SBI slashes interest rate on education loan

Editor - CoolAvenues | June 18,2013 11:23 am IST

India’s largest nationalized bank, State Bank of India (SBI), has cut the interest rate on educational loan for admission in to premier b-schools to 10.7%.

Further, there is concession in the interest rate for students who have two years of work experience and who would add a parent or the spouse as co-borrower. The interest rate prescribed for such students would be 9.95%.

These interest rates would be applicable to 53 reputed 'List A' management, engineering, medical and law schools including the Indian Institutes of Management (IIM), XLRI Jamshedpur, ISB Hyderabad, MDI Gurgaon among others. Loans for other 61 colleges in 'List B' that includes FMS Delhi, IIFT Delhi, SP Jain Mumbai, Nirma Ahmedabad and others would be available at 11.45%.

If bank’s claims are to be believed, these rates are the lowest in the country for educational loans.

Earlier, SBI education loans to top b-schools were avaiable at 12%, 200 basis points above the old base rate of 10%. Last week, the bank slashed the base rate by 0.3% points to 9.70% and lowered the interest rates for 'List A' of 53 topmost schools to 10.70%.


Additional concessions for ‘List A’ colleges include:
• 0.25% if you have work experience of more than 2 years
• 0.5% if parents, spouse or guardian sign up as co-borrowers
• 0.75% if you put up collateral security of value equal to loan amount

The effective rate of interest with all the three concessions above would not be lower than 9.95% per annum.

Regular rate for ‘List B’ colleges is 11.45% per annum with no concessions.

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