum Loan Amount (INR)Rate of interest
Union Education – Study In India And AbroadNo restriction on the maximum amount (need-based finance)9.30% to 10.45% (based on the type and amount of loan
Union Education Premier Abroad40 lakhs (unsecured loan)10.80%
Union Education Premier Abroad40 lakhs to 1.5 crore (with collateral)10.80%

FAQs

Which banks in India offer the lowest interest rates on education loans for studying abroad?

Several banks in India offer low-interest rates on education loans for studying abroad. Some of the banks known for providing low-interest rates are the State Bank of India (SBI), Bank of Baroda, Punjab National Bank (PNB), IOB etc.

What factors determine the interest rate offered by banks for education loans to study abroad?

The interest rate on education loans can be influenced by factors such as the applicant’s credit history, the loan amount, the duration of the course, the reputation of the educational institution etc.

Are there any specific eligibility criteria to avail of education loans with low-interest rates for studying abroad?

The interest may be less in certain conditions like the student’s academic record, admission to a recognized institution abroad, co-applicants or financial stability, collateral requirements, and repayment capacity.

How can I compare the interest rates offered by different banks for education loans for studying abroad?

To compare interest rates effectively, you can visit the websites of various banks offering education loans.

Are there any additional benefits offered by banks providing education loans with low-interest rates?

Yes, some banks may offer additional benefits such as flexible repayment options, moratorium periods, discounts on interest rates for female applicants, preferential rates for certain courses or institutions, and concessions for borrowers from economically weaker sections.

This was all about the best banks in India offering lower interest rates. Always compare the banks based on their loan offer, interest rates, and other terms and conditions.

To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.

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About Shekhar Suman

Shekhar is a versatile writer with a passion for sharing knowledge and creativity. With expertise in crafting informative blogs on study abroad and finance, Shekhar helps readers navigate the complexities of education and financial planning. Most of his writings blend the practicality of finance and the beauty of language, making a meaningful impact in both spheres. Beyond his professional pursuits, he finds solace in the writing Shayari.

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