SBI cuts education loan rates by up to 1pc

New Delhi: The country`s largest lender State Bank of India (SBI) today reduced interest rates on education loans by up to 1 percentage point across various segments, a move likely to be followed by other lenders.

In order to extend financial assistance to students pursuing higher education in India and abroad at affordable rate, SBI has reduced the rate of interest for education loans, the bank said in a statement.

Education loans up to 4 lakh have become cheaper by 0.25 percentage point to 13.50 per cent against 13.75 per cent. However, loans between Rs 4 lakh and 7.5 lakh will be available at 13.25 per cent against 14.25 per cent, a sharp reduction of 1 pecentage point.

Loans beyond Rs 7.5 lakh will cost 0.25 percentage point less at 12 per cent. Under this education loan scheme, loans up to Rs 10 lakh for studies in India and up to Rs 20 lakh for studies abroad are given. The new rates are effective from today, the bank said.

Besides, under the SBI Scholar Loan Scheme extended to students joining elite institutions like IIMs/IITs/NITs etc, the new rate of interest is 200 basis above Base Rate, currently 12 per cent.

The base rate of the bank is 10 per cent. At present, it said, 111 institutes are covered under this scheme and loans upto Rs 15 lakh are given. Loans are sanctioned at attractive terms without any security except parent/guardian as co-borrower, it said.

In addition, the bank will offer 0.50 per cent additional concession for girl students. At the same time, 1 per cent concession for the entire tenure of loan, if full interest is serviced during moratorium period (including course duration), it said.