Want education loan for your higher studies? Well, you might be wondering about the education loan interest rates of different banks of India. Quality education is very important for a person’s complete and successful life. For some people, it may be a graduation from a top institute. At a time when the cost of studies is constantly increasing, the cost of studying in the top institutes of the country and abroad is quite high. Education loan means that finance can be arranged for the expenses incurred after secondary classes or for pursuing higher education. Education loans can be taken either from the government or from the private sector lending source.
According to a study, the cost of studying is increasing at the rate of 15 percent annually. At this time, if the cost of studies is Rs.2.5 lakh, then after 15 years, it will cost 20 lakh rupees to do MBA. If a parent invests Rs.2000 every month for 15 years from now and assuming an average return of 12 per cent, then he will be able to add only Rs.9.5 lakh. Find out the procedure of education loan in India.
Education loan interest rates of major banks
|Bank name||Interest Rates||Processing Fees|
|State Bank of India||7.95 to 10.05% per annum||Up to Rs.10,000|
|Punjab National Bank||7.30% to 9.80% per annum||1% of loan amount|
|Bank of Baroda||8.00% to 10.25% per annum||1% of loan amount|
|Bank of India||8.95% to 9.75% per annum||Up to Rs.5,000|
|HDFC||9.55% to 13.25% per annum||Up to 1% of loan amount|
|UCO Bank||9.95% to 10.35% per annum||Nil|
|ICICI Bank||11.25% to 14.60% per annum||RAAC pricing + GST|
|Axis Bank||13.70% to 15.20% per annum||Rs.15,000 + GST|
|Kotak Mahindra Bank||Up to 16% per annum||Nil|
|IDBI Bank||8.25% to 10.25% per annum||Please Contact the Bank|
Note: Kindly contact the above banks to confirm the interest rates as they may vary.
How is the EMI of an education loan decided?
Equated Monthly Installations (EMIs) are the means of repaying the loan and they gradually repay the loan’s principal amount and interest of the loan on a monthly basis until the loan is fully repaid. In every EMI, the principal loan is the component of the amount and interest that is to be repaid. No decision to take a loan can be decided without considering the total loan tenure and its EMI.
As far as education loan is concerned, its limit can vary depending on different banks. Education loan repayment usually starts when the student’s course is completed. Every bank has different standards for this period, on the basis of which they decide how much time is given to the student to repay the loan.
What are the benefits of education loan?
- Through this, you can bear the expenses of tuition fees, hostel fees and books, etc.
- Banks usually fund up to 90% of the expenditure on education.
- You get the benefit of income tax deduction on its interest.
- Repayment has to be done only after the completion of the course.
- Through the education loan, the student gets the facility that after the completion of the course, he can decide well which option he has to take, through which he can also repay the loan and also run the expenses.
- The credit score is good on timely repayment of the loan, which makes it easier to take a loan in the future.
What does an education loan cover?
In this, the basic fees of the course and other expenses of the college (stay, exam and others) are covered.
Who can apply for a loan?
A student studying is a main borrower. His parents, or siblings, may be borrowers.
Who can get a loan?
Students going abroad for studies or higher education in India can take a loan. For both places, the loan amount may be different for studies and it also depends on the bank.
What types of courses come under loan?
Full time, part time or vocational courses can be done by taking loans. Apart from this, loans can be taken for studies of graduation or post graduation in Engineering, Management, Medical, Hotel Management and Architecture etc.
Repayment of Education Loan
The student pays the loan. Usually, repayment starts six months after the end of the course, sometimes banks give six months of deferment. This delay can also be six months after getting the job or one year after the completion of the course.
This loan has to be repaid in five to seven years, many times banks can extend it further. The interest on the loan is normal during the duration of the course and this interest has to be paid in the form of EMI, so that the student is not burdened much after the completion of the course.