Lowest Education Loan Interest Rate 2025
Comparing education loan interest rates across various banks and NBFCs in India is essential for making informed financial decisions that align with individual needs and financial capabilities.
Analyze and compare interest rates from various lenders. Make informed decisions and optimize your financial resources to minimize long-term debt obligations.
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Which Bank Provides Lowest Interest on an Education Loan ?
To answer the above question, let's have a look at the list of banks offering education loans with the most competitive interest rates.
Education Loan Interest Rate Comparison
Bank of Baroda Education Loan Interest Rates
Bank of Baroda offers education loans with high loan amounts, zero collateral requirements for select schemes, and extended repayment tenures. It also provides special interest rate concessions for female students and those admitted to premier institutions.
Key Features:
- Processing Fee: Nil
- Security: Required
- Co-borrowers: Parents or guardians
- Margin: 5% for loans above INR 4 lakh
- Concession: 0.50% discount for female applicants
State Bank of India Education Loan Interest Rates
State Bank of India (SBI) provides education loans with interest rate concessions for meritorious students and those availing of a loan under government subsidy schemes. The bank offers a unique SBI Scholar Loan Scheme for students admitted to top-tier institutes like IITs, IIMs, and NITs.
Key Features:
- Processing Fee: NIL charges for loan amount below Rs.20 lakh
- Security: Up to Rs. 7.50 lakh: Co-obligation of a parent or guardian, no security needed.
- Co-borrowers: Parents or guardians
- Margin: Up to Rs. 4 lakh: No margin required.
- Concession: 0.50% concession in interest for girl students
ICICI Bank Education Loan Interest Rates
ICICI Bank facilitates quick loan approvals with minimal documentation and offers 100% financing for select institutions. It provides unsecured loans up to a higher limit, making it ideal for students seeking hassle-free funding for studies abroad.
Key Features:
- Processing Fee: Up to 2%
- Security: Fixed deposit, property value, or existing loans
- Co-borrowers: Parents or guardians
- Margin: Nil for premier institutes; up to ₹20 lakh for others (Accepted as FD, scholarships, or initial fee paid)
- Concession: I-SMART education loans for studies in Canada offer lower rates
Central Bank of India Education Loan Interest Rates
Central Bank of India offers education loans under the Cent Vidyarthi Scheme, covering tuition fees, exam fees, and even living expenses for students. It also provides interest subsidies under government-backed schemes for economically weaker sections.
Key Features:
- Processing Fee: Nil
- Concession: Special rates for female students
Bank of India Education Loan Interest Rates
Bank of India provides education loans with zero margin money for loans up to INR 7.5 lakh, meaning students do not need to contribute any personal funds. The bank also offers special benefits to students pursuing professional and technical courses.
Key Features:
- Processing Fee: Nil
- Security: NA
- Co-borrowers: Parents or guardians
- Margin: Nil for loans up to ₹4 lakh
- Concession: Up to 1% discount for female students and those in professional courses
Punjab National Bank Education Loan Interest Rates
Punjab National Bank (PNB)’s PNB Udaan and PNB Pratibha schemes cater to students going abroad and those studying in India’s premier institutions. The bank offers higher loan limits and flexible collateral requirements based on the institute’s category.
Key Features:
- Processing Fee: Up to 1% for overseas studies
- Security: Tangible collateral required for foreign education loans
- Co-borrowers: Parents or guardians
- Concession: 0.50% discount for female applicants & additional concessions for students with disabilities
Axis Bank Education Loan Interest Rates
Axis Bank provides education loans with pre-admission sanction, allowing students to secure a loan before confirming their admission. It also offers special forex services for students studying abroad and loan repayment flexibility.
Key Features:
- Processing Fee: Up to 2%
- Concession: Interest rate benefits for scholarship holders and specific courses
HDFC Bank Education Loan Interest Rates
HDFC Bank is known for its fastest loan disbursal process, ensuring students get funding within days. It also offers tax benefits under Section 80E and allows repayment through a variety of flexible EMI options.
Key Features:
•Loan Amount: Up to Rs. 150 lakh
•Processing Fee: Nil (for Indian education loans), up to 2% for others
•Concession: Rate benefits for meritorious students and specific affiliated institutions
Union Bank of India Education Loan Interest Rates
Union Bank of India provides education loans with interest-free moratorium periods, enabling students to focus on their studies without worrying about repayments. It also extends exclusive benefits to students from weaker economic backgrounds under government subsidy programs.
Key Features:
- Processing Fee: Up to 0.50%
- Concession: Reduced rates for meritorious students and female applicants
Canara Bank Education Loan Interest Rates
Key Features:
- Loan Amount: No Collateral for loan upto Rs 7.50 Lakhs.
- Processing fee: Nil
Indian Overseas Bank Education Loan Interest Rates
Indian Overseas Bank offers some of the best education loan schemes to support students from all backgrounds. With low interest rates and flexible repayment options of up to 15 years, these loans make higher education more accessible.
Key Features:
- Loan Amount: Up to Rs.60 Lakh
- Processing Fee: Nil
- Concession: Interest concession up to 0.50% to 1.50% for educational loans under the Vidya Jyothi and Vidya Suraksha Schemes.
