Many students aspire to study at the best universities abroad. While there are several fully funded scholarships available for Indian students, the competition for them is extremely tough and merely one percent of applicants manage to secure the scholarships. Education loans are a good option if you lack the funds and wish to secure admission in an international university. 

Education loans

The interest rate on an education loan depends on several factors such as parents’ income and the chosen university or institute. Loans for reputable institutions with good placement records are often more readily available and may come with more favourable interest rates. 

Several banks waive the processing fees for education loans. Therefore, it is advisable to gather information about such banks before applying for a loan. Make sure that you have compared several available options before finalizing any decision. 

Comparing interest rates

Some banks like Union Bank of India and Central Bank offer education loans at an interest rate of 8.1 percent. For example, if you borrow Rs 20 lakh for 7 years, your monthly EMI will amount to Rs 31,272. However, these interest rates can vary, and you must consult a financial expert for best advice. 

SBI and more

Interest rates for education loans at State Bank of India (SBI) and Bank of Baroda (BOB) start at 8.15 percent. For instance, if you borrow a sum of Rs 20 lakh for a tenure of 7 years, your monthly EMI would be around Rs 31,322. On the other hand, with an interest rate of 8.2 percent for education loans at Punjab National Bank, your monthly EMI would be Rs 31,372 for borrowing Rs 20 lakh for 7 years. 

Canara Bank and HDFC

Canara Bank offers education loans at an interest rate of 8.6 percent. For a loan of Rs 20 lakh for 7 years, your EMI would be Rs 31,774. For the same amount and tenure, HDFC Bank offers an interest rate of 9.5 percent, meaning your EMI will amount to Rs 32,688. 

Being financially smart

Interest rates for education loans can vary from one bank to another and are subject to change over time. Therefore, conduct your own research before arriving at a final decision. Make sure to visit the bank in person to discuss all the terms and conditions properly.