Comparing Education Loan Interest Rates of Different Banks and NBFCs

Education Loan Interest Rates of Different Banks and NBFCs
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Education Loan Interest Rates of Different Banks and NBFCs: An education loan is one of the best ways to fund your study abroad dream easily. In India, the banks disbursed education loans of more than INR 17,700 crore in 2022-23. However, while taking an education loan, it is very important to research and compare various banks and NBFCs and find the best-suited scheme for the loan.

In India, a lot of private and government banks, NBFCs etc provide education loans to study abroad under various schemes. For example, SBI Global Ed-vantage education loan, PNB Udaan Education Loan etc provides study abroad loans up to INR 1.5 crore. Let’s check and compare the interest rates of major banks and financial institutions in India.

Education Loan Interest Rate: Top Public Sector Banks

Government banks in India provide education loans to study abroad as per the IBA Model Education Loan Scheme. You can get up to INR 1.5 crore or more based on your requirements. You should always keep researching the banks providing the lowest interest rate on education loans so that you can get the best offer. Some of the top public sector banks in India providing education loans are the State Bank of India (SBI), Bank of Baroda (BOB), Union Bank of India (UBI), Bank of India (BOI), Punjab National Bank (PNB) etc. Check the interest rates of these banks:

Name of the BankRate of InterestType of Interest Rate
State Bank of India11.15%Floating
Bank of Baroda9.70% (for premier institutions)
11.15% (for other institutions)
10.20% (for loans above INR 7.5 lakh)
Floating (interest rate might differ if you choose fixed interest rate)
Union Bank of IndiaEBLR + 0.50% (for collateral-free loans up to INR 40 lakh
EBLR + 0.25% (for secured loans where collateral offered is 50% value of the loan amount
EBLR (for a collateral value equal to 100% of the loan amount)
Floating
Bank of IndiaFor loans of INR 7.5 lakh and above: 1 Year RBLR +1.70%
For loans above INR 7.5 lakh: 1 Year RBLR +2.50%
Fixed/Floating (as per the requirements)
Punjab National BankLoan irrespective of amount (where minimum 100% collateral security is provided): RLLR+BSP+1.25% (Presently 10.50%)
Loans up to INR 7.5 lakhs and above: RLLR+BSP+2.00%
Floating

Education Loan Interest Rate: Top Private Sector Banks

Some private banks in India are also renowned for providing education loans to study abroad. Students can get up to INR 2 crore from private banks in India at affordable interest rates. Some of the top private banks providing education loans in India are HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, IDFC First Bank etc. Check the interest rates on education loans by private banks below:

Name of the BankRate of InterestType of Interest Rate
HDFC Bank12.50%Floating
ICICI BankStarting from [REPO + 3.75% (Spread)]Floating/Fixed (as per the requirements)
Axis BankStarting from 10.25% i.e. REPO+ 3.75% (Spread) onwardsFloating/Fixed (as per the requirements)
Yes BankStarting from 10.99%Floating/Fixed (as per the requirements)
IDFC First BankStarting from 9%Floating/Fixed (as per the requirements)

Also Read: Confused between public and private banks? Check this blog and know which is best among public banks or private banks for education loan

Education Loan Interest Rate: Top NBFCs

NBFCs are quite famous these days especially when it comes to study-abroad education loans. One of the most important benefits of education loans from NBFCs in India is that they provide higher amounts without any collateral. Some of the popular NBFCs providing study-abroad education loans in India are Avanse, MPower, HDFC Credila, Prodigy, Auxilo etc. Check the interest rate offered by all these NBFCs:

Name of the NBFCRate of InterestType of Interest Rate
Avanse Financial Services14%-16.5% per annumFloating/Fixed (as per the requirements)
MPower FinanceStarting from 12.99% p.a. (13.98% APR)Fixed
HDFC Credila10.5% to 14%Floating
ProdigyStarts from 10.50%Floating/Fixed (as per the requirements)
Auxilo Finserv12.70% p.a -18% p.a.Floating

Tips to Consider While Taking an Education Loan

Loans are good only when you have a proper repayment plan in your mind. Sometimes it becomes very difficult to manage the loan repayment due to increasing rates and inflation. The effect of inflation on education loans can be seen at certain intervals. Hence, you must keep the below-mentioned tips in mind while taking an education loan to study abroad:

  • Most of the government bank provides education loans to study abroad at a floating rate of interest which is subject to change every quarter. In those cases, you should opt for an education loan refinance and look for a cheaper option
  • The interest rate on collateral-free education loans is always higher than a secure education loan. Hence, always try to get a secured loan so that you can save money over the interest rate
  • Always compare various lenders like private banks, government banks, NBFCs etc on various parameters like interest rate, repayment period, previous track record, terms of collateral, moratorium period etc

Also Read: Planning to study in Germany? Check out the top banks providing education loans for Germany

FAQs

How do I decide which bank to choose for my education loan?

When comparing education loan options, you need to consider factors such as interest rates, type of interest (fixed or floating), repayment period, collateral requirements, and the bank’s track record. Evaluate these aspects based on your financial situation and preferences to make an informed decision.

What is the SBI Education Loan interest rate?

SBI provides education loans to study abroad at 11.15% p.a. Floating. The bank provides a rebate of 0.5% in the interest rate to female students.

Are interest rates fixed or variable for education loans from public sector banks?

Interest rates for education loans from public sector banks are mostly floating, meaning they can fluctuate based on market conditions every quarter. However, some banks may offer fixed rates as well, so it’s essential to clarify this with the bank while applying for the loan.

How does the interest rate offered by NBFCs compare to that of banks?

NBFCs tend to offer slightly higher interest rates compared to banks. However, NBFCs may provide loans without collateral and offer more flexible terms, which can be beneficial for some borrowers. It’s important to compare the interest rates against other terms and conditions offered by both banks and NBFCs.

Can I refinance my education loan to get a better interest rate?

Yes, you can consider refinancing your education loan if you find a bank or lender offering a lower interest rate. This option is particularly relevant for loans with floating interest rates, as you may be able to secure a better rate if market conditions change or if you find a more favourable loan option.

What should I prioritize when comparing education loan options?

While comparing education loan options, prioritize factors such as interest rates, repayment flexibility, tenure, and the overall cost of borrowing. Also consider the reputation and reliability of the lender, as well as any additional fees or charges associated with the loan. Evaluating these factors comprehensively will help you make an informed decision.

This was all about the comparison among some of the best banks and financial institutions for education loan interest rates. Check out all the terms and conditions before applying for an education loan.

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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