Education loans at 4 percent interest rate for poor students
By Neelima Shankar
Oct 11, 2007
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New Delhi: Students, which do not belong to the creamy layer of the society and have total family income below Rs. 2.5 lakh per annum can very soon have an education loan at a subsidized interest rate of 4 percent.

Union Ministry of Human Resource Development (MHRD) is working on one such proposal, to offer loan subsidies to poor students. These subsidized education loans will be available to all, irrespective of their caste. This step is going to cost the exchequer Rs. 3,250 crore over the XI Five Year Plan.

The currently prevailing interest rates on education loans hover around 12 percent per annum for amounts up to 4 lakhs and goes up as the loan amount increases. The table below shows approximate interest rates on education loans of 4 lakhs from different lending institutions.

Name of the BankInterest Rates
Jammu and Kashmir Bank Ltd10.50%
Bank of Rajasthan Ltd11.00%
State Bank of Bikaner and Jaipur11.25%
Oriental Bank of Commerce11.25%
Corporation Bank11.25%
State Bank of Hyderabad11.50%
Dena Bank11.50%
State Bank of Mysore12.00%
Indian Overseas Bank12.00%
HDFC Bank Ltd12.25%
Union Bank of India12.25%
Punjab National Bank12.50%
Canara Bank12.50%
Karur Vysya Bank Ltd12.50%
Bank of India12.50%
Central Bank of India12.50%
Indian Bank12.50%
State Bank of India12.75%
UCO Bank13.00%
Indian Overseas Bank13.00%
Allahabad Bank13.25%
Punjab and Sind Bank13.50%

The subsidized education loans from MHRD will be offered only on professional courses of both government and private recognized universities and institutions. Students availing the loan can start repayment after one year of completion of their course or getting a job, whichever occurs earlier. MHRD is finalising the repayment schedule details with the banks. There will be no collateral requirement for these educational loans as government of India will act as the guarantor.

(Comments Posted : 1) Post Your Comments
1. can a person who got loan 0n 2008 avail this offer, if it come to process
mani (Posted: Sep 13, 2011)
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