Education Loan Interest Rates

Education Loan Interest Rates



Learn about the most recent interest rates on education loans from India’s biggest banks so you can compare rates and choose the best student loan for your needs. The rate of interest on these loans is influenced by a number of factors. For improved financial management, understand what they are and how to calculate your college loan EMI.


Find out everything you need to know about the eligibility criteria and papers you’ll need to submit your application so it has a better chance of being approved.




Compare Education Loan Interest Rates 2022

Banks Interest Rates Processing Fees

Punjab National Bank RLLR + BSP + 1.25% 1% of loan amount

Andhra Bank 10.25% p.a. 1% of loan amount

Canara Bank One Year MCLR + 2.00% Nil

State Bank of India 8.65% Up to Rs.10,000

Bank of Baroda BRLLR + 0.25% 1% of loan amount

IDBI Bank 6.75% to 8.75% p.a. Contact the bank

Bank of India One Year MCLR + 1.70%

Study in India: Nil

Study in abroad: Rs.5,000

Tamilnad Mercantile Bank 10.45% to 11.45% p.a. 1% of the loan amount

HDFC 9.55% to 13.25% p.a. Up to 1% of loan amount

UCO Bank UCO Float Rate + 2.40% Nil

Karnataka Bank 9.98% to 12.38% p.a. Contact the bank

Federal Bank 10.45% p.a. onwards Contact the bank

Karur Vysya Bank 10.60% to 11.60% p.a. Nil

Axis Bank 13.70% to 15.20% p.a. Rs.15,000 + GST

Kotak Mahindra Bank 11.50% to 24% p.a. Nil



Most of the bank. Offers zero processing Fee for courses in India. Please contact the bank for detail.


Types of Interest Rates in Education Loan

The type of interest rate on educational loans depends on the bank. Some banks offer a fixed interest rate throughout the loan repayment tenure. Others have interest rates that are pegged to the one-year Marginal Cost of funds based Lending Rate (MCLR). This can be reset at regular intervals, which would then affect the interest rate of the educational loan.


Factors that Determine Education Loan EMI

There are many factors that determine how much your Equated Monthly Instalment (EMI) will be on your education loan. These factors would be:


Interest rate on the loan

Loan amount

Repayment tenure

How to Calculate Your EMI on Education Loans

The formula that is used to calculate your education loan EMI would be:


EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]


P = Principal amount


R = Rate of Interest


N = Number of years for repayment (this is calculated in months)


You can also use an online EMI calculator to give you a detailed amortisation table of your EMI. You can use a free online education EMI calculator for this. All you have to do is enter your required loan amount, prevailing interest rate, and the repayment tenure of your choice into the relevant fields. You can either enter the figures into the fields or use the slider to set the figures (depending on the calculator). Once you have input the correct data, the amortisation table will be instantly detailed along with information about your total principal amount and total interest to be paid.


Factors to Look Out For

There are many factors to look out for when choosing an education loan. These would be:


Eligibility criteria

Courses for which the loan is applicable

Collateral required, if any

Guarantor required

Margin amount

Interest rate

Loan amount

Repayment tenure

Eligibility Criteria

The eligibility criteria may differ from one lender to the other, but these are the common criteria that you have to meet to be approved for an education loan:


Indian national

Age: Up to 35 years for non-employed individuals and up to 45 years for employed individuals

Proof of admission into the educational institution

Valid educational certificates showing a good academic record (of more than 50% marks)

Guarantor’s income proof or credit history

Passport/i20 form/visa in case of studies abroad



Documents Required

These are some of the documents required to complete your loan application:


Fully filled in application form with passport-size photographs affixed as required

Admission letter on letterhead of the educational institute

Academic certificates of the applicant

Marksheets of entrance examination, if any

Scholarship document, if any

Declaration that no loan has been availed from another lender

Proof of identity such as Aadhaar card/passport/driving license/Permanent Account Number (PAN) card, etc.

Proof of address or residence such as utility bills/ration card/Aadhaar card/passport, etc.

Proof of age such as birth certificate or 10th standard certificate




Age proof

Copy of Aadhaar Card /Voter ID/Passport/Driving Licence


Identity proof

Copy of Voter ID/Aadhaar Card/Driving Licence/Passport


Residence proof

Rental agreement/Bank statement of 6 months of the student or co-borrower/guarantor/Copy of Ration card/Gas Book/Electricity Bill/Tel Bill


Income proof

Most recent salary slips or Form 16 of the parent/ guardian/co-borrower

6 months bank statement of the borrower or updated passbook of bank

Updated ITR (Income Tax Return with income computation) of 2 years or IT assessment order of last 2 years of parent/co-borrower/guardian

Documents stating the assets and liabilities of the parent/co-borrower/guardian


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