Synopsis: Education loan interest rates in India currently range between 6.85% and 10% per annum, depending on the bank, course, and borrower profile. Public sector banks provide students who study at approved educational institutions with their most affordable loan rates.
In India, the expenses of higher education have increased substantially since students began pursuing their studies there and in other countries. For many students, an education loan is not just an option but a necessity to achieve their academic and career goals. The total cost of education becomes more affordable through student loans, but their interest rates determine the actual expenses that students will have to pay throughout their educational journey. Even a small difference of 0.5%–1% in interest rates can translate into savings or extra costs of several lakhs over the repayment period.
Top 5 Banks with Lowest Education Loan Interest Rates
Bank of Baroda
- Interest Rate: Starting from 6.85% p.a.
- Loan Amount: Need-based financing (limits depend on scheme and eligibility)
- Tenure: Up to 10–15 years
- Processing Fee: No processing charges (scheme-based)
- Key Schemes:
- Baroda Vidya (for school & higher education in India) & Baroda Scholar (for studies abroad)
- Key Benefits:
- No processing charges, no documentation charges, no margin
- Collateral-free loan up to ₹40 lakh for premier institutes
- Covers expenses like books, laptops, and fees
Bank of Maharashtra
- Interest Rate: 6.85% p.a. onwards
- Loan Amount: Up to ₹10 lakh (India) and ₹20 lakh (abroad)
- Tenure: Up to 15 years (excluding moratorium)
- Processing Fee:
- Nil for Mahabank Scholar Loans
- 0.50% (refundable) for abroad loans
- Key Benefits:
- No margin / up to 100% financing (premier institutions)
- No collateral (within limits for premier institutes)
- Interest concession for girl students
- Key Schemes:
- Model Education Loan Scheme, Maha Bank Skill Loan Scheme, PM Vidya Laxmi Education Loan Scheme
State Bank of India
- Interest Rate: 6.90% p.a. onwards (scheme-based, floating)
- Loan Amount: Up to ₹3 crore
- Tenure: Up to 15 years after course period + repayment holiday
- Processing Fee:
- Loans up to ₹20 lakh: Nil
- Loans above ₹20 lakh: ₹10,000 + taxes
- Key Benefits:
- Collateral-free loans up to ₹7.5 lakh (only parent/guardian as co-borrower)
- 100% financing for select premier institutes under Scholar Loan
- Wide network with quick sanction across branches
- 0.50% concession for girl students
- Key Schemes:
- SBI Student Loan Scheme, SBI Scholar Loan Scheme (for premier institutes), SBI Global Ed-Vantage Scheme (for abroad studies), SBI Skill Loan Scheme
Bank of India
- Interest Rate: 1 Year RBLR + 1.70% (up to ₹7.5 lakh) / 1 Year RBLR + 2.50% (above ₹7.5 lakh)
- Loan Amount: Need-based finance (depends on course and eligibility)
- Tenure: Up to 15 years (moratorium + repayment period)
- Processing Fee: Nil (as per scheme norms)
- Key Benefits:
- No processing charges
- No margin up to ₹4 lakh
- Collateral-free up to ₹4 lakh
- CGFSEL coverage for eligible loans
- Covers tuition, hostel, books, laptop, equipment
- Key Schemes:
- Star Education Loan Scheme (India), Star Education Loan Scheme (Abroad), Star Progressive Education Loan
Punjab National Bank
- Interest Rate: 4.00%–10.10% p.a. (scheme-based, floating)
- Loan Amount: Need-based finance (as per course/institute eligibility)
- Tenure: Up to 15 years (including moratorium)
- Processing Fee: As per scheme (varies)
- Key Benefits:
- Government subsidy schemes available (eligible cases)
- Collateral-free loans up to eligible limits
- CGFSEL support (where applicable)
- Covers full academic expenses (fees, hostel, books, travel)
- Key Schemes:
- PNB Pratibha (premier institutes), PNB Udaan (abroad studies), PNB Saraswati (domestic studies), PNB Kaushal (skill courses)
Also read: Over 8% Interest on RBI Floating Rate Savings Bonds – Should You Choose Them Over FDs?
Comparison Table
| Bank | Interest Rate | Loan Amount | Tenure | Processing Fee |
| Bank of Baroda | 6.85% onwards (scheme-based) | Need-based | 10–15 years | Nil (select schemes) |
| Bank of Maharashtra | 6.85% onwards (scheme-based) | ₹10L (India) / ₹20L (abroad) | Up to 15 years | Nil / 0.50% |
| SBI | 6.90% onwards (floating) | Up to ₹3 crore | Up to 15 years | Nil up to ₹20L |
| Bank of India | RBLR + spread (floating) | Need-based | Up to 15 years | Nil |
| PNB | 4% – 10.10% (scheme-based) | Need-based | Up to 15 years | Scheme-based |
Conclusion
The education loan system in India operates through multiple schemes that provide loans with interest rates that depend on the specific bank and academic program and borrower qualifications. Public sector banks like SBI, Bank of Baroda, Bank of Maharashtra, Bank of India, and PNB offer flexible education loan options for studies both in India and abroad. Students should compare not just interest rates, but also repayment terms, processing fees, and collateral requirements before making a decision.
Written By Ameet S
