Noida June 27, 2024: Education loans are financial aids provided to students to help cover the cost of their education. These loans can be taken from banks or Non-Banking Financial Companies (NBFCs) and come with competitive interest rates.
Top Education Loan Interest Rates 2024
| Bank Name | Interest Rate (% p.a.)* |
|---|---|
| Bank of Baroda | 9.15% onwards |
| Punjab National Bank | 9.25% onwards |
| Canara Bank | 9.25% onwards |
| Union Bank of India | 11.30% onwards |
| State Bank of India | 8.55% onwards |
| Central Bank of India | 8.55% onwards |
| IDBI Bank | 9.01% onwards |
| Indian Overseas Bank | 11.05% onwards |
| HDFC Bank | Preferential rates per college |
| Axis Bank | 13.70% onwards |
| Federal Bank | 12.55% onwards |
| ICICI Bank | 9.95% onwards |
| Kotak Mahindra Bank | Up to 16% |
| Karnataka Bank | 10.44% onwards |
*Note: Rates as of March 2024, subject to change as per bank regulations.
Types of Education Loans
Based on Location
Domestic Education Loan: For students pursuing education within India.
Overseas Education Loan: For students aiming to study abroad, covering airfare, accommodation, and tuition fees.
Based on Course
Undergraduate Loans: For students pursuing undergraduate degrees, typically 3-4 years in duration.
Postgraduate Loans: For students seeking postgraduate degrees, usually 2 years long.
Career Development Loans: For professionals looking to enhance their skills through courses and training.
Based on Collateral
Loan Against Property, Deposits, and Securities: Financing by pledging immovable assets or financial instruments.
Third-Party Guarantee: Obtaining a guarantee letter from a bank employee or a home bank.
Features and Benefits
- Loan amount up to Rs.1 crore for international students and Rs.50 lakh for domestic students.
- 100% financing under certain conditions.
- Covers additional expenses like travel and laptops.
- Preferential forex rates for international disbursements.
- Parents as joint borrowers.
- Repayment tenure up to 15 years.
- Moratorium period up to 6 months to 1 year post course completion.
- Tax benefits on interest payments for up to 8 years under Section 80E.
Expenses Covered
- Fees to educational institutions.
- Examination, library, and laboratory fees.
- Travel expenses for studies abroad.
- Insurance premiums for student borrowers.
- Caution deposit and refundable deposits.
- Books, equipment, instruments, uniforms.
- Computers if required for the course.
- Other expenses like study tours, project work, and thesis.
Courses Covered
- Graduation and post-graduation courses (professional/technical/diploma).
- Courses conducted by autonomous institutions like IIM, IIT, IISc, XLRI, NIFT, NID.
- Pilot training, aeronautical, shipping courses approved by respective authorities.
- Job-oriented courses for graduation, post-graduation, or diploma.
- Skill development courses.
Eligibility Criteria
- Loans for approved undergraduate, postgraduate programs, PhDs, diploma courses, and job-oriented courses.
- Admissions in recognized institutions, both domestic and international.
- Completed 10+2 for undergraduate courses, a degree for postgraduate courses.
Documents Required
- KYC documents.
- Academic mark sheets.
- Admission letter.
- Fee structure.
- Co-applicant KYC and income proof (if required).
- Additional documents as requested by the bank.
Tax Benefits
- Interest paid on the education loan can be claimed as a deduction under Section 80E.
- No limit on the deduction amount for interest repayment.
- Deduction available for 8 years from the year of loan repayment or until full repayment.
How to Apply
Online Application
- Visit the bank’s website and select the education loan scheme.
- Download or access the application form.
- Fill the form and submit with necessary documents.
- Bank verifies documents and evaluates the course and collateral.
- Upon approval, the loan amount is disbursed.
Offline Application
- Visit the bank branch.
- Fill the application form and submit it with documents.
- Bank verifies the application and processes the loan.
Applying for an education loan involves understanding various options and fulfilling eligibility criteria, ensuring students can finance their education effectively.
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