Education loans for studying abroad: who offers the cheapest interest rates?

When choosing a financial institution for a foreign education loan, students and parents should carefully consider several key factors.

Pursuing higher education abroad can be a dream come true, but the cost of international tuition fees can be daunting with the impact of rupee depreciation against USD. For many students, education loans are a necessary step to fund their studies. If you're set to embark on your international studies in August or September, begin researching banks that offer education loans with competitive interest rates to fund your education abroad.

Many banks offer specialised education loan programmes for students pursuing international studies. These loans typically cover a range of expenses, including tuition fees, living costs, and other miscellaneous expenditures, such as laptops, books, travel tickets, and more.

When choosing a financial institution for a foreign education loan, students and parents should carefully consider several key factors. These include the interest rate offered, processing time, loan tenure, repayment terms, and moratorium period. The moratorium period is particularly important as it typically covers the duration of the course, besides an additional period of six months to one year.

Data from Bankbazaar.com reveals that for an education loan of Rs 50 lakh for a tenure of seven years, the top 10 banks by assets are offering interest rates ranging between 8.60 percent and 13.70 percent (data as on March 11, 2025, from the bank websites).

Indian Bank

Starting at 8.60 percent, education loan interest rate offered by this lender is the lowest amongst all banks. Equated monthly installment (EMI) on a Rs 50-lakh loan with a seven-year tenure will work out to Rs 79,434.

ICICI Bank and Union Bank of India

These two banks levy interest rates starting from 9.25 percent. The EMI on a Rs 50-lakh loan with a seven-year tenure works out to Rs 81,081.

Also read | How to get the best education loan? Here’s a primer

Bank of Baroda

BOB charges interest, starting at 9.45 percent on education loans. The EMI on a loan of Rs 50 lakh with a seven-year tenure will amount to Rs 81,592.

Punjab National Bank charges interest starting at 10 percent on education loans. The EMI on a loan of Rs 50 lakh with a seven-year tenure will be Rs 83,006.

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State Bank of India

SBI charges interest, starting at 10.15 percent on education loans. The EMI on a loan of Rs 50 lakh with a seven-year tenure will amount to Rs 83,394.

Canara Bank

Canara Bank charges interest starting at 10.25 percent. The EMI on an education loan of Rs 50 lakh with a seven-year tenure will be Rs 83,653.

Also read | How to plan financially for your child’s foreign education

Indian Overseas Bank

Indian Overseas Bank charges interest starting at 11 percent. The EMI on a loan of Rs 50 lakh with a seven-year tenure will be Rs 85,612.

Bank of India

Bank of India charges interest starting at 11.60 percent on education loans. The EMI on a loan of Rs 50 lakh with a seven-year tenure will be Rs 87,198.

Axis Bank

Axis Bank charges interest starting at 13.70 percent on education loans. The EMI on a loan of Rs 50 lakh with a seven-year tenure will be Rs 92,873.