Education Loan Interest Rate
Lowest Interest Rate Student Loan Options For Abroad Studies
Interest rate is the amount of money charged on the principal loan amount by a lender. If you borrow money from someone, you will have to pay some monthly amount over and above the principal amount. In simple terms, it is the cost of borrowing money from a bank or other financial institution. In abroad education loans, even a slight variation in interest rate per annum can make a significant difference in the total amount repaid!
S.No. | Lender | Interest Rate |
---|---|---|
1. | State Bank of India | Starts @ 10.15 % p.a. |
2. | Bank of Baroda | Starts @ 9.7% p.a. |
3. | Axis | Starts @ 10.5% p.a. |
4. | ICICI | Starts @ 10.5% p.a. |
5. | HDFC Credila | Starts @ 9.75% p.a. |
6. | Avanse | Starts @ 11.0% p.a. |
7. | InCred | Starts @ 11.5% p.a. |
8. | Auxilo | Starts @ 10.5% p.a. |
Interest rate as in October 2022.
Rates can vary depending on borrower's profile.
Interest rate of secured loans is always lower than unsecured loans.
Types of Interest Rates
What are the different types of interest rates?
Floating Interest Rate
- Can increase or decrease during the loan tenure.
- Change depends on the market conditions.
- Public sector banks offer less volatile interest rates.
Fixed Interest Rate
- Stays the same throughout the loan tenure.
- The EMIs remain the same as well.
- The certainty element makes it easy for a borrower to budget.
Education Loan EMI Calculator
I want to borrow at
a rate of % over year(s)
My course is month(s) long
Total Interest to be paid
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Total Payment Principal + Interest
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Your EMI per month will be
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Interest Rate for Secured and Unsecured Loan
State Bank of India | 8.65% per annum, with additional 0.50% concession for girl students, and additional 0.5% for Rinn Raksha credit life insurance or similar policyholders. |
Bank of Baroda | Listed Universities: 8.25% per annum for boys, 7.75% for girls, Unlisted Universities: 8.9% for boys, 8.4% for girls. Interest rates are linked to MCLR |
Axis Bank | Starts at around 11% per annum. The exact interest rate depends upon the applicant’s profile |
ICICI Bank | Starting at 10.50 % per annum. The exact interest rate depends upon the applicant’s profile |
HDFC Credila | Starts at around 11% per annum. The exact interest rate depends upon the applicant’s profile |
Avanse | Starts at around 12.65% per annum. The exact interest rate depends upon the applicant’s profile |
InCred | Starts at around 11.75% per annum. The exact interest rate depends upon the applicant’s profile |
Auxilo | Starts at around 12.70% per annum. The exact interest rate depends upon the applicant’s profile |
State Bank of India | Doesn’t provide unsecured loan above INR 7.5 Lakhs |
Bank of Baroda | Doesn’t provide unsecured loan above INR 7.5 Lakhs |
Axis Bank | Starts at around 11% per annum. The exact interest rate depends upon the applicant’s profile |
ICICI Bank | Starting at 10.75% per annum. The exact interest rate depends upon the applicant’s profile |
HDFC Credila | 11% to 12.5%. |
Avanse | 11.75% to 16% per annum. |
InCred | Up to Rs.10 lakh: 12.75% - 16% p.a., Above Rs.10 lakh: 11.75% - 16% p.a. |
Auxilo | 12.70% p.a -18% p.a. |
Prodigy Finance |
The exact rate is linked to a benchmark rate (US 3 month LIBOR) and depends on your profile. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the loan |
MPOWER Financing |
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Our Lending Partners
EMI = Principal Amount + Interest Amount
There are two ways to calculate an interest rate –
- Simple Interest
- Simple Interest = Principal Amount x Rate of Interest x Time/100
For Example - you borrow INR 50,000 for 1 year at a 5% interest rate, then according to the formula, you owe INR 2500 as interest. When repaying the borrowed amount, you will have to make an extra payment of INR 2500 as a fee.
- Compound Interest
- A = P (1 + r/n) nt
- A = Compound interest amount
- P = Principal amount
- r = Interest rate per annum
- n = number of times in a year the interest gets compounded
- t = number of years.
For example, you borrowed INR 10 lakhs at an interest rate of 10% for 5 years. The total interest on this amount is INR 4,97,916.
- Total interest to be paid - 4,97,916
- Total Payment (Principal + Interest) - 14,97,916
- EMI per month - 24,965
- A = P (1 + r/n) nt
In an education loan, the interest charged is a combination of both. During the study period, simple interest is charged, and after, compound interest is charged.
- Padho Pardesh - Interest subsidy on education loan schemes to pursue abroad education, provided to students belonging to minority communities. (Please note that this scheme has been discontinued by the Government of India.)
- Dr. Ambedkar Central Sector Scheme - It is an interest subsidy scheme for abroad educational loans provided to promote the foreign education of Other Backward Classes and Economically Weaker Classes.
- Central Sector Interest Subsidy - It is an interest subsidy scheme for economically weaker sections. If the family income is not more than INR 4.5 lakhs, the student can avail of the interest subsidy.
The two main abroad education loan products are offered by the State Bank of India and Bank of Baroda -
- SBI’s Global Ed-Vantage Loan - 7.65% for women, 8.80% for men
- BOB’s Baroda Scholar - 7.85% for women, 8.35% for men
- Axis Bank - Starts at 11.25%
- ICICI Bank - Starts at 11.50%
Let’s take a glance at the interest rates offered by leading NBFCs -
- Auxilo - Starts at 12.70%
- Avanse - Starts at 12%
- HDFC Credila - Starts at 11%
- InCred - Starts at 12%