Higher education is becoming more expensive every year. Whether you’re pursuing an engineering degree in India, an MBA abroad, or a professional medical course, an education loan can help finance your dreams without putting financial pressure on your family.
However, choosing the right lender is just as important as choosing the right university. Even a 1% lower interest rate can save you thousands or even lakhs of rupees over the repayment period.
To help you make an informed decision, we’ve compared five leading banks offering competitive education loan interest rates in India based on the latest available information.
Top 5 Banks with the Lowest Education Loan Interest Rates
| Banks | Interest Rate | Maximum Loan Amount | Repayment Tenure |
| SBI | 6.90% | Up to ₹3 Crore | Up to 15 Years |
| Bank of Baroda | Around 7.40% onwards | Up to ₹2 Crore+ | Up to 15 Years |
| Union Bank of India | Around 7.70% onwards | Up to ₹1.5 Crore | Up to 15 Years |
| Canara Bank | Around 7.85% onwards | Up to ₹2 Crore | Up to 15 Years |
| Indian Bank | Around 7.90% onwards | Up to ₹1.5 Crore | Up to 15 Years |
1. State Bank of India (SBI)
SBI remains one of India’s most preferred education loan providers because of its extensive product range for students studying in India and abroad.
Latest Interest Rates
| Loan Scheme | Interest Rate |
| SBI Scholar Loan | 6.90% – 7.65% |
| PM Vidyalaxmi Utkarsh | 6.90% |
| PM Vidyalaxmi Uttam | 7.20% |
| Standard Student Loan | 9.40% – 9.90% |
| Global Ed-Vantage | 8.90% – 9.40% |
Benefits
- Loans up to ₹3 crore
- Courses in India and abroad
- Long repayment period
- Moratorium during course plus additional repayment holiday
- Interest concession for eligible girl students
- Lower rates for premier institutions
2. Bank of Baroda
Bank of Baroda offers multiple education loan schemes for domestic and overseas education, including special financing for students admitted to premier institutions.
Highlights
- Interest rates start from around 7.40% for eligible categories.
- Loans for studies in India and abroad
- Repayment up to 15 years
- Competitive rates for students admitted to IITs, IIMs, NITs and other premier institutes
- Special concessions for female students under eligible schemes
3. Union Bank of India
Union Bank provides education loans under regular schemes and government-supported initiatives such as PM Vidyalaxmi.
Features
- Competitive floating interest rates
- Loan amount based on course and eligibility
- Flexible repayment after course completion
- Loans for professional, technical and overseas education
- Digital application through Vidya Lakshmi Portal
4. Canara Bank
Canara Bank has long been a preferred lender for education loans due to its attractive interest rates and wide coverage of professional courses.
Benefits
- Interest starts around 7.85%
- Finance for studies in India and abroad
- Higher loan limits for recognised institutions
- Flexible repayment period
- Simple documentation
5. Indian Bank
Indian Bank offers education loans for undergraduate, postgraduate and professional courses in India as well as overseas.
Highlights
- Interest rates from around 7.90%
- Long repayment tenure
- Loans available with or without collateral depending on amount and scheme
- Government-backed education loan schemes available
Also Read: Au Bank Personal Loan: Get up to 10 lakh Loan
Eligibility Criteria
Applicants generally need to:
- Be an Indian citizen.
- Secure admission through merit or entrance examination
- Enrol in a recognised institution in India or abroad
- Meet the bank’s credit and documentation requirements.
Documents Required
Students usually need:
- Aadhaar Card
- PAN Card
- Passport-size photographs
- Admission letter
- Fee structure
- Academic mark sheets
- Entrance examination scorecard
- Income proof of parent/co-applicant
- Bank statements
- Collateral documents (if applicable)
Tips to Get a Lower Education Loan Interest Rate
- Compare multiple public sector banks.
- Apply through recