After the Reserve Bank of India (RBI) hiked the key policy rate by 40 basis points on May 4, interest rates on floating-rate retail loans linked to the repo rate increased. Furthermore, when the RBI delivers its June monetary policy review on Wednesday, it is expected to raise the rate even further - by as much as 50 bps, according to some forecasts. And this is only the start of the country's interest rate cycle hardening.
This could not have come at a worse time for students preparing for higher education, particularly those planning to study abroad in August/September. However, some banks – which are all government-owned – are currently offering interest rates of under 7.3 percent.
Public sector bank offers the cheapest education loan in the country at 6.75 percent. The EMI for a Rs 20 lakh education loan with a seven-year repayment period will be Rs 29,942.
For a Rs 20 lakh study loan, the Central Bank of India would charge 6.85 percent interest. The EMI for a loan of this form with a seven-year term will be Rs 30,039.
This government-owned bank is third – and last – on the list of banks charging interest rates under 7% among the top 10 lenders offering the cheapest education loans. Your EMI would be Rs 30,088 at a rate of 6.9%.
On education loans, this state-owned banking major charges a 7% interest rate. Over the course of seven years, you would have to pay an EMI of Rs 30,185.
Both Bank of Baroda and Punjab National Bank, two major public sector lenders, will provide a Rs 20 lakh education loan with a seven-year repayment period and a 7.15 percent interest rate.
The education loan from India's largest bank would have a 7.25 percent interest rate. The EMI on a Rs 20 lakh loan with a seven-year repayment period will be Rs 30,340. According to BankBazaar data, two comparatively smaller government-owned banks – Bank of India and Indian Overseas Bank — provide the same interest rate.
This state-owned bank is the last on the list of ten cheapest lenders, with an interest rate on education loans of 7.30 percent. A Rs 20 lakh loan with a seven-year repayment period has an EMI of Rs 30,480.
Source - Bankbazaar
