Under this scheme the loan rate for nearly Rs. 4 Lakhs has been reduced by 0.25%, which is now 13.50% against 13.75%. While the loans from Rs.4-7.5 lakhs will be offered at 13.25% against 14.25%, which is exactly a 1 percent reduction. In addition, loan rate for education loans more than Rs.7.5 lakhs will be reduced by 0.25% that goes down to 11.75% against 12%.
The education loan scheme provides loans up to Rs.10 lakh for studies in India whereas for abroad studies the amount is up to Rs.20 lakhs. These new rates are being followed from February 27, 2012 onwards. In addition, the scheme has also been extended to the students enrolling into best institutes such as IIT, NIT, IIM for whom the new interest rate is 200 basis above base rate, presently at 12 percent.
The State Bank of India's base rate is ten percent. Currently the education loan scheme is covering 111 institutions while providing loans up to Rs.15lakh. No security is required for education loans and the only condition for loans is that the parents or guardians should be the co-borrower.
Moreover, for girl students an additional concession of 0.50% is offered. 1 percent concession for the entire tenure of loan is applicable, if full interest is serviced during moratorium period (including course duration).
Source : TOI