Higher education abroad is costly and education loans offer a lifeline to most students. If you're planning to study abroad starting September or February next, it's time to check interest rates being offered by banks on education loans.
Many banks offer specialised education loans for studying abroad, covering a range of expenses including tuition fees, living costs, laptops, books, travel and other essentials. When choosing an education loan, students and parents should weigh factors such as interest rate, processing time, loan tenure, repayment terms and moratorium period, which usually covers the course duration plus an another six-12 months.
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Data from Bankbazaar.com reveals that for a Rs 50 lakh, 15-year education loan, banks are offering interest rates ranging between 8.25 and 10.93 percent (as on July 25).
At Union Bank of India, the interest rate on education loan starts at 8.25 percent. The rate is the lowest of all. The equated monthly instalment (EMI) on a Rs 50 lakh loan for 15 years will work out to Rs 48,507.
Punjab National Bank charges 8.35 percent interest. The EMI for a Rs 50 lakh, 15-year loan will be Rs 48,798.
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State Bank of India's interest rates start at 8.65 percent and the EMI on a Rs 50 lakh, 15-year loan would amount to Rs 49,678.
Bank of Baroda's rates start at 8.7 percent. Its EMI on a loan of Rs 50 lakh with a tenure of 15 years work to around Rs 49,825.
At ICICI Bank, an education loan interest rate starts at 9.25 percent. The EMI for a Rs 50 lakh, 15-year loan will be Rs 51,460.
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Canara Bank charges interest starting at 9.5 percent and the EMI on an education loan of Rs 50 lakh for 15 years works out to Rs 52,211.
Central Bank of India’s interest rates start from 10.05 percent. The EMI on Rs 50 lakh, 15-year loan will be Rs 53,883.
Axis Bank's rates start at 10.93 percent. The EMI on a Rs 50 lakh, 15-year loan works out to Rs 56,610.
| Banks Offering Foreign Education Loan |
| Banks | Lowest Rate | EMI (Rs 50 lakh for 15 years) |
| Union Bank of India | 8.25% | Rs 48,507 |
| Punjab National Bank | 8.35% | Rs 48,798 |
| State Bank of India | 8.65% | Rs 49,678 |
| Bank of Baroda | 8.70% | Rs 49,825 |
| ICICI Bank | 9.25% | Rs 51,460 |
| Canara Bank | 9.50% | Rs 52,211 |
| Central Bank of India | 10.05% | Rs 53,883 |
| Axis Bank | 10.93% | Rs 56,610 |
| Compiled from BankBazaar.com |
| Note: Interest rates as of 25th July. |
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