New Delhi: Students, which do not belong to the creamy layer of the society and have total family income below Rs. 2.5 lakh per annum can very soon have an education loan at a subsidized interest rate of 4 percent.
Union Ministry of Human Resource Development (MHRD) is working on one such proposal, to offer loan subsidies to poor students. These subsidized education loans will be available to all, irrespective of their caste. This step is going to cost the exchequer Rs. 3,250 crore over the XI Five Year Plan.
The currently prevailing interest rates on education loans hover around 12 percent per annum for amounts up to 4 lakhs and goes up as the loan amount increases. The table below shows approximate interest rates on education loans of 4 lakhs from different lending institutions.
|Name of the Bank||Interest Rates |
|Jammu and Kashmir Bank Ltd||10.50% |
|Bank of Rajasthan Ltd||11.00%|
|State Bank of Bikaner and Jaipur||11.25%|
|Oriental Bank of Commerce||11.25% |
|Corporation Bank||11.25% |
|State Bank of Hyderabad||11.50%|
|State Bank of Mysore||12.00%|
|Indian Overseas Bank||12.00% |
|HDFC Bank Ltd||12.25%|
|Union Bank of India||12.25%|
|Punjab National Bank||12.50%|
|Karur Vysya Bank Ltd||12.50%|
|Bank of India||12.50% |
|Central Bank of India||12.50%|
|State Bank of India||12.75% |
|UCO Bank||13.00% |
|Indian Overseas Bank||13.00% |
|Allahabad Bank||13.25% |
|Punjab and Sind Bank||13.50% |
The subsidized education loans from MHRD will be offered only on professional courses of both government and private recognized universities and institutions. Students availing the loan can start repayment after one year of completion of their course or getting a job, whichever occurs earlier. MHRD is finalising the repayment schedule details with the banks. There will be no collateral requirement for these educational loans as government of India will act as the guarantor.