State Bank of India (SBI) is the largest public sector bank in the country and one of the renowned banks for education loans. 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 interest rate such as the credit score of the applicant, loan amount etc.
SBI provides education loans to study abroad under its Global Ed-vantage scheme, SBI Shaurya Education Loan scheme and SBI Student Loan scheme. All the schemes have different eligibility and features. Let’s check the interest rate of education loans from this bank under different schemes.
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What is the SBI Education Loan Interest Rate?
As per the information provided by the bank, the interest rate on education loans from this bank ranges between 11% to 13%. The bank provides education loans at a floating rate of interest which is subject to change every quarter depending on the economic situation. 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. 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:
- 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:
Current EBR- 9.15%
Spread or CRP- 2.5%
Effective Rate of Interest: [9.15 + 2.15]% = 11.30%
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.
Also Read: Want to apply quickly for a loan online? Check here all about YONO SBI education loan to study abroad
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.
FAQs
The current interest rate for SBI education loans under different schemes is around 11-12%. However, this may vary depending on the scheme of loan total amount and the institute selected.
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.
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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