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Education Loan Interest Rates of NBFCs
Your search for an education loan does not end with just banks. There are Non Banking Financial Corporations (NBFCs) that offer hassle free education loans to help the students achieve their educational aspirations.
Here are some of the major NBFCs and their interest rates:
Note: The Information provided is based on data available as of March 2024 from reputable sources such as RBI and official bank websites. Processing fees and concession benefits may vary based on individual applicant profiles and loan terms. It is advisable to directly contact the respective banks for the most up-to-date and personalized details regarding education loan offerings.
An NBFC education loan is a great alternative for students who may not qualify for traditional bank loans. Non-Banking Financial Companies often offer quicker processing, flexible terms, and collateral-free options, especially for international education.
How to Get the Cheapest Education Loan in India?
Education loan interest rates and eligibility conditions can vary widely from bank to bank. However, if you plan smartly, you can easily secure the cheapest education loan for your studies. Here’s how:
1. Explore Multiple Options
Before finalizing any bank or lender, do thorough research. Shortlist a few banks and compare their education loan offers. Talk to their loan officers to understand which one can provide you with the best interest rate and repayment terms.
2. Prioritize for a Secured Loan
If possible, consider taking an education loan against collateral, like property or fixed deposits. Secured loans often come with lower interest rates compared to unsecured ones, making repayment easier on your pocket.
3. Meet All Eligibility Requirements
Carefully check the loan eligibility criteria laid out by the bank. Ensure that you meet all the requirements, such as academic performance, admission to a recognized institution, and necessary documentation. Being fully eligible strengthens your case to negotiate for a better interest rate.
4. Check for Government Schemes and Subsidies
The Government of India and various state governments offer several education loan schemes and subsidies for students. These schemes sometimes cater to specific courses, fields of study, or economically weaker sections. Availing such schemes can help you get loans at subsidized or much lower rates.
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Eligibility Criteria for Education Loans
Eligible Courses
- Full-time Courses: Undergraduate, postgraduate, professional, and technical programs from recognized institutions (India and abroad).
- Part-time Courses: Accepted if offered by reputed institutes.
- Vocational Courses: Skill-based programs are increasingly covered.
Eligible Institutions and Admission Proof
- Recognized Institutions: The course must be from a government-approved or accredited college/university.
- Admission Letter: A confirmed admission letter is mandatory for loan approval.
Other Requirements
- Indian Citizenship: The applicant must be an Indian national.
- Age Limit: Must be 18+ or apply with a co-applicant (like a parent/guardian).
No Collateral Required. Approval Based on Student Potential. Check Your Eligibility
Documents Required for Education Loan
Fueling your academic dreams with an education loan requires navigating some paperwork. But fret not! This section will equip you with the knowledge to conquer this step.
Comprehensive list of documents needed for education loan applications
- Identity & Address Proof: Photocopies of PAN Card, Aadhaar Card, Passport (if applicable), and your residence proof (utility bills, rental agreement).
- Academic Documents: Class 10th and 12th mark sheets, acceptance letter from your chosen institution, and course fee structure.
- Financial Documents: Bank statements for the past 6 months, income tax returns of your guardian/co-applicant (if applicable).
The documents required for education loan usually include academic records, admission proof, identity and address proof, income documents of the co-applicant, and collateral papers if applicable. Having these ready can speed up the loan approval process significantly.
How to Calculate Your EMI for Education Loans?
To calculate your EMI (Equated Monthly Installment) for an education loan in India, use the formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Where
P = Principal Amount
R= Rate of Interest
N= Number of years for repayment (in months)
You can also use the EMI calculator to calculate your EMI details easily.
Example: Mr. X borrowed an education loan of ₹10,00,000 for a tenure of 10 years at an interest rate of 10% per annum. Using the Propelld Education Loan EMI Calculator, the EMI for his loan comes out to be
Your monthly EMI is
₹104640.38
Your Principal Amount is
₹1000000.00
Your total interest is
₹46403.81
Your total amount is
₹1046403.81
For an accurate EMI calculation based on your loan details, visit the Propelld Education Loan EMI Calculator.
Factors to Consider While Taking an Education Loan
There are several factors to consider while taking an education loan:
1. Interest Rates: Compare rates offered by banks and financial institutions.
2. Loan Amount: Determine the total cost of education and the amount needed
3. Repayment Options: Check flexibility in repayment schedules and EMI options.
4. Collateral Requirements: Understand if collateral or a guarantor is needed.
5. Processing Fees: Consider one-time fees for processing the loan application.
6. Moratorium Period: Verify if there's a grace period before repayment begins.
7. Loan Tenure: Choose a tenure that suits your financial situation.
8. Prepayment Charges: Know if there are penalties for early repayment.
9. Credit Score: Ensure your credit score meets the lender's requirements.
10. Loan Disbursement: Confirm how and when funds will be disbursed.
Explore Education loans at zero interest and how they are usually offered under specific government subsidy schemes for eligible students. These schemes aim to ease the financial burden by covering the interest during the study period or offering full interest waivers under certain conditions.
Choosing the right education loan is crucial for achieving your academic goals. At Propelld, we offer tailored education loan solutions with competitive interest rates and flexible repayment plans.
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The following are the primary benefits of Propelld.
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