Education loans: These banks offer lowest interest rates

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Education loans are a very popular tool for fulfilling the career dreams of many into reality even when they don’t have ready money to pay for higher education upfront. Amid the Covid-19 pandemic as jobs and income dried up, education loans surged. Banks are taking extra precaution before sanctioning higher education loans. On the other hand, loans have also turned cheaper. At present one can get an education loan on interest rates as low as 6.75% per annum. Generally, state-owned banks offer a lower interest rate. In the top 9 list, eight are public sector banks. Among private lenders only IDBI Bank in the list. Take a look on the list:

Cheapest education loans

State-owned Bank of Baroda (BoB) offers education loans at an interest rate of 6.75% for Rs 20-lakh. This rate is the lowest among all banks in our country. The tenure of the loan is seven years.

Next on the list of lenders offering the lowest interest rate is Union Bank of India (UBI).

State Bank of India (SBI), country’s largest lender, in the third position. It charges 6.85%, a rate also offered by Bank of India and Central Bank of India too.

Punjab National Bank, Canara Bank and IDBI Bank offer interest rates of 6.9% for Rs 20-lakh education loan with a seven-year repayment tenure.

On the other hand, education loan offers by Bank of Maharashtra start at 7.05% interest rate.

Surge in NPA

As of December 2020, a sum total of Rs 8,263 crore education loan belonging to more than 3.5 lakh accounts were classified as NPA. The total outstanding education loan is Rs 84,965 crore and the number of total loan accounts is more than 23.3 lakh. This is according to data from state level banker’s committee sources.

Of the Rs 84,965 crore total outstanding amount, loans to medical students amount to Rs 10,147 crore, engineering students Rs 33,316 crore, nursing Rs 3,675 crore, MBA Rs 9,541 crore and all other streams taken together Rs 28,286 crore.