Find out about the most recent interest rates for student loans from the largest banks in India so you can compare rates and select the one that best suits your requirements. A lot of factors affect the interest rate on these loans. Learn what they are and how to calculate your student loan EMI for better money management.
Find out everything you need to know about the eligibility criteria and papers you will need to submit your application so it has a better chance of being approved.
Compare Education Loan Interest Rates 2024
| Banks | Interest Rates | Processing Fees |
| Punjab National Bank | 8.15% p.a. onwards | Minimum 1% of loan amount |
| Canara Bank | Up to 10.40% p.a. | Nil |
| State Bank of India | Up to 10.65% p.a. | Up to Rs.10,000 |
| Bank of Baroda | 7.95% p.a. onwards | 1% of loan amount |
| IDBI Bank | Up to 10.00% p.a. onwards | Contact the bank |
| Bank of India | 9.40% p.a. to 10.20% p.a. | Study in India: NilStudy in abroad: Rs.5,000 |
| Tamilnad Mercantile Bank | 10.75% p.a. onwards | 1% of the loan amount |
| HDFC | 9.55% to 13.25% p.a. | Up to 1% of loan amount |
| UCO Bank | Up to 10.55% p.a. | Nil |
| Karnataka Bank | 12.50% p.a. onwards | Contact the bank |
| Federal Bank | 11.45% p.a. onwards | Contact the bank |
| Karur Vysya Bank | 11.50% p.a. to 12.50% p.a. | Nil |
| Axis Bank | 13.70% p.a. to 15.20% p.a. | Rs.15,000 + GST |
| Kotak Mahindra Bank | Up to 16% p.a. | Nil |
* Most of the bank. Offers zero processing Fee for courses in India. Please contact the bank for details.
Types of Interest Rates in Education Loan
The bank determines the sort of interest rate for student loans. Some banks provide loans with set interest rates for the duration of repayment. Others have interest rates that are linked to the Lending Rate based on the one-year Marginal Cost of funds based Lending Rate (MCLR). The interest rate of the student loan may change if this were reset at regular intervals.
Factors that Determine Education Loan EMI
There are many factors that determine how much your Equated Monthly Instalment (EMI) will be on your education loan. These factors would be:
- Interest rate on the loan
- Loan amount
- Repayment tenure
How to Calculate Your EMI on Education Loans
The formula that is used to calculate your education loan Equated Monthly Installment (EMI) would be:
EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]
P = Principal amount
R = Rate of Interest
N = Number of years for repayment (this is calculated in months)
For a thorough amortisation chart of your EMI, you can also utilise an online EMI calculator . For this, you might make use of a free online education EMI calculator. All you have to do is fill out the appropriate fields with the required loan amount, the current interest rate, and the repayment period of your choice. You can either type the numbers into the fields or adjust the numbers using the slider (depending on the calculator). The amortisation table and information about your total principal and interest due will be detailed right away once you have entered the correct information.
Factors to Consider When Taking an Education Loan
There are many factors to look out for when choosing an education loan. These would be:
- Eligibility criteria
- Courses for which the loan is applicable
- Collateral required, if any
- Guarantor required
- Margin amount
- Interest rate
- Loan amount
- Repayment tenure
Eligibility Criteria
The eligibility criteria may differ from one lender to the other, but these are the common criteria that you have to meet to be approved for an education loan:
- Indian national
- Age: Up to 35 years for non-employed individuals and up to 45 years for employed individuals
- Proof of admission into the educational institution
- Valid educational certificates showing a good academic record (of more than 50% marks)
- Guarantor’s income proof or credit history
- Passport/i20 form/visa in case of studies abroad
Documents Required
These are some of the documents required to complete your loan application:
- Fully filled in application form with passport-size photographs affixed as required
- Admission letter on letterhead of the educational institute
- Academic certificates of the applicant
- Marksheets of entrance examination, if any
- Scholarship document, if any
- Declaration that no loan has been availed from another lender
- Proof of identity such as Aadhaar card/passport/driving license/Permanent Account Number (PAN) card, etc.
- Proof of address or residence such as utility bills/ration card/Aadhaar card/passport, etc.
- Proof of age such as birth certificate or 10th standard certificate
FAQs
- For what kind of courses can I avail an education loan?You can avail an education loan for recognized vocational courses, diploma, undergraduate, postgraduate, doctorate, and professional courses.
- Are there any tax benefits that can be availed on an education loan?Yes, you can avail tax benefits on the interest payments of your education loan. This will come under Section 80C and 80E of the Income Tax Act, 1961.
- When do I start repaying my loan?This will depend on the lender, but for most lenders, the repayment tenure will start either at the end of your course or a few months after you get a job. This is a moratorium period after your course ends.
- Is any collateral required?Usually, collateral is only required for education loans above a specific amount, which can vary from bank to bank.
- Can I add a co-applicant to my loan?For many banks, a co-applicant is mandatory for an educational loan. This can be a parent, guardian, spouse, or a parent-in-law.