The SBI education loan interest rate is determined based on the guidelines of RBI on education loans and the bank’s internal policy. A lot of other factors also impact the SBI education loan interest rate such as the credit score of the applicant, loan amount etc.
Understanding the SBI education loan interest rate is essential for prospective borrowers, as it directly impacts the total cost of the loan. In this blog, we’ll break down the details of the SBI Education Loan Interest Rate, including the various schemes, eligibility criteria, and repayment options that make SBI loans a preferred choice for many.
Table of contents
- What is the SBI Education Loan Interest Rate?
- SBI Education Loan Interest Rate Calculation
- Benefits of Choosing SBI for Education Loans
- Understanding SBI Education Loan Eligibility Criteria
- Application Process for SBI Education Loans
- Factors Affecting SBI Education Loan Interest Rate
- Repayment of SBI Education Loan
- FAQs on SBI Education Loan Interest Rate
What is the SBI Education Loan Interest Rate?
The SBI education loan interest rate varies depending on the loan scheme, course of study, and the institution where the student has been admitted. As of now, the current SBI education loan interest rate start from 8.25% per annum, making it one of the most affordable financing options for students. These interest rates are subject to periodic changes based on the bank’s internal policies and the economic conditions.
For specialized schemes such as the SBI Scholar Loan Scheme, the SBI education loan interest rate vary depending on the institution. For instance, IITs and other high-ranking institutions typically enjoy a slightly lower interest rate of 8.15%, while loans for students enrolling in non-IIT institutions may carry an interest rate of up to 8.65%. Let’s check the interest rate for various SBI education loan schemes below:
| Loan Scheme | EBR | Spread | Effective Interest Rate |
| SBI Student Loan Scheme | 9.15% | 2% | 11.15% |
| SBI Global Ed-vantage Scheme | 9.15% | 2% | 11.15% |
| SBI Scholar Loan Scheme | 9.15% | 0.05% to 1.50% | 8.15% to 9.65% |
| SBI Shaurya Education Loan Scheme | 9.15% | 2% to 2.60% | 11.15% to 11.75% |
Note: The bank also provides rebates on education loan interest rates for female students. Also, if you are availing an add-on product like SBI RiNn Raksha, the bank may provide a rebate.
- SBI offers a 0.50% rebate on the interest rate for female students
- A rebate of 0.50% is applicable for all students if availing SBI Rinn Raksha policy or any other existing life insurance policy assigned in favour of the Bank
- All the education loans will be provided on a floating rate of interest
Also Read: Check some of the major differences between SBI Global Ed-vantage and SBI Student Loan Scheme
SBI Education Loan Interest Rate Calculation
SBI education loan interest rate varies based upon the loan scheme, maximum amount, type of college/institution etc. For example, the interest rate for the SBI scholar education loan scheme which is provided to study in top institutes in India like IIT, IIM etc varies depending on the college selected. The rate of interest is determined by adding the CRP (Credit Risk Premium) to the EBR (External Benchmark-linked Rate).
Check the example below how to calculate the SBI education loan interest rate:
Current EBR- 9.15%
Spread or CRP- 2.5%
Effective Interest Rate = EBR + CRP = 9.15% + 2.15% = 11.30%
Benefits of Choosing SBI for Education Loans
SBI offers a variety of education loan products to suit different needs. The SBI Education Loan Interest Rate is highly competitive compared to other banks and financial institutions in India. Here are some key benefits that make SBI education loans stand out:
- Flexible Repayment Options: SBI offers an extended repayment period of up to 15 years, allowing students to repay the loan comfortably after completing their studies. Additionally, there is a moratorium period of 6 months after completing the course or 12 months after securing employment, whichever is earlier. This flexibility is crucial for students who are still looking for employment after completing their studies.
- Higher Loan Amount: The SBI Education Loan can cover up to ₹50 lakh for studies in India and up to ₹1.5 crore for studies abroad. This makes it an ideal option for students looking to pursue higher education at prestigious international institutions.
- No Processing Fees for Loans Up to ₹20 Lakh: For students applying for loans of up to ₹20 lakh, SBI does not charge any processing fees, making it more affordable for students from diverse backgrounds.
- Interest Rate Concessions for Female Students: SBI offers interest rate concessions to female students, making it a more gender-inclusive and attractive option for women seeking financial support for higher education.
Understanding SBI Education Loan Eligibility Criteria
To apply for an SBI Education Loan, the student must meet certain eligibility criteria. These criteria determine whether the student qualifies for the loan and how much they can borrow. Below are the key eligibility requirements for the SBI Education Loan:
- Age Limit: For studies in India, the applicant must be between 18 to 35 years old. For studies abroad, the age limit is extended to 18 to 45 years.
- Admission to Recognized Institutions: The student must have secured admission to a recognized educational institution, either in India or abroad. The course must be recognized by the government or other regulatory bodies to ensure the student’s eligibility for the loan.
- Co-Applicant Requirement: A co-applicant, usually a parent or guardian, is required to apply for the loan along with the student. The co-applicant’s financial stability and creditworthiness play a role in determining the loan amount and interest rate.
