While banks are taking additional precautions and evaluating more parameters before sanctioning higher education loans this academic year, loans have also turned cheaper. The top ten cheapest loans carry interest rates of 6.75-7.15 percent, as per data from Bankbazaar.com
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State-owned banking major Bank of Baroda charges an interest rate of 6.75 percent for a Rs 20-lakh education loan with a tenure of seven years. The equated monthly installment works out to Rs 29,942.
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Next on the list of lenders offering lowest interest rate on education loans is, expectedly, another public sector giant. Union Bank’s interest rates start at 6.8 percent, with the EMI amounting to Rs 29,990.
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At 6.85 percent, education loans from the country’s largest bank are a tad more expensive than those of BoB and Union Bank. Bank of India and Central Bank of India, too, offer the same interest rate. Your EMI in this case will be Rs 30,039.
The entire top ten list of education loan financiers offering the cheapest loans is made up of government-owned banks. Punjab National Bank, Canara Bank and IDBI Bank offer interest rates of 6.9 percent for Rs 20-lakh education loan with a seven-year repayment term.
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Bank of Maharashtra’s education loan interest rates start at 7.05 percent, with the EMI amounting to Rs 30,234.
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State-owned Indian Bank offers an interest rate of 7.15 percent on a Rs 20-lakh student loan with tenure of seven years
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About the data: Interest rates on education loans for all listed (BSE) public and private banks have been considered for data compilation; Banks for which data is not available on their websites have not been considered. Data collected from respective banks' website as on September 9, 2020. Banks are listed in ascending order on the basis of interest rate i.e. bank offering the lowest interest rate on education loan (loan amount of up to Rs 20 lakh) is placed at top and highest at the bottom. Lowest rates offered by the banks on loan up to Rs 20 lakh has been considered in the table. EMI is calculated on the basis of Interest rate mentioned in the table for Rs 20-lakh loan with tenure of seven years (processing and other charges assumed to be zero for EMI calculation).
