Interest Rate of Saraswat Bank for Education Loans

Interest Rate of Saraswat Bank for Education Loans
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Saraswat Bank offers education loans to study abroad of up to INR 1.5 crore. The bank offers education loans under the Saraswati Education Loan scheme. The interest rate of Saraswat Bank for education loans is quite affordable and students can get cheaper loans from this bank.

The bank calculates interest rates based on several factors such as EBLR, spread determined by the bank etc. It is essential to check and understand the interest rates on education loans and how it is affected by multiple factors such as economic scenario, type of interest rate etc. Let’s check the interest rate of Saraswat Bank for education loans and the related factors.

What is the Interest Rate of Saraswat Bank For Education Loans?

Saraswat Bank education loans are offered on a floating rate basis, subject to change every quarter. The ongoing interest rate of Saraswat Bank for education loans is 10% per annum. The bank offers a rebate of 0.25% in the interest rate if you are getting admission into a premier university abroad. Also, it provides a 0.50% rebate on the interest rates to female students. However, this is the maximum discount as the bank has specified that the total discount on the interest rate should not exceed 0.50%.

Must Read: Getting an education loan from Saraswat Bank? Also check Saraswat Bank Forex Card for international students

Saraswat Bank Interest Rate Calculation

Saraswat Bank interest rate is calculated by considering the PLR (Prime Lending Rate) and the spread as determined by the bank. The PLR, here, is the basic lending rate below which the bank will not provide education loans. Check the calculation process below:

CategoryRate of Interest
General10% (PLR = 5.70%)
Female StudentsAfter a 0.50% discount;
(PLR-6.20) = 9.50%
Premier InstitutesAfter a 0.25% discount;
(PLR-5.95) = 9.75%

Factors Affecting the Education Loan Interest Rate

The interest rate on education loans is influenced by a variety of factors like economic conditions, loan amount, credit score etc. Banks or lenders generally offer lower interest rates to borrowers with higher credit scores, viewing them as financially responsible and less risky. Check some of the major factors affecting the education loan interest rate below:

Loan Amount and Repayment Period

The loan amount and repayment period have a strong impact on the interest rate. The interest rate can vary depending on how much money is borrowed and the repayment period. Usually, larger loan amounts or longer repayment terms might carry higher interest rates due to the increased risk and longer exposure to defaults. Lenders need to ensure that they are properly compensated for the extended period during which the money is lent.

Type of Loan

The type of education loan influences the interest rate directly. Education loans are majorly classified into two types i.e. secured and unsecured loans. Secured loans, backed by collateral such as property or fixed deposits, attract lower interest rates due to the reduced risk for lenders. On the other hand, unsecured loans, which do not require any collateral, often come with higher interest rates.

Also Read: Check here all the differences between HDFC Bank Vs Saraswat Bank Education Loan

Credit Score of the Applicant

The credit score of the applicant or co-applicant plays an important role in determining the interest rate of an education loan. A higher credit score reflects a strong credit history and good repayment behaviour leading to lower potential risk for the lender. As a result, applicants with high credit scores are offered loans at more favourable interest rates.

Loan Amount and Tenure

The amount and tenure of the loan also impact the interest rate. Generally, smaller loan amounts and shorter tenures are associated with lower interest rates because the repayment period is shorter, reducing the lender’s risk. Similarly, larger loan amounts and longer tenures may attract higher interest rates, as the risk of default increases over a prolonged period.

University and Course of Study

The university and the course of study for which the loan is being taken also affect the interest rate. Loans for prestigious or premier universities usually come with lower interest rates. This is because graduates from these institutions or courses are perceived to have better job prospects and higher earning potential.

These were some of the major details on the Interest Rate of Saraswat Bank for Education Loans. Check some FAQs based on the same below.

FAQs

What is the current interest rate for education loans offered by Saraswat Bank?

The current interest rate for education loans offered by Saraswat Bank is 10% per annum.

Are there any discounts available on the interest rate for specific categories of students?

Yes, Saraswat Bank offers a 0.25% discount on the interest rate for students admitted to premier universities abroad and a 0.50% discount for female students. However, the total discount on the interest rate should not exceed 0.50%.

How does Saraswat Bank calculate the interest rate for education loans?

The interest rate is calculated based on the Prime Lending Rate (PLR) and the spread determined by the bank. The ongoing PLR is 5.70%, and discounts are applied based on the student’s category (e.g., female students or those attending premier institutes).

What factors can influence the interest rate on an education loan from Saraswat Bank?

Several factors can influence the interest rate, including the loan amount, repayment period, type of loan (secured vs. unsecured), credit score of the applicant, and the university and course of study.

What are the benefits of applying for an education loan from Saraswat Bank if attending a premier university?

If attending a premier university, students can benefit from a 0.25% discount on the interest rate. This results in an interest rate of 9.75% per annum after the discount is applied.

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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