High quality education has become expensive in the last couple of years. Now a days, parent’s savings are not sufficient to fund their children high school and college education. Education loan is the best way to meet their child’s higher education expenses. So in this post, we are providing a detailed comparison of Education Loan Interest Rate of SBI / HDFC / PNB / ICICI Bank in India.
All the children who wish to avail education loans to pursue their studies without disturbing their finances can check the latest education loan interest rates. Children can take education loan for courses either in India or abroad. For unemployed students, their guardians and parents need to be their guarantors.
In case you are looking for an education loan, the interest rates ranges from 8.45% to 15.2% per annum. These loans comes up with flexible tenures of upto 15 years. The amount which students can borrow can be Rs. 1.5 crore or more as per the bank policies.
Education Loan Interest Rate Comparison in India
Below is the complete education loan interest rate comparison of various banks in India:-
1. State Bank of India (SBI)
SBI is the India’s largest bank which offers education loan services. This bank offers term loan to Indian nationals to study in India or abroad where student has taken admission. According to SBI policies, the repayment period is upto 15 years after course period + 12 months of repayment holiday. Moreover, there is no processing or any upfront charges on education loans.
Expenses Covered
The following expenses are covered in SBI Education Loans:-
- Fees payable to school / college / hostel
- Examination / library / laboratory fees
- Purchase of books / equipment / instruments / uniforms, purchase of computers essential for completion of course (maximum 20% of total tuition fees payable for completion of course)
- Caution deposit / building fund / refundable deposit (max 10% of tuition fees for entire course)
- Travel expenses / passage money for studies abroad
- Cost of 2 wheeler upto Rs. 50,000
- Any other expenses required to complete course like study tours, project work etc.
SBI Education Loan Interest Rate
| SBI Student Loan Scheme | ||||
|---|---|---|---|---|
| Loan Limit | 3 Year MCLR | Spread | Effective Interest Rate | Reset period |
| Upto Rs. 7.5 lakhs | 8.25% | 2% | 10.25% | No reset |
| Concession | 0.5% concession in interest for girl students | |||
| Above Rs. 7.5 lakh | 8.25% | 2% | 10.25% | No Reset |
| Concession | 0.5% concession in interest for girl students | |||
| 0.5% concession for students availing of SBI Rinn Raksha or any other existing policy in favour of SBI bank | ||||
2. Punjab National Bank (PNB)
PNB offers three education loan schemes namely PNB Saraswati, PNB Pratibha & PNB Kaamgar. All the Indian nationals can avail these loans to meet education expenses. These expenses includes tuition fees, purchase of books, equipments, computer, travelling, study tours, boarding, lodging besides all of fees.
PNB Saraswati – It is a regular scheme to pursue higher studies in India or abroad. This education loan scheme aims to provide financial support to meritorious students to pursue higher education.
PNB Pratibha – In this scheme, collateral free education loans are provided at lower interest rates for higher studies in India or abroad.
PNB Kaamgar – This scheme aims to provide financial support from banking system to those having minimum educational qualification as required by institution / organization running the course eligible under scheme.
PNB Bank Education Loan Interest Rate
| PNB Udaan Education Loan Scheme | Loans upto Rs. 7.5 lakh covered under CGFSEL Scheme | RLLR + 2.15% |
|---|---|---|
| Loans above Rs. 7.5 lakh | RLLR + 2.75% | |
| Loans irrespective of amount where 100% tangible collateral security in shape of IP, enforceable under SARFAESI Act and / or liquid security is available | RLLR + 2% | |
| Loans for pursuing education from premium foreign universities and educational institutes (200) under PNB Udaan – Loan upto 7.5 lakh covered under CGFSEL | RLLR + 2% | |
| Loans for pursuing education from premium foreign universities and educational institutes (200) under PNB Udaan – Others | RLLR + 2% | |
| Education Loan to children of PNB’s Employee is either co-borrower or guarantor | RLLR + 0.25% | |
| PNB Pratibha admission to other than IITs, IIMs, XLRI Jamshedpur and NITs | Loan upto Rs. 7.50 lakh under CGFSEL | RLLR + 0.75% |
| Loan above Rs. 7.5 lakh | RLLR + 0.25% | |
| PNB Pratibha admission to IITs, IIMs, XLRI Jamshedpur and NITs | Loan upto Rs. 7.50 lakh under CGFSEL | RLLR + 0.65% |
| Loan above Rs. 7.5 lakh | RLLR + 0.15% | |
| PNB Pravasi Shiksha Loan | RLLR + 2.15% | |
| PNB Honhaar | Loan upto Rs. 10 lakh | RLLR + 2.15% |
| PNB Bihar Student Credit Card Scheme | Loan upto Rs. 4 lakh | RLLR + 2% |
| Concessional Loan to Persons with Disabilities | Women | 3.5% |
| Others | 4% | |
| No further concession in interest shall be available to any category of borrowers for regualr servicing of interest during moratorium period | ||
3. HDFC Bank
HDFC bank sanctions education loans upto Rs. 10 lakh for studies in India. No collateral is required to be submitted as security for loans upto Rs. 7.5 lakhs. Any education loan amount which exceeds Rs. 7.5 lakh would require collateral security in form of residential properties, HDFC Bank fixed deposit, LIC, NSC or KVP policy. Borrowers availing loans upto Rs. 7.5 lakh can extend their repayment tenure upto 10 years and for loan amount above Rs. 7.5 lakh the tenure can be chosen upto 15 years after moratorium period.
Interest Rate
| Minimum APR | 9% |
| Maximum APR | 13.86% |
| Average APR | 11.57% |
4. ICICI Bank
ICICI bank presents education loans upto Rs. 50 lakh for your educational requirements in India and upto Rs. 1 crore for overseas. You can visit the nearest ICICI Bank branch, fill the form and get started with the loan approval process you can apply online as well. Loans are offered for domestic institutes/ international institutes and both Under Graduate (UG), Post Graduate (PG) courses are covered.
Other expenses like student exchange travel expense, laptop are also covered. The loans also ensure pre-visa disbursal for students applying for overseas education. The bank also assures preferential forex rates for international disbursements.
Interest Rate
| UG Domestic & International | PG Domestic & International | |
|---|---|---|
| Interest Rate | Starting at 11.75% p.a | Starting at 11.25% p.a |
| Loan tenure without collateral | Upto 5 years post course period + 6 months | Upto 8 years post course period + 6 months |
| Loan tenure with collateral | Upto 7 years post course period + 6 months | Upto 10 years post course period + 6 months |
| Maximum loan requirement | Upto Rs. 50 lakh for domestic courses & upto Rs. 1 crore for international courses | |
| Collateral requirement | As per the institute. Collateral free loans for select institutes : upto Rs. 20 lakh for UG & upto Rs. 40 lakh for PG courses | |
| Moratorium period | As per course and institute | |
| Margin | No margin upto Rs. 20 lakh, ranging from 5% to 15% margin for loans above Rs. 20 lakh (margin can be FD / scholarship / initial fee paid to institute) | |
It is important to note that an education loan helps you not only in finance of your foreign studies but it can save you a lot of tax as well. If you have taken an education loan and are repaying the same, then the interest paid on that education loan is eligible for deduction from the total income under Section 80E of the Income Tax Act. However the deduction is provided only for the interest part of the EMI. There is no limit on the maximum amount that is allowed as deduction. You, however, need to obtain a certificate from your bank.