Public sector major Union Bank of India offers the lowest interest rate in the education loan space currently, starting at 6.8 per cent for a Rs 20-lakh loan with a tenure of seven years.
Nine other banks on the list of lenders that offer the cheapest interest rates on education loans also happen to be public sector banks, as per data from loan aggregator firm Bankbazaar.
Public sector banks offer the best rates
Central Bank of India, Bank of India and Bank of Baroda charge a mere five basis points more than what Union Bank does – their student loans start at 6.85 percent.
The trio is closely followed by the country’s largest bank State Bank of India (SBI) and Punjab National Bank (PNB), which charge 6.9 percent for Rs 20-lakh education loans with seven-year tenures.
Even the most expensive loan offer on the top ten cheapest education loans list – from Indian Overseas Bank (IOB) – comes at an interest rate of 7.25 percent, which is far lower than HDFC Bank’s 9.55 percent.
Tax benefits under section 80E are available for those repaying education loans. Deductions are available for a period of eight years or till the interest is fully repaid, whichever is earlier.