PNB Education Loan Interest Rate: Calculation, RLLR, Rebates

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Punjab National Bank (PNB) is one of the best public-sector banks in India. The bank offers education loans to study abroad under its dedicated scheme ‘PNB Udaan’. You can get up to INR 1.5 crores in education loans subject to the terms and conditions and eligibility criteria. PNB education loan interest rate is determined by the bank based upon RLLR plus BSP rate. Let’s understand how the interest rate is calculated and determined for an education loan.

What is PNB Education Loan Interest Rate?

PNB Education loan interest rates vary depending on many factors such as loan amount, type of interest rate, tenure of loan, credit score etc. After considering these factors, the bank determines the interest rate based on Repo Linked Lending Rate (RLLR) and Business Strategy Premium (BSP). You should always check properly about the interest rate as mentioned by the bank in the sanction letter before initiating the PNB education loan disbursement process. Check all details on interest rate below:

  • The RLLR is the rate which is directly linked with the Repo Rate determined by the Reserve Bank of India
  • The current RLLR, as per the PNB, is 9% and the additional spread i.e. the BSP is 0.25%
  • The final interest rate on the loan is decided after considering the RLLR, BSP and other parameters i.e. the loan amount, credit score by different credit enquiry companies, and the tenure of the loan.
  • Currently, PNB provides education loans to study abroad at 10.25% to 12.25% (fixed) rate of interest

Also read: Are you aware of the fact that credit score affects loan refinancing or transfer? Check this blog and understand credit scores and its impact on education loan refinancing 

PNB Udaan Education Loan Interest Rate Calculation

The interest rate on PNB Udaan education loans is based upon the current RLLR + additional spread i.e. BSP as determined by the bank. RLLR means the Repo Linked Lending Rate fixed by the Reserve Bank of India. It refers to a system where the rate of interest on education loans offered by different banks is linked to the repo rate decided by the RBI. This is a mechanism implemented by the central bank on the regulated entities in order to ensure transparency and efficiency in the monetary policy. Check the details below:

For example, if the RLLR is 9%, and PNB determines a BSP of 1.5%, then the final interest rate on the education loan would be 10.5%

9% (RLLR) + 1.5% (BSP) = 10.5% (Applicable Interest Rate)

PNB Udaan Education Loan Interest Rate for Male and Female Students

At present, the bank offers education loans for overseas studies under the PNB Udaan scheme at an interest rate ranging from 10% to 13%. If you are applying for a loan through the Vidya Lakshmi Portal PNB Education Loan, you can check the complete list of schemes and interest rates provided by PNB. Check the table below for interest rates on PNB Education Loan:

ParameterFloating Rate of InterestFixed Rate of Interest
Education loans irrespective of the amount to the student getting admission into specific institutes (where minimum 100% collateral security is available)RLLR+BSP(Presently 9.25%)10.25% (for tenure up to 10 years)
10.75% (for tenure above 10 years)
Loan irrespective of amount (where minimum 100% collateral security is available)RLLR+BSP+1.25%(Presently 10.50%)11.50% (for tenure up to 10 years)
12.00% (for tenure above 10 years)
Loan upto Rs.7.50 lakhs(covered under CGFSEL Scheme)RLLR+BSP+2.00%(Presently 11.25%)12.25% (for tenure up to 10 years)
12.75% (for tenure above 10 years)
Loan above Rs.7.50 lakhsRLLR+BSP+2.00%(Presently 11.25%)12.25% (for tenure up to 10 years)
12.75% (for tenure above 10 years)
Note: The interest rate on education loans to study abroad under PNB Udaan for female students will be 0.5% less than mentioned above. Contact the bank for more information

Factors Affecting Education Loan Interest Rate

There are certain factors that affect the education loan interest rate directly. The rate of interest may decrease or increase based on factors such as total loan amount, repayment period, credit score of the applicant etc. Check all the details below:

Credit Score of the Applicant

A significant factor influencing education loan interest rates in India is the creditworthiness of the borrower, as reflected in their credit score. A higher credit score indicates a lower risk for the lender, and borrowers with good credit scores are more likely to secure loans at lower interest rates. The Punjab National Bank (PNB) provides a rebate on interest rates if the credit score is 800 and above subject to terms and conditions.

Also Read: Are you aware of the details in your credit report? Check here all about the Latest RBI Guidelines on Credit Report

Type of University and Course

The nature of the educational institution and the course pursued can impact the interest rate. The bank may differentiate between professional courses and regular degree programs, with some institutions or courses considered riskier than others. Education loans for premier institutions or in-demand courses may have more affordable interest rates.

Loan Amount and Repayment Period

The education loan amount and the repayment period chosen by the borrower also play a role in determining the interest rate. Generally, larger loan amounts may attract higher interest rates, and longer repayment periods might result in a higher cumulative interest payout. Borrowers should carefully consider these factors when structuring their loans to manage the overall cost effectively. In the case of PNB, a rate of interest on education loans above INR 7.5 lakh and a repayment period above 10 years attract a higher rate of interest.

FAQs on PNB Education Loan Interest Rate

What is the current PNB education loan interest rate?

PNB’s education loan interest rates may vary depending on the loan amount, repayment period and type of interest rate. At present, the interest rate on education loans from PNB ranges between 9% to 13%. It’s advisable to check with Punjab National Bank directly or visit their official website for the most up-to-date information on current interest rates.

How is the interest rate on PNB education loans determined?

PNB education loan interest rates are influenced by factors such as the loan amount, type of course, and the creditworthiness of the borrower. Generally, borrowers with higher credit scores may be eligible for lower interest rates.

Are there any special interest rate schemes for certain courses or categories of students?

Yes, PNB may offer special interest rate schemes for specific courses or categories of students. The interest rates could differ for professional courses or loans taken for studies abroad.

Can I choose a fixed or floating interest rate for my PNB education loan?

PNB usually provides borrowers with the option to choose between fixed and floating interest rates. Fixed rates remain constant throughout the loan tenure, while floating rates may change based on market conditions.

Is there any provision for interest rate concession or subsidy for female students?

Yes. The female students will get a rebate of 0.5% on education loans to study abroad under the PNB Udaan Scheme.

This was all about the PNB Education Loan interest rate. Always go through the complete schedule of charges and the interest rates specified by the bank before applying for the loan.

To know more about the interest rates on education loans, 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.

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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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