Union Bank education loan interest rates are competitive, making it one of the most preferable choices for study abroad education loans. It provides loans for UG and PG courses under dedicated schemes like the Union Education Premier Abroad scheme and the Union Education scheme. These loans cover tuition fees, living expenses, travel costs, and other related expenses.
Union Bank education loan interest rate starts from 8.35% p.a., depending on factors like the loan amount, loan type, credit score, and net monthly income. The bank offers competitive rates to help students manage repayment effectively. Several factors like the loan amount, type of loan, credit score, net monthly income etc. determine the exact interest rate you get on Union Bank loans. Let’s understand all the details about Union Bank’s education loan interest rate.
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What is Union Bank Education Loan Interest Rate?
The Union Bank education loan interest rate ranges between 8% and 13% depending on the course, university, loan amount, repayment period etc. Also, the student loan interest rates Union Bank keeps revising in case you have taken the education loan on a floating rate of interest. Check the details of Union Bank Education loan interest rate below:
| Name of the Scheme | Maximum Loan Amount (INR) | Rate of interest |
| Union Education Premier Abroad | 40 lakhs (without collateral) | 8.55% to 9.50% |
| Union Education Premier Abroad | 40 lakhs to 1.5 crore (with collateral) | 10.80% |
| Union Education – Study In India And Abroad | No restriction on the maximum amount of loan that can be sanctioned under the education loan scheme | 9.30% to 10.45% |
Union Bank Education Loan Interest Rate Calculation
The Union Bank education loan interest rate is based upon the ongoing EBLR + specific spread fixed by the bank. EBLR stands for external benchmark lending rate. It refers to a system where the interest rates on loans offered by banks are linked to external benchmark rates.
This is a mechanism adopted by banks or financial institutions to ensure transparency and efficiency in the transmission of monetary policy changes to the real economy. The final interest rate comes out by adding the spread with the EBLR.
For example, if the RBI’s policy rate is 7%, and the bank or lending institution applies a spread of 3%, the final interest rate on the loan would be 10%.
7% (EBLR) + 3% (Spread) = 10% (Final Interest Rate)
Union Bank Education Loan Interest Rate for Male and Female Students
The interest rate for Union Bank student loans for male students is slightly higher than the female students. The interest rate varies based on the loan amount, schemes like CGFSEL, and EBLR and the spread. Also, the education loan provided to all the students will be at a floating rate of interest. No fixed-interest rate loan is offered by the bank at present. Check the Union Education Loan interest rate below:
| For Males | |
| Loan Amount (INR) | Rate of Interest |
| Up to 4 lakh | EBLR + 3.25% = 10.45% |
| 4 lakh to 7.5 lakh | EBLR + 3% = 10.20% |
| Above 7.5 lakh | EBLR + 2.10 = 9.30% |
| For Females | |
| Loan Amount (INR) | Rate of Interest |
| Up to 4 lakh | EBLR + 2.75% = 9.95% |
| 4 lakh to 7.5 lakh | EBLR + 2.50% = 9.70% |
| Above 7.5 lakh | EBLR + 1.60 = 8.80% |
Note: *EBLR as on 11-12-2023 is 9.25%
Also Read: Applied for an education loan from Union Bank? Check all about Union Bank Education Loan Disbursement Process
Union Bank Education Loan Interest Rate Comparison with Other Banks
Union Bank of India (UBI) generally offers competitive interest rates on education loans compared to other banks. Here’s a comparison:
- General Comparison: UBI and Central Bank of India may offer some of the lowest interest rates, starting at 8.35%.
- Against SBI: UBI generally offers better interest rates compared to SBI. For example, UBI’s rates range from 9.85% to 10.5%, while SBI’s start at 11.15%.
- Specific Rates:
- For secured loans up to INR 40 lakh for listed universities, UBI’s interest rates start at 9.25% with 100% collateral and 9.75% otherwise.
- For non-listed universities with 100% collateral, the rate starts at 11.35% for male applicants and 10.85% for female applicants.
- EMI for an INR 20 lakh loan with a 7-year tenure is INR 31,272 at Union Bank of India.
- Other Banks: Several banks, including Bank of Baroda, Punjab National Bank, Canara Bank, and Indian Bank, offer education loans with interest rates between 8.15% and 8.8%2. HDFC Bank and ICICI Bank have higher rates, starting at 9.5% and 10.25% respectively.
Factors Affecting Education Loan Interest Rate
Certain factors affect the interest rates on education loans in India. The specific terms and conditions may vary among lenders, but here are some common factors that can affect education loan interest rates:
Base Rate/External Benchmark Rate
Education loan interest rates in India are often linked to a base rate or an external benchmark rate, such as the Marginal Cost of Funds based Lending Rate (MCLR) or the Repo Rate. Changes in these benchmark rates can impact the interest rates on education loans.
Loan Amount and Tenure
The loan amount and tenure chosen by the borrower can affect the interest rate. Usually, the bank offers low interest rates on higher loan amounts. Smaller loan amounts may attract higher rates of interest. For example, if you have applied for an education loan of INR 6 lakh, Union Bank will charge a 10.20% interest rate per annum. However, you will get the loan at 9.30% if the total loan amount exceeds INR 7.5 lakhs.
Course and University
Another factor that determines the interest rate on an education loan is the type of course chosen and the university selected. Banks offer interest rate concessions to the applicants who secure admission to the top 100/200 universities in courses that have chances of generating higher income.
Collateral and Co-applicant
Providing collateral or having a co-applicant with a stable financial background can positively impact the interest rate. It reduces the risk for the lender, leading to potentially lower rates. Usually, the rate of interest on a secure loan is lower than that of an unsecured loan. This is because the bank senses more risk in an unsecured loan.
Also Read: Do you know credit score can also affect loan refinancing or balance transfer? Check this blog and understand credit scores and its impact on education loan refinancing
FAQs
Union Bank education loan interest rate varies between 8.5% to 11.5% based on the type of loan, loan amount and repayment period.
In the context of banking and lending, EBLR (External Benchmark Lending Rate) means that the interest rates charged on loans are directly tied to an external benchmark, such as a policy rate set by the central bank. The idea is to make interest rate movements more responsive to changes in the broader financial market and economic conditions.
Yes, Union Bank of India provides a 0.5% interest rate rebate for female students. Also, the bank provides interest subsidy programs funded by the federal government to students from economically disadvantaged groups and minority populations.
Several factors can affect the interest rate on a Union Bank education loan, including fluctuations in the External Benchmark Lending Rate (EBLR), the total loan amount, the repayment period, the applicant’s credit score, and the type of loan8. The interest rates are also influenced by whether the loan is secured or unsecured and the type of university the applicant will be attending.
All female students applying for an education loan from Union Bank will get a rebate of 0.5% in the interest rate.
You can visit the nearest branch of Union Bank to apply for an education loan. If you want to apply online for an education loan, you need to visit the Vidya Lakshmi portal Union Bank of India.
The factors that affect the interest rate are fluctuations in EBLR, total loan amount, repayment period, credit score of the applicant, type of loan etc.
This was all about Union Bank’s education loan interest rate. Before applying for an education loan, it’s very important to carefully review the terms and conditions of the loan, compare interest rates, and understand the impact of different factors on the overall cost of the loan.
To know more about education loan interest rates, 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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