Several banks in India offer competitive education loan interest rates. As of now, the State Bank of India (SBI) and HDFC Bank are known for offering some of the lowest interest rates on education loans.
Currently, SBI starts its rates from 8.15% p.a., while HDFC Bank offers rates beginning at 9.50% p.a. The exact interest rate may vary based on factors like the applicant’s credit score, collateral type, and the specific course.
Let’s take a closer look at the education loan interest rates from some of the most popular banks in India.
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SBI Education Loan Interest Rates
SBI offers various loan schemes with floating rates that have the lowest interest rates on education loans. These rates are linked to the External Benchmark Rate (EBR), currently set at 9.15%. The effective interest rate on certain loan schemes ranges from as low as 8.05% to 11.75%.
The bank also offers discounts for female students and to those who avail of SBI RiNn Raksha for education loans (a life insurance policy with SBI). Applicants who apply for SBI education loans above certain amounts and have an excellent CIBIL score are also eligible for interest rate concession.
Let’s check the details of the SBI education loan interest rates on various schemes, including domestic and international studies, skill development, and defence personnel, with varying terms based on loan size and collateral.
Also Read: Here are the floating interest rates in education loans including meaning, advantages, calculator, examples and more.
SBI Student Loan Scheme
SBI’s student loan scheme is for Indian Nationals pursuing higher education in India or abroad where admission has been secured. It covers expenses like tuition fees, books, travel, and living costs. The loan amount varies based on the course and the institution, with different eligibility criteria for collateralized and non-collateralized loans.
Interest rates on this scheme start from 11.15% p.a. It considers EBR and CRP, which is the Credit Risk Premium charged by the bank. An additional 0.50% concession for SBI Rinn Raksha or any SBI policyholder also applies.
| Loan Limit | EBR | CRP | Effective Interest Rate | Concessions |
| Up to INR 7.5 Lakhs | 9.15% | 2.00% | 11.15% p.a (Floating) | 0.50% concession for female students |
| Above INR 7.5 Lakhs | 9.15% | 2.00% | 11.15% p.a (Floating) | 0.50% concession for female students |
SBI Scholar Loan Scheme
The SBI Scholar Loan offers up to 100% financing for higher education at premier Indian institutions. It is available for specific courses at top universities within India, excluding overseas studies.
The loan covers tuition fees, hostel costs, and other essential expenses. Interest rates are competitive, and eligibility depends on the institution and course. This scheme is ideal for students aiming to study in prestigious Indian institutions but lacking the necessary funds.
| Institute Type | EBR | CRP | Interest Rate Discount/Premium | Effective Interest Rate |
| AA (IITs) | 9.15% | 0.00% | -1.05% to -1.00% | Starts at 8.10% (Floating) |
| Other Institutes | 9.15% | 0.05% | -1.15% to -1.05% | Starts at 8.05% (Floating) |
| A (IITs) | 9.15% | 0.00% | -1.00% | 8.15% (Floating) |
| Other Institutes | 9.15% | 0.50% | -1.00% | 8.65% (Floating) |
| B (All NITs) | 9.15% | 0.50% | -1.00% | 8.65% (Floating) |
| Other Institutes | 9.15% | 1.00% | -1.00% | 9.15% (Floating) |
| C (All NITs) | 9.15% | 0.50% | -1.00% | 8.65% (Floating) |
| Other Institutes | 9.15% | 1.50% | -1.00% | 9.65% (Floating) |
SBI Skill Loan Scheme
SBI’s skill loan scheme is a term loan granted to Indian Nationals for pursuing Skill development courses in India. The maximum loan is offered up to INR 1.5 lakhs at interest rates starting from 10.65% p.a.
| Loan Limit | EBR | CRP | Effective Interest Rate | Concession |
| Up to INR 1.5 Lakhs | 9.15% | 1.50% | 10.65% p.a (Floating) | No further concession |
SBI Global Ed-Vantage Scheme
The SBI Global Ed-Vantage Scheme offers up to INR 1.5 crore for students pursuing higher education abroad at reputed universities. The loan comes with competitive interest rates and tax benefits under Section 80(E) for interest payments. An additional 0.50% applies to female students.
It is designed for overseas studies in top courses and can be applied through the Vidya Lakshmi portal. The scheme provides financial support for tuition, living expenses, and more, with a focus on making international education accessible to Indian students.
| Loan Limit | EBR | CRP | Effective Interest Rate | Concession |
| INR 7.50 Lakh to INR 1.5 Cr | 9.15% | 2.00% | 11.15% p.a (Floating) | 0.50% for life insurance holders |
SBI Takeover Education Loan Scheme
| Loan Limit | EBR | CRP | Effective Interest Rate | Concession |
| INR 10 Lakh to INR 1.5 Cr | 9.15% | 2.00% | 11.15% (Floating) | 0.50% for life insurance holders |
| Additional 0.50% for female students |
SBI Shaurya Education Loan Scheme
The SBI Shaurya Education Loan is designed for the children of defence and Indian Coast Guard personnel. It offers financial assistance for higher education in both India and abroad, with loan amounts up to INR 1.5 crore.
The interest rate starts at 11.15% p.a. The loan covers tuition, living expenses, and other study-related costs. It is available for a variety of eligible courses and provides concessions for girls and policyholders under SBI Rinn Raksha.
| Loan Limit | EBR | CRP | Effective Interest Rate | Concession |
| Up to INR 7.5 Lakhs | 9.15% | 2.00% | 11.15% (Floating) | 0.50% for girl students |
| INR 7.50 Lakh to INR 1.5 Cr (Secured) | 9.15% | 2.00% | 11.15%(Floating) | 0.50% for life insurance holders |
| INR 7.50 Lakh to INR 1.5 Cr (Unsecured) | 9.15% | 2.60% | 11.75% (Floating) | 0.50% for girl students |
HDFC Bank Education Loan Interest Rates
HDFC Bank is another bank offering the lowest interest rates on education loans. It starts at 9.50% p.a. The interest rates are linked to the External Benchmark Lending Rate (EBLR). It may vary depending on the type of loan (secured or unsecured), the rating of the course/institution, or the student’s profile.
