Indian Bank Education Loan Interest Rate

indian bank education loan interest rate

Indian Bank is a leading public sector bank in India and one of the most preferable choices for education loans to study abroad. The bank offers education loans for overseas studies at affordable interest rates with flexible repayment periods. The bank decides the interest rate on loans based on various factors like total loan amount, repayment period, RBI guidelines on education loans, economic factors etc. In this blog, we will check all the details on the Indian Bank Education Loan interest rate and the factors affecting the same. Read on to understand in detail how the bank calculates the interest rate.

What is Indian Bank Education Loan Interest Rate?

Indian Bank provides education loans for overseas studies based on IBA’s model of education loans. Indian Bank education loan interest rate depends upon the loan amount and the type of loan and interest rate. Usually, the bank offers education loans on a floating interest rate basis, subject to revision every quarter. Always check the details on interest rates way before initiating the Indian Bank education loan disbursement process. The bank also offers a rebate of 0.5% in the total interest rate for female students. Check the Indian Bank education loan interest rate below:

Loan Amount (INR)Rate of Interest (Male)Rate of Interest (Female)
Up to 4 lakhs10.50%10%
4 lakhs to 7.5 lakhs10.50%10%
Above 7.5 lakhs10.75%10.25%

Note: The interest rate mentioned above may be different from the actual rate as it is subject to change based on the bank’s internal policy and ongoing economic factors. 

Also Read: Going abroad for studies? Check how the exchange rates are calculated and stay informed while exchanging currency abroad

Indian Bank Education Loan Interest Rate Calculation

As per the bank’s website, the current rate of interest on education loans ranges from 8.80*% to 11.40% subject to terms and conditions. The interest rate is calculated based on the policy rate fixed by the Reserve Bank of India and additional spread as decided by the bank. In simple terms, you can calculate the actual interest rate by adding the EBLR (external benchmark lending rate) and the spread outlined by the bank. Check the details below:

  • EBLR refers to a system in which the rate of interest on any loan offered by banks is linked to external benchmark rates, as directed by the RBI
  • The EBLR is subject to change based on the fluctuation in repo rate made by RBI
  • The interest rate on an unsecured education loan may be higher than a secured loan as the bank senses more risk in an unsecured loan

Also Read: Know all about how to apply for a Union Bank Education Loan through Vidya Lakshmi Portal

Factors Affecting Education Loan Interest Rate

The interest rate on any loan is affected by a lot of factors including the RBI’s lending policy, economic scenario, type of loan, type of interest rate etc. Usually, a secured loan often comes with a low interest rate and an unsecured loan comes with a higher interest rate. Check more details below:

The interest rates on education loans in India can be influenced by a few things. Different lenders might have different rules, but here are some common things that can make the interest rates go up or down:

Base Rate/External Benchmark Rate

The interest rates on education loans are often connected to a base rate or an external benchmark rate, like the Marginal Cost of Funds Based Lending Rate (MCLR) or the Repo Rate. If these benchmark rates change, it can affect how much interest you have to pay on your education loan.

Loan Amount and Tenure

How much money you borrow and how long you take to pay it back can also affect the interest rate. Generally, if you borrow a lot, the bank might give you a lower interest rate. But if you borrow a smaller amount, the interest rate could be higher. For example, the Indian Bank might charge a 10.20% interest rate if you borrow INR 6 lakh, but if you borrow more than INR 7.5 lakh, the interest rate could be 9.30%.

Collateral and Co-applicant

If you provide something valuable as security for the loan or have someone else with a stable financial background co-sign the loan with you, it can be good for your interest rate. This lowers the risk for the bank, and they might give you a lower interest rate. Usually, secured loans (with collateral) have lower interest rates compared to unsecured loans because the bank sees more risk in unsecured loans.

FAQs

What is the current interest rate for education loans offered by Indian bank?

Interest rates for education loans in Indian Bank vary but generally range from 8% to 15%, depending on the bank and the loan amount.

Are there any specific eligibility criteria that affect the education loan interest rate?

Yes, eligibility criteria such as academic performance, course type, and collateral influence the interest rate. Students with strong academic records may secure lower rates.

Is the interest rate fixed or floating for education loans in Indian bank?

Education loan interest rates in India can be either fixed or floating. The bank may offer both options, allowing borrowers to choose based on their preferences.

Do Indian banks provide any interest rate concessions or discounts on education loans?

Many banks offer interest rate concessions for female students, those from economically weaker sections, and loans with collateral. Availing government schemes can also lead to lower rates. At present, the Indian Bank provides a rebate of 0.5% on education loans for female students.

Can the education loan interest rate be renegotiated or modified during the repayment period?

Generally, education loan interest rates are fixed at the time of disbursement and remain unchanged during the repayment period. However, borrowers should check with their respective banks for any policy changes.

Knowing the interest rate on an education loan is very important as your entire repayment amount will be calculated based on the same. Always read and understand the loan-related terms and conditions carefully. 

To know more about the loan application process, 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. 

Related Blogs
Union Bank Education Loan Disbursement Process
ICICI Bank Education Loan Disbursement Process
How to Apply for Vidya Lakshmi Education Loan through YONO SBI App

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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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