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Education Loans: Banks to give Discounts on Interest Rates

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Banks to give Discounts in Edu'n Loans
It is good news for those students who are in need of an education loan in order to continue their higher education. Yes, now the banks are offering discounts on the Interest rates of Education loans.

According to the sources, in the academic year 2013-13 around 29 lakh students had opted for education loans from banks. The banks had offered for about 6 Thousand crore loans to students.

This year, the banks have targeted to offer loans of about 2,083 crores for higher education. In Andhra Pradesh, the Andhra Bank, Indian Bank, Syndicate Bank, State Bank of India, State Bank of Hyderabad are the leading banks that are providing educational loans.

The Indian Banks give a minimum of Rs. 10 lakh loans for students for continuing Higher Education in India. Moreover, the banks also give more than Rs. 20 lakh loan for students to study abroad.

The loans are offered after calculating the tuition fees, hostel fees, uniforms, books, library fees, educational tours, project work and thesis. In case of students studying abroad, the air flight and insurance charges are also included.

Here are a few details that you should know:

  • Educational loans below Rs. 4 lakhs do not need any security
  • For loans below Rs. 4 - 7.5 lakh third party surety is sufficient
  • For loan up to Rs. 7.5 - 10 lakhs, fixed assets must be provided as surety
  • For educational loans below Rs. 4 lakhs, parents of the student need not pay any margin. But for loans worth Rs. 4 - 10 lakhs, the parents have to bear five percent margin money. Interest on educational loans is determined based on bank base rate.
  • The loans will be granted within one month if all the necessary documents are submitted.

Please Note:

1. If the annual income of student's parents is below Rs. 4 lakhs, there will be an exemption of interest on educational loans from Andhra Bank. This facility is available for students who are studying Technical and Professional Courses only.

2. The bank also offers one% discount on interest for students who secures ranks below 50 in state level entrance exams and below 100 ranks in national level entrance examination.

3. Girl Students are given an additional of 0.5% discount on Interest.

4. Reserved bank of India has clearly stated that surety is required for Education Loans above Rs. 4 Lakhs.


1. Students who study courses recognized by UGC (University Grants Commission), AICTE, AIBM, IIT and IIM are eligible for loans.

2. Degree and Postgraduate students who are studying in institutes recognized by state and central governments in India are also Eligible for Loans.

For more details on Loans please visit:

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