Education loan is a type of loan that helps students pursue higher education in India or abroad. Education loan can cover the tuition fees, hostel charges, books, equipment, travel expenses, and other related costs of education.
Education loan can be a useful option for students who want to fulfill their academic dreams without any financial constraints. However, choosing the best bank who provide lowest interest rate on education loan can be a challenging task, as there are many factors to consider.
One of the most important factors is the interest rate, which determines how much you have to pay back to the bank over the loan tenure. A lower interest rate can save you a lot of money in the long run. Therefore, it is advisable to compare the interest rates offered by different banks before making a decision.
In this blog article, we will help you find out which bank has the lowest interest rate on education loan, based on the web search results.
We will also provide you with some information about the loan amount, loan tenure, processing fee, and other features of each bank for education loan. We hope this blog post helps you find the best bank for education loan that suits your needs and preferences.
Which Bank has the Lowest Interest Rate on Education Loan?
According to the web search results, the bank that has the lowest interest rate on education loan is Bank of India. Bank of India offers the Star Vidya Loan scheme, which has the lowest interest rate, starting from 8.25%.
This scheme is available for students who want to pursue graduate, postgraduate, or professional courses in India or abroad. The maximum loan amount for studying in India is Rs. 20 lakhs, and for studying abroad is Rs. 1crore. Get 10,000 instant loan for students.
The loan tenure is up to 15 years, and there is no processing fee for studying in India. However, for studying abroad, the bank charges Rs. 5,000 as processing fee. The bank also provides a moratorium period of up to one year after the completion of the course or six months after getting a job, whichever is earlier.
The bank also offers a 0.50% concession in interest rate for girl students and a 1% concession for students who secure admission in premier institutions.
Which are the Other Banks that Offer Low Interest Rates on Education Loan?
Apart from Bank of India, there are other banks that offer lowest interest rate on education loan. Here is a list of the top 10 banks that offer low interest rates on education loan.
| Bank Name | Interest Rate | Loan Amount | Loan Tenure | Processing Fee |
| SBI | 10.47% | Up to Rs. 20 lakhs for India, up to Rs. 1.5 crores for abroad | Up to 15 years | NIL |
| HDFC Bank | 9.55% to 13.25% | Up to Rs. 50 lakhs for India, up to 100% of cost for abroad | Up to 15 years | 1% of loan amount |
| ICICI Bank | 9.75% to 13.25% | Up to Rs. 50 lakhs for India, up to 100% of cost for abroad | Up to 15 years | 0.5% to 1% of loan amount |
| Axis Bank | 13.70% to 15.20% | Up to Rs. 75 lakhs for India, up to Rs. 1.5 crores for abroad | Up to 15 years | NIL |
| Bank of Baroda | 8.25% to 10.25% | Up to Rs. 80 lakhs for India, up to Rs. 1.5 crores for abroad | Up to 15 years | NIL |
| Punjab National Bank | 8.30% to 10.30% | Up to Rs. 40 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | NIL |
| Canara Bank | 8.50% to 10.50% | Up to Rs. 40 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | NIL |
| IDBI Bank | 8.75% to 10.75% | Up to Rs. 30 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | NIL |
| TATA Capital | 10.5% to 12.5% | Up to Rs. 30 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | 0.5% to 2% of loan amount |
| Kotak Mahindra Bank | 11.5% to 13.5% (floating) | Up to Rs. 20 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | 1% of loan amount |
| Avanse | 10.99% to 16.99% (floating) | Up to 100% of cost for India and abroad | Up to 15 years | 1% to 2% of loan amount |
| South Indian Bank | 9.75% to 11.75% (floating) | Up to Rs. 25 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | 0.5% of loan amount |
| Union Bank of India | 8.25% to 10.25% (floating) | Up to Rs. 20 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | NIL |
| Bank of India | 8.25% to 10.25% (floating) | Up to Rs. 20 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | NIL |
| Indian Bank | 8.50% to 10.50% (floating) | Up to Rs. 20 lakhs for India, up to Rs. 1 crore for abroad | Up to 15 years | NIL |
How To Choose Best lowest Interest rate on Education Loan
- Compare interest rates and choose a competitive one. Lower rate can save money. From 8.25% to 15.20% .
- Assess loan amount and choose suitable one. Higher amount can cover more expenses. Up to 100% of cost .
- Consider loan tenure and choose one that matches capabilities. Longer tenure can reduce EMI. Up to 15 years .
- Check processing fee and choose lower or waived one. Fee can increase loan cost. From NIL to 2% of loan amount .
- Inquire about moratorium period and choose longer one. Period can defer repayment start. Up to one year or six months after job .
- Research about eligible courses and institutions and choose recognized ones. Eligibility can affect loan approval. Graduate, postgraduate, professional, diploma, certificate courses .
- Understand collateral and co-signer requirements and choose feasible ones. Requirements can affect loan security. Property, deposits, securities, parents, guardians .
- Look for interest rate concessions and choose applicable ones. Concessions can reduce interest burden. For girl students, premier institutions.
Conclusion
Education loan is a convenient and flexible option to finance your higher education in India or abroad. However, choosing the best bank for an education loan can be a daunting task, as there are many factors to consider.
One of the most important factors is the interest rate, which determines how much you have to pay back to the bank over the loan tenure. A lower interest rate can save you a lot of money in the long run. Therefore, it is advisable to compare the interest rates offered by different banks before making a decision. Read Article: Paytm Business loan upto 10 lakhs.
FAQs – lowest Interest rate on education loan
Q.1 Which bank has lowest interest rate on education loan?
The bank that has the lowest interest rate on education loan is Bank of India. Bank of India offers the Star Vidya Loan scheme, which has the lowest interest rate, starting from 8.25%1. This scheme is available for students who want to pursue graduate, postgraduate or professional courses in India or abroad.
Q.2 Can you get an education loan with 0% interest from a bank?
No, it is not possible to get an education loan with 0% interest from a bank. However you can apply for various scholarships or check for government subsidies to get an interest-free education loan.
Q.3 How to avoid interest on education loan?
You can’t avoid interest rate but you can reduce it. Choose a budget-friendly repayment plan, opt for a shorter loan tenure to save on interest, set up automatic payments to avoid late fees, pay off interest during moratorium, and make extra payments when possible to reduce the principal amount.
Q.4 Can I repay education loan early?
Yes, you can repay education loan early if you can. In banking term, it is called Pre-payment of a loan which means clearing the loan before the stipulated period of time. Repaying education loan early can help you save on the interest amount and improve your credit score.