Know Propelld Education Loan Interest Rates
At Propelld, we believe in clarity and thus, transparency is one of our core strengths. We disclose our rates and how they work, so you know exactly what you’re paying and why. This page explains:
1. Interest rate slabs for different loan types and what is APR
2. The difference between reducing balance and flat rate and why it is important to understand these.
3. Worked examples explaining the calculation of education loan and EMI.
Education Loan Interest Rate at Propelld
We follow a profile-based pricing model. Meaning your course, country, and co-applicant profile influence your rate. However, all profiles fall under a certain slab range as follows:
What Makes Propelld Different?
1. No hidden hikes after sanction.
2. Rates are disclosed upfront in a flat band (not “starting from” gimmicks).
3. Students with CIBIL <650 can still be approved with flexible underwriting.
What is APR (Annual Percentage Rate)?
APR is the all-inclusive yearly cost of your loan, expressed as a percentage. It includes not just the nominal interest rate but also any processing fees, insurance, or other charges.
1. Why Does APR Matter?
Many lenders advertise only the base rate, which can make loans appear cheaper than they really are. With APR, you get a true picture of what you’ll pay annually.
2. Propelld’s Approach
We publish APR openly for all our products -domestic education loans, abroad loans, coaching finance, and upskilling programs. Importantly, no hidden charges or bundled insurance are added.
Check your Education Loan EMI
Types of Interest Calculation
When evaluating education loans, it’s important to understand how your interest is calculated. Different lenders use different methods, and this can significantly impact the total cost of your loan. At Propelld, we follow transparent practices and highlight these terms clearly so students and parents can make informed decisions.
1. Reducing Balance Method
- What it means: Interest is calculated on the outstanding principal balance after each EMI is paid. Over time, the interest portion decreases while the principal repayment increases.
- Why it matters: This is considered the fairest and most student-friendly method, as you only pay interest on the amount you still owe — not on the original principal.
- Propelld’s approach: All Propelld loans (domestic, abroad, coaching, upskilling) are structured on a reducing balance basis, ensuring students save more over the life of the loan.
2. Flat Rate Method
- What it means: Interest is calculated on the entire original loan amount throughout the loan tenure, regardless of how much principal you’ve already repaid.
- Why it matters: While flat rate loans often appear to have lower advertised interest rates, the actual cost (when converted to APR) is much higher. Many informal lenders use this method.
- Propelld’s approach: We do not use flat rate interest calculations, because they are not transparent and can mislead students. By avoiding this, Propelld ensures that borrowers benefit from a genuine lower cost of borrowing.
Always compare loans based on APR and check whether the lender uses a reducing balance or flat rate method.
Most lenders don’t clarify APR vs reducing balance. We explain it openly so students know the effective cost.
How Does the Type of ROI Calculation Affect the Interest you Pay?
Consider an education loan of ₹5,00,000 for 5 Years @ 12%. Let’s see how different types of interest rates calculation affect your total cost:
1. Reducing Balance Method (used by Propelld)
- EMI: ~₹11,122
- Total Repayment: ₹6,67,333
- Total Interest Paid: ₹1,67,333
Fair, student-friendly - you only pay interest on the outstanding balance.
2. Flat Rate Method (used by informal lenders)
- EMI: ~₹13,333
- Total Repayment: ₹8,00,000
- Total Interest Paid: ₹3,00,000
Looks cheap upfront but costs much more in reality.
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