For students, September has been a crucial month this year. In India, lakhs of students appeared for the Joint Entrance Exam (JEE) and National Eligibility cum Entrance Test (NEET) after a prolonged tussle with the central government.
It’s also that time of the year when overseas-bound students pack their bags to head for their chosen destination country for higher studies.
Public sector banks show the way
While private and foreign banks vie hard for slices of businesses in other loan segments, particularly credit cards, public sector banks rule the roost in the education loan category.
At 6.80 per cent for a Rs 20-lakh study loan with a tenure of seven years, PSU major Union Bank of India offers the lowest rate at present, according to data compiled by BankBazaar.
It is followed by Central Bank of India and Bank of India in the list of top ten banks by cheapest rates charged. Both levy an interest rate of 6.85 per cent. State Bank of India and Punjab National Bank quote a slightly higher rate of 6.90 per cent.
No private or foreign bank figures in this top-10 list. South Indian Bank, which offers the lowest interest rate (7.65 per cent) amongst private sector banks, is 11th on the list of lenders offering the cheapest education loan rates.
A note on the table
Interest rate and charges on education loan for all listed (BSE) public and private banks are considered for data compilation; Banks for which data is not available on their website, are not considered. Data is collected from the respective bank’s website as September 3, 2020. Banks are listed in ascending order on the basis of interest rate, i.e., the bank offering the lowest interest rate on education loan (Loan amount up to Rs 20 lakh) is placed at the top and highest at the bottom. The lowest rate offered by the banks on a loan of up to Rs 20 lakh is considered in the table. EMI is calculated on the basis of Interest rate mentioned in the table for Rs 20 lakh-loan with tenure of seven years (processing and other charges are assumed to be zero for EMI calculation); GST is excluded.