The country’s largest lender, State Bank of India (SBI), On Tuesday said that it has lowered interest rates on education loans by up to 250 basis points, for a limited period.
Interest rates on education loans, which are linked to the bank’s prime lending rate (PLR), will be reduced to 11.5 per cent from 11.75 per cent for up to Rs 4 lakh, SBI said in statement.
It added that, for the Rs 4 lakh-Rs 7.50 lakh educational loan bracket, the interest has been slashed to 11.25 per cent from 13.25 per cent. At present, SBI’s PLR stands at 12.25 per cent per annum.
For loans of Rs 7.5-lakh and above, interest rate has been reduced by 1.25 per cent from 12.25 per cent to 11 per cent. Female students will get a further concession of 0.50 per cent in interest, the statement said.
The lowered rates would be applicable for loans sanctioned during May-September 2009, while extant rates would continue for current loans, the release said.
SBI extends loans of up to Rs 10 lakh for studies in India and Rs 20 lakh for courses abroad. During the moratorium/repayment holiday, simple interest rate is charged.
A further concession of 1 per cent in interest rate is given for promptly servicing the interest during the moratorium/repayment holiday. A repayment period of 5-7 years is given after moratorium, the bank said.
The state-run lender offers collateral-free loans of up to Rs 4 lakh to students. Third-party guarantee or other collateral is required only if the loan amount is higher than Rs 4 lakh.
SBI has been the market leader in extending loans to students for pursuing higher studies in India and abroad. Loan limits aggregating Rs 2,653 crore were sanctioned during the period from April 2008 to March 2009, the statement said.
