Education Loan Interest Rates : Studying abroad is like a dream for the students. However, raising money for studies abroad is not a big deal for the rich. On the other hand, talented students get scholarship, which reduces their financial burden, but ordinary students of ordinary families face a huge problem in arranging money for studies abroad. Most of the people take education loan for the money requirements for studying abroad. While banks are taking extra precautions before sanctioning higher education loans this academic year, loans have also become cheaper. Many banks have cut loan rates during the festive season. Talking about education loan, many banks have reduced its interest rate from 6.75 percent to 7.15 percent. Due to this, the EMI of education loan has also come down significantly. Here we will tell you about the education loan interest rates offered by different banks.
Bank Of Baroda (BoB)
Bank of Baroda is offering education loan at the rate of 6.75 percent. This rate is offered for education loans up to Rs 20 lakh with a tenure of seven years. Accordingly, your monthly installment (EMI) becomes Rs 29,942.
Union Bank of India
Another public sector giant in the list of lenders offering the lowest interest rate on education loan. Union Bank of India interest rates start from 6.8 percent. Accordingly, its EMI is Rs 29,990.
Home Loan Rates: Bank of Baroda makes home loan cheaper, know which banks have less than 7 percent interest rate
State Bank Of India (SBI)
The country’s largest bank State Bank of India is offering education loan at the rate of 6.85 percent. It is slightly costlier than BoB and Union Bank of India. Apart from this, the interest rate on education loan in Bank of India and Central Bank of India is also 6.85 percent. In such a situation, if you take a loan from these banks, your EMI will be Rs 30,039.
Punjab National Bank (PNB)
Public sector banks are at the top in the list of banks offering cheap education loans. Punjab National Bank, Canara Bank and IDBI Bank are offering education loan at the rate of 6.9 percent. This rate is offered for education loans up to Rs 20 lakh with a tenor of seven years.
Bank Of Maharashtra
Education loan interest rates in Bank of Maharashtra start at 7.05 percent. Its EMI amount is Rs 30,234. Similarly, Indian Bank is offering education loan at the rate of 7.15 percent. This rate is offered for education loans up to Rs 20 lakh with a tenor of seven years.
Best Regular Income Saving Options: Low interest rates reduce the attractiveness of FDs, these are better options for great returns
It is also important to keep these things in mind
- Compare interest rates from different lenders while choosing a bank for education loan. You can also take a loan from a Non-Banking Finance Company (NBFC). Through the comparison, you will be able to understand which bank has the cheapest interest rate.
- You have to keep in mind that how much your EMI will be, it depends on the interest rate of the education loan. Higher the interest rate, higher will be the EMI burden on you.
- After completing studies, your child will have to repay the loan on time. If there is a delay in repayment of the loan, your child’s credit score may get affected.
- You can also take advantage of tax exemption through this. The tuition fee paid under the education fees of children comes under the purview of tax saving under section 80C. This exemption is available only on the tuition fee deposited in a government or private school, college or institute. Other items like smart class, development fee, registration fee etc. are not exempted.
- The interest paid on education loan taken for the purpose of higher studies i.e. graduation and post graduation level studies is tax free. The loan can be for the taxpayer, wife, child or any student whose taxpayer is a legal guardian. This provision is under Section 80E of the Income Tax Act and is applicable to loans taken in any amount.
- You get this exemption, whether education loan is for study anywhere in the country or abroad. Tax exemption on education loan can be availed for 8 years from the year in which the loan interest is repaid or till the full interest is paid, whichever period ends earlier.