Application Process for SBI Education Loans
The application process for an SBI Education Loan is simple and straightforward. Here are the steps involved:
- Online Application: Applicants can apply for an SBI Education Loan through the official SBI website. The process begins with filling out an online application form with necessary details about the student and the course.
- Document Submission: After submitting the online application, applicants need to submit various documents, including proof of admission, academic records, identity proof, and address proof. The bank may also ask for the student’s previous academic performance and details about the institution they plan to attend.
- Processing and Approval: Once the bank receives the application, it will be processed by the concerned branch. The bank may conduct a credit assessment and require the applicant to attend a personal discussion or interview. After successful processing, the loan is sanctioned, and a loan sanction letter is issued, detailing the loan amount, interest rate, repayment terms, and other relevant details.
Factors Affecting SBI Education Loan Interest Rate
SBI education loan interest rate varies upon a lot of factors like economic factors, RBI guidelines, selected course and institute, credit history and score of the student, loan amount etc. The bank determines the floating rate of interest based on all these factors and the interest rate may change from time to time. Check some of the major factors affecting SBI Education loan interest rate:
Credit Score of the Applicant
The credit score of the student and their co-signer plays a major role in determining the interest rate on an education loan. A higher credit score indicates better creditworthiness, and the banks are more likely to offer lower interest rates to individuals with a good credit history. A good credit score is an assurance to the lender that the borrower is financially responsible and poses a lower risk.
Type of Institution and Course
The type of educational institution and the specific course pursued can impact the interest rate on an education loan. For example, the SBI Scholar loan to study in top institutes in India is provided at a lower interest rate if you are getting admission into IIMs and IITs. The bank may differentiate between professional courses, such as engineering or medical studies, and general degree programs.
Loan Amount and Tenure
The amount of the loan and the repayment tenure are key factors affecting the interest rate. Generally, larger loan amounts may attract higher interest rates. Similarly, the tenure chosen for repayment can affect the interest rate, with longer tenures often associated with higher rates.
Economic Conditions and Government Policies
The overall economic conditions and government policies can impact education loan interest rates. Changes in economic indicators, inflation rates, and government initiatives to promote education can influence the interest rates set by financial institutions. Government-backed subsidy programs or interest rate reduction schemes may also play a role in determining the cost of education loans for students.
Also Read: Want to apply quickly for a loan online? Check here all about YONO SBI education loan to study abroad
Repayment of SBI Education Loan
The repayment terms for SBI Education Loans are designed to be flexible and student-friendly. The SBI Education Loan Interest Rate is charged on a reducing balance basis, meaning that the interest is calculated only on the outstanding loan balance, which reduces over time as the borrower repays the loan.
The repayment schedule begins after the completion of the moratorium period, which is generally 6 months after course completion or 12 months after securing employment, whichever is earlier. During this period, students are not required to make any payments, giving them the time to find a job and stabilize their finances.
The loan repayment period can extend up to 15 years, providing borrowers with ample time to repay the loan comfortably. Additionally, SBI offers various options such as EMI facilities to make the repayment process manageable.
FAQs on SBI Education Loan Interest Rate
The SBI education loan interest rate starts from 8.25% per annum, depending on the loan scheme, course, and institution. These rates may change based on the bank’s internal policies and economic conditions.
SBI may have different interest rates based on the loan amount and the type of education program. However, at present the interest rate is similar for loan amounts up to INR 1.5 crore.
SBI charges interest on education loans at a floating rate linked to a base rate or an external benchmark. The interest is calculated on a reducing balance method.
SBI often provides interest rate concessions or discounts for specific categories of borrowers, such as female students. Also, if you are availing insurance products such as SBI RiNn Raksha or any other policy that falls in favour of the bank then a rebate of 0.5% will be provided on the interest rate.
Yes, the interest rates are subject to periodic revisions based on market conditions and other factors. As it provides education loans at a floating rate of interest.
Yes, under the SBI Scholar Loan Scheme, students admitted to top institutions like IITs and IIMs receive lower interest rates (starting at 8.15%), while other institutions may have rates up to 9.65%.
Yes, SBI provides a 0.50% rebate on education loan interest rates for female students.
Key factors influence the SBI education loan interest rate include:
– Credit score of the applicant and co-applicant
– Type of institution and course
– Loan amount and tenure
– Economic conditions and RBI guidelines
For loans up to ₹20 lakh, SBI does not charge any processing fees, making it cost-effective for students.
SBI education loan interest rate is calculated using the formula:
Effective Interest Rate = EBR (External Benchmark-linked Rate) + CRP (Credit Risk Premium).
For example, if EBR is 9.15% and CRP is 2%, the final interest rate would be 11.15%.
SBI provides up to ₹50 lakh for studies in India and up to ₹1.5 crore for studying abroad under specific schemes.
The repayment period can extend up to 15 years, with a moratorium period of 6 months after course completion or 12 months after securing employment.
All SBI education loans come with a floating interest rate, which means it may change based on economic conditions and bank policies.
Yes, apart from the female student concession, students who opt for SBI RiNn Raksha or any assigned life insurance policy in favor of the bank get an additional 0.50% rebate on interest rates.
SBI education loan interest rate is low as compared to other private or public sector banks. However, always compare the various schemes for interest rates and other terms and conditions before finalising the 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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