Karnataka Bank Education Loan Interest Rate

Karnataka Bank Education Loan Interest Rate

Karnataka Bank is one of India’s popular and preferred private-sector banks to fund global education. Karnataka Bank education loans are provided for a wide range of courses in varied countries and universities. Under the KBL Vidyanidhi scheme, education loans to study abroad up to INR 20 lakhs are provided. Karnataka Bank Education Loan Interest Rate rates range from 10.90% to 12.60% and the loan tenure is up to 180 months (15 years).

Let’s have a look at more details of Karnataka Bank Education loan and interest rate calculation.

What is Karnataka Bank Education Loan Interest Rate?

The Karnataka Bank education loan interest rates are provided at competitive rates starting at 10.90%. These are applicable for education loans up to INR 7.50 lakhs. Interest rates on education loans above INR 7.50 lakhs reach up to 12.60%. The bank provides education loans at floating interest rates and they are subject to change based on revisions in RBI guidelines on education loans and the economic condition of the country. 

The table below provides a clear picture of Karnataka Bank education loan interest rates. 

Karnataka Bank Education Loan Interest Rate for Males (Floating)

The interest rate on education loans varies depending on the net loan amount. Check the interest rate for male students offered by Karnataka Bank under the Vidyanidhi scheme:

Loan amountInterest Rate
Upto Rs. 4 lakh(under CGFSEL)One year MCLR + 2.00 = 10.90% p.a.
Rs. 4 lakh to Rs. 7.5 lakh(under CGFSEL)One Year MCLR + 2.00 = 10.90%p.a.
Above Rs. 7.5 lakhOne year MCLR + 4.20 = 13.10% p.a.

Karnataka Bank Education Loan Interest Rate for Females (Floating)

The bank provides education loans to female students at a slightly lower rate of interest. Check all the details below:

Loan amountInterest Rate
Upto Rs. 4 lakh (under CGFSEL)One year MCLR + 1.95 = 10.85% p.a.
Rs. 4 lakh to Rs. 7.5 lakh (under CGFSEL)One year MCLR + 1.95 = 10.85% p.a.
Above Rs. 7.5 lakhOne year MCLR + 3.70 = 12.60%p.a.

Also Read: Insurance is an important factor which you should consider while taking a loan. Check here all about SBI RiNn Raksha Education Loan Insurance

Karnataka Bank Education Loan Interest Rates Calculation 

Karnataka Bank education loans are provided at floating interest rates. This means that interest rates on education loans are subject to revisions and changes every quarter. These are calculated and linked to MCLR (Marginal Cost of Funds based Lending Rate) and Spread. 

  • MCLR is the minimum interest rate by considering factors such as its cost of funds, operating costs, and profit margin. 
  • Spread is the difference between the lending rate and the deposit rate of the banks. It is decided in consideration with their internal policy and RBI guidelines. 

For example- if the MCLR is 8.9% and the Spread is 1.95%, then the interest rate will be 10.85%. 

Also Read: Want to get a quick education loan online? Check here YONO SBI Education Loan to Study Abroad

Factors Affecting Interest Rates

Many factors affect education loan interest rates. Some of these factors include the university and course chosen, amount of loan taken, repayment period, creditworthiness, and others. Let’s have a look at the factors that might affect Karnataka Bank education loan interest rate. 

Loan Amount and Tenure

If the education loans are taken for longer duration and higher amounts, then usually the interest rates charged are high. This is due to the risk associated with an extended period of time. 

Choice of Country and Course 

Another factor that affects the interest rate calculation is the country and course chosen by the applicant to pursue higher education. Courses that have higher chances of employment and better career prospects (like professional and technical courses) from reputed universities allow banks to reduce interest rates. 

Creditworthiness

An excellent credit profile of the applicant and co-applicant can help you secure lower interest rates on education loans. Banks feel confident of timely instalments paid. 

Collateral Security

Collateral-free education loans have higher interest rates as the risk associated is high. Thus, collateral in the form of property, bonds, or fixed deposits can reduce the lender’s risk and result in lower education loan interest rates.  

Economic Conditions

Factors like inflation can hamper overall interest rates in the country. When inflation hits, the repo rate is increased by the RBI which results in costlier borrowings of education loans. 

FAQs on Karnataka Bank Education Loan Interest Rates

What is the Karnataka Bank education loan interest rate?

The Karnataka Bank Education Loan interest rates range from 10.90% to 12.60% p.a. Education loans up to INR 7.5 lakhs are provided at lower interest rates as compared to loans above INR 7.5 lakhs from Karnataka Bank.

What is the Karnataka Bank interest rate on education loans above 7.5 lakhs?

If the loan amount is more than 7.5 lakhs, Karnataka Bank’s education loan interest rate for males is 13.10% p.a. and for females is 12.60% p.a.

Can I choose between fixed and floating interest rates for a Karnataka Bank education loan?

An applicant can’t choose to take KB education loans at fixed interest rates. Karnataka Bank provides education loans at floating interest rates, which are subject to revision every quarter.

How are Karnataka Bank Education loans calculated?

Karnataka Bank education loans are calculated as the sum of one-year MCLR and the spread. For example- if the MCLR is 8.9% and the Spread is 1.95%, then the interest rate will be 10.85%.

What are the factors affecting education loan interest rates?

Factors that affect education loan interest rates are loan amount and tenure, choice of country and course, credit score, collateral provided, and economic conditions.

This was all about Karnataka Bank education loan interest rates. Make sure to compare the interest rates provided by different lenders and then apply for education loans. 

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 Shubhika Garg

Hey there! I'm Shubhika- a proud graduate in English Literature and Language from Delhi University. My journey as a content writer transitioned from online teacher into the world of words. Stepping into the domain of blogs and articles, I discovered my passion for writing growing deeper and stronger. Having said that, I have experience of writing for diverse industries in automobile, technology, ed-tech, finance and mental-health; crafting details to help you find the solution to what you are looking for. Join me as I invite you all explore and learn together.

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