Usually, simple interest is charged on student loan interest rates during the study period and moratorium, with the option to defer interest payment until the repayment begins. There are no processing fees for loans up to INR 7.5 lakhs, and legal/incidental charges and stamp duties apply as per state regulations.
Also Read: Discover the advantages of simple interest on an education loan. Calculate interest easily and make informed decisions about repayment.
Comparative Analysis of HDFC Bank Education Loan Interest Rates (July 2024 – Sept 2024)
HDFCs APR (Annual Percentage Rate) has generally remained between 8.00% and 13.50%. It means that strategically planning for when interest rates are at their lowest can make a significant impact on repayment amounts.
Current Interest Rates (July 2024 – Sept 2024)- HDFC Bank offers interest rates for education loans ranging from 9.00% to 13.00%, with an average rate of 10.83% during this period.
| Rate Type | Min APR | Max APR | Avg APR |
| Interest Rate | 9.00% | 13.00% | 10.83% |
Below is a comparative analysis of the APR for HDFC Bank’s education loans over the last few months-
| Month/Year | Min APR | Max APR | Avg APR |
| July 2024 – Sept 2024 | 9.00% | 13.00% | 10.83% |
| April 2024 – June 2024 | 8.75% | 12.75% | 10.25% |
| Jan 2024 – March 2024 | 9.25% | 13.50% | 11.00% |
| Oct 2023 – Dec 2023 | 8.50% | 13.00% | 10.50% |
Other Banks Offering Lowest Interest Rates on Education Loans
Some of the leading banks offering the lowest rates apart from SBI and IDFC Bank include Bank of India, Bank of Maharashtra, IDBI Bank, Bank of Baroda, and many others. Their interest rates also start as low as 8.50% p.a.
These banks provide various loan schemes with flexible terms, processing fees, and concessions, tailored to different educational needs, both for domestic and international studies. Check out the interest rates offered by these banks-
| Bank | Interest Rates |
| Bank of India | 11.05% p.a. to 11.85% p.a. |
| Bank of Maharashtra | 8.10% p.a. to 11.30% p.a. |
| IDBI Bank | 8.55% p.a. to 11.15% p.a. |
| Bank of Baroda | 8.15% p.a. to 12.50% p.a. |
| Canara Bank | 9.25% p.a. |
| Indian Overseas Bank | 9.75% p.a. to 10.25% p.a. |
| ICICI Bank | 10.25% p.a. onwards |
| Karnataka Bank | 10.48% p.a. onwards |
| UCO Bank | 11.30% p.a. to 11.70% p.a. |
| Axis Bank | 13.70% p.a. to 15.20% p.a. |
| Federal Bank | 12.55% p.a. onwards |
| Kotak Mahindra Bank | Up to 16% p.a. |
| Tamilnad Mercantile Bank | 11.75% p.a. to 13.00% p.a. |
| Karur Vysya Bank | 12.05% p.a. to 14.55% p.a. |
| IDFC FIRST Bank | 9.50% p.a. onwards |
How Can I Get the Lowest Interest Rates on Education Loans?
To secure the lowest interest rates on education loans, you should compare rates from multiple banks and financial institutions. Make sure to opt for loans from banks offering competitive rates for courses at top institutions. For example, Punjab National Bank (PNB) offers rates as low as 8.45% for specific courses at top colleges.
Here are some ways you can apply for the lowest interest rates with the banks-
- Apply with a co-applicant. Having a co-borrower with a strong credit history and securing the loan with collateral can further reduce the rate.
- Maintain a good credit score. A higher credit score can help you negotiate better terms and lower interest rates with lenders.
- Apply for loans at the right time. Check out when banks offer special schemes or discounts that can help secure the best deal.
- Evaluate repayment terms. Longer repayment tenures may lead to higher overall interest payments despite lower EMIs, so choose a tenure that balances affordability with total cost.
Alternatively, you can apply with Fly Finance, an online education loan platform. As of October 15, 2024, Fly Finance’s interest rate for education loans abroad is 9.25% for amounts up to 1 crore. Your dedicated loan expert negotiates with the partnered lenders to make sure that you get the best interest rates possible.
This was all about the banks offering the lowest interest rates on education loans. To learn more about education loans, the best bank accounts for students, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
FAQs
Central Bank of India provides competitive rates starting at 8.30% for female students, along with additional concessions.
Government banks generally offer lower interest rates, typically ranging from 8.05% to 11.75%, compared to private banks that start around 8.75%.
Processing fees vary by bank; typically, they range from 0.5% to 1% of the loan amount, with some banks waiving fees for specific schemes.
Yes, several banks, including SBI and PNB, provide interest rate subsidies for meritorious students based on academic performance.
Most banks offer flexible tenures ranging from 5 to 15 years, allowing borrowers to choose a repayment period that suits their financial situation.
Yes, borrowers with a strong credit history may negotiate better terms and lower interest rates with their chosen bank.
Many banks, including SBI and HDFC Bank, have specific schemes tailored for students pursuing education abroad, often with competitive rates.
Most education loans include a moratorium period during which no repayments are required, typically lasting until course completion plus an additional six months.
A higher credit score can significantly improve your chances of approval and may help secure lower interest rates on your education loan.
To secure the lowest interest rates on education loans, you should compare rates from multiple banks and financial institutions. Opt for loans from banks offering competitive rates for courses at top institutions.
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