Like any other loan, the central significance of any education loan is its interest rate. Since the Reserve Bank of India describes education loans as a priority product, all banks offer education loans. Let’s see what interest rates major banks are charging on these loans.
The point to note is that education loans can be both secured and unsecured. Secured loans need some assets to be pledged by the borrower, while unsecured loans do not have such needs. Some banks offer unsecured education loans up to an extent. As a rule unsecured loans bear a higher interest rate than a secured loan, provided all conditions of both are the same.
SBI education loan
Under the head Student Loan Scheme, SBI charges 11.15%, It offers a 50 basis point concession for girl students. Under SBI Scholar Loan Scheme, SBI offers a rate of 8.05% to 9.65% on education loans for IITs and other institutes. For SBI Global Ed-vantage Loan (for courses abroad), the bank charges 11.15% with 50 basis point reduction for girl students. The loan for institutes abroad varies between Rs 10 lakh and Rs 1.5 crore.
HDFC Bank education loan
The interest rate on education loans from India’s largest private lender HDFC Bank starts from 9.5% per annum. Processing charges are added to any loan more than Rs 7.5 lakh and amounts to 1% of the loan amount. Legal/incidental charges are realised from the borrower on actuals apart from any statutory charges that might be applicable. Between April and June 2024, the bank offered a mean IRR of 10.78% on these loans to customers.
ICICI Bank education loan
The maximum amount ICICI Bank offers for courses inside India is Rs 1 crore. The amount goes up to Rs 3 crore for study in institutes abroad. The rate of interest ranges from 9.5% per annum to 11.31% per annum. ICICI Bank offers education loans without collaterals for admission to premier institutes.
Section 80E of the Income Tax Act, 1961 allows income tax deductions on the interest paid on education loan. The benefit is available for a maximum period of 8 years or till the interest is repaid, whichever is earlier. Tax benefits are available under the old tax regime.
An education loan is an extremely helpful tool to help a student realise his/her dreams. It also offers income tax benefits. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
