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Education Loan Interest Rates in India 2017 - 2018

Last Updated 28th Jul 2017

Education Loan for Courses in India, US, France and Australia

  • Anyone in the country who wants to get higher education in India and abroad can apply for Education Loan
  • Repayment of the Education Loan starts after the completion of the course for a tenure of 5 to 7 years
  • Minimum amount to get Educational Loan should be Rs. 50,000. No guarantor or collateral is required for loans below Rs. 4 lakh
  • Some banks offer discounts or lower interest rates for female students on Education Loan
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Education Loan Interest Rates comparison, Jul 2017, Best rates

Bank Education Loan Interest Rates in India Education Loan Interest Rates in Abroad
Avanse DHFL (3/5.0) 1 Users 11.50% - 11.50% 11.50% - 11.50% Explore Apply Now
Axis Bank 15.00% - 17.50% 15.00% - 17.50% Explore Apply Now
Bank of Baroda 10.35% - 11.40% 11.40% - 12.15% Explore Apply Now
Bank of India 10.25% - 11.00% 11.70% - 13.20% Explore Apply Now
Bank of Maharashtra 10.45% - 10.95% 10.45% - 10.95% Explore Apply Now
Canara Bank 10.65% - 11.35% 10.65% - 11.35% Explore Apply Now
Catholic Syrian Bank 14.50% - 15.00% 14.50% - 15.00% Explore Apply Now
Central Bank of India 10.00% - 10.50% 10.00% - 10.50% Explore Apply Now
City Union Bank 14.50% - 15.50% 14.00% - 15.50% Explore Apply Now
Corporation Bank 10.75% - 11.10% 10.75% - 11.10% Explore Apply Now
Dena Bank 10.10% - 10.10% 10.10% - 10.10% Explore Apply Now
Federal Bank 10.65% - 14.00% 10.65% - 14.00% Explore Apply Now
IDBI Bank 9.70% - 10.70% 9.70% - 10.70% Explore Apply Now
Indian Bank 12.25% - 12.25% 12.25% - 12.25% Explore Apply Now
Indian Overseas Bank 10.65% - 11.65% 10.65% - 11.65% Explore Apply Now
Karnataka Bank 11.10% - 13.95% 11.10% - 13.95% Explore Apply Now
Karur Vysya Bank 12.25% - 13.00% 12.25% - 13.00% Explore Apply Now
OBC 11.15% - 11.40% 11.15% - 11.40% Explore Apply Now
PNB 10.50% - 12.50% 10.50% - 12.50% Explore Apply Now
SBI 9.35% - 10.75% 9.50% - 10.75% Explore Apply Now
Tamilnad Mercantile Bank 13.30% - 13.80% 13.30% - 13.80% Explore Apply Now
UCO Bank 10.60% - 11.00% 10.60% - 11.00% Explore Apply Now
Union Bank of India 10.15% - 10.65% 10.15% - 10.65% Explore Apply Now
United Bank of India 10.95% - 11.00% 12.00% - 12.00% Explore Apply Now

Student Loan Interest Rates – Eligibility, FAQ's

Determinants of Eligibility for Education Loans

Age of the Applicant
  • Upto 35 years for non-employed personnels
  • Upto 45 years in case of working employees/ executives
Who is eligible
  • An Indian National having secured admission to professional/technical courses in recognized institutions
  • Students seeking admission for higher studies
  • Permanent employees who are employed for not less than three years with any organisation and who intend to acquire higher professional qualifications and have secured admissions in a reputed institute
Maximum Loan Amount
  • Typically upto Rs. 10 lakh for studies in India; with minimum margin money (own contribution by student/ family) of 5% of total cost
  • Typically upto Rs. 20 lakh for studies abroad, some banks offer upto Rs. 30 lakhs with minimum margin money (own contribution by student/ family) of 15% of total cost
  • Upto Rs. 30 lakh for studies at IIT's, IIM's and ISB's with minimum margin money (own contribution by student/ family) of 5% of total cost
Which Cost Heads/ Expenses are Funded by Bank
  • Admission fees including Monthly Fees and Examination Fees
  • Books, Stationery and Equipments
  • Airfare for joining the course abroad
  • Boarding & lodging expenses of authorized hostel or boarding house
  • Expenses required to complete the courses like those on study tours, project work and thesis etc.
Co-borrower/ Guarantor/ Security
  • Loans upto Rs 4 lakh: Parents or guardian or husband/in-laws in case of married woman required need to be co-borrower
  • Loans above Rs 4 lakh and upto Rs 7.5 lakh: Parents or guardian or husband/in-laws in case of married woman need to be co-borrower and a third party guarantee needed as collateral
  • Above Rs 7.5 lakh: Parents or guardian or husband/in-laws in case of married woman need to be co-borrower and tangible security equivalent to 100-133% of loan amount as collateral
Repayment Frequency
  • Quarterly or monthly rests
  • Repayment typically starts 1 year after completing the course or six months after getting a job, whichever is earlier
Repayment Period
  • Varies from bank to bank - can range from 7 to 15 years
  • There is no prepayment penalty or charge on early prepayment or foreclosure
Key Appraisal Criteria
  • Good academic record with atleast 50% marks in the qualifying examinations
  • Admission letter from bonafide educational institution
  • Passport/visa/i-20 form for studies abroad
  • Net-worth and credit history (CIBIL) of the guarantors

Tax benefit on Educational Loan

  • Interest paid on education loan can be claimed as deduction from income of borrower (student) as per Section 80E of the Income Tax Act, 1961
  • Rebate can be claimed without any upper ceiling or cap
  • Rebate is available for full time courses, part time courses and vocational courses pursued in India and abroad
  • Rebate can be claimed within eight (8) years post moratorium period subject to actual payment of interest
  • Rebate is available for interest paid on loans for education of self, spouse, children or for the student of whom he/she is the legal guardian
  • No rebate is available for principal repayment

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Education Loan News - Jul 2017
  • 2017-04-18 : SBI to offer skill loans up to Rs. 1.5 lakh
    SBI will offer skill loans for professionals of up to Rs. 1.5 lakh with an effective interest rate of 9.5 per cent, based on its MCLR or marginal cost of funds-based lending rate of 8 per cent. SBI’s skill loans scheme will enable professionals to get their certification from reputed institutions. The scheme will cover various training institutions besides National Skill Development Corporation and State Skill Corporation.
  • 2017-04-15 : SBI offers 100% financing on Education loans Up To Rs. 30 Lakh
    India largest lender SBI, which recently adopted a new brand identity after merger with its five associate banks and Bharatiya Mahila bank, said that they are offering 100 per cent financing on its education loans with a repayment period of up to 15 years. Under SBI loan offering, Indian students can apply for term loans up to Rs. 30 lakh for pursuing higher education in selected 120 premier institutions in the country including IIMs and IITs.
  • 2016-10-03 : Bihar CM Nitish Kumar launches Student Credit card
    Nitish kumar launches a student credit card scheme for the students who have passed senior secondary education and wish to persue higher studies. This will be treated as Education Loan. The withdrawing limit will be upto 4 lakhs where interest rate will be born by the Bihar government.
  • 2016-09-14 : Cabinet clears student credit card scheme
    The state cabinet gave its nod to Student Credit Card Scheme. Under this scheme, the 12th passout students can take education loans of up to Rs 4 lakh for pursuing higher education. The government will act as guarantor and provide support to the students to get loan from banks. The students who take admission to any recognised institution will be eligible for loan, irrespective of their financial background. The Bihar government will sign a memorandum of understanding this month with the banks and the interest rate will be kept at 2 per cent above the benchmark rate.
  • 2016-08-14 : SBI raises education loan cap five-fold to Rs 1.5 crore
    State Bank of India has increased its limit for overseas education loans to Rs. 1.5 crore from Rs. 30 lakh currently. SBI is also increasing loan amount of government guarantee loan to Rs. 7.5 lakh from Rs. 4 lakh. SBI is an improving demand for education loans since it combined with the government Vidya Lakshmi portal, and 10 percent of its education loan applications are already through the portal. The current education loan book of SBI stands at Rs. 15,000 crore and it is expecting a growth of 15 per cent and 20 per cent in number of loans disbursements respectively
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