It is better to fund your or your children’s education needs by savings. If you haven’t been able to save enough to offset the rising cost of higher education for your children, so you can borrow for education. Education loans shall be issued for a period of 7-8 years. If you go to a bank that gives you low-interest rates and reasonable tenure depending on your eligibility, it is easier to consider the same thing.
The key public sector of the Union Bank of India currently offers the lowest interest rate in the Education Loan Area, beginning at 6.8 percent for Rs 20-Lakh Education Loans with a seven-year term.
Following this, the Central Bank of India, the Bank of India, and the Bank of Baroda are offering a 6.85 percent interest rate on education loans for Rs 20-Lakh seven-year education loans. The State Bank of India (SBI) charges 6.9 percent of the same loan sum and length.
The most expensive loan offering on the top ten cheapest education loans list is Indian Overseas Bank (IOB) which comes at an interest rate of 7.25%, which is much cheaper than HDFC Bank, Axis Bank, and ICICI Bank, which charge 9.55%, 9.70%, and 11.25% respectively.
The payment fees must be checked by you before applying for educational loans, and they are distributed around banks. On the basis of interest rates, banks are listed in ascending order, i.e. banks with the lowest interest rate on educational loans (loan value up to Rs 20 lakh) are located at the top and the highest at the end. The table considers the lowest lending rates of banks up to Rs 20 lakh. EMI, except for GST, shall be calculated on the basis of the interest rate for the seven-year period and the loan balance of Rs 20 lakh loan. The calculation, transmission, and other fees for the EMI are assumed to be zero.
Under Section 80E of the Income Tax Act, the debt you refund as part of your monthly EMI qualifies you for an income tax deduction. When applying for an education loan, review the payment costs as they vary from bank to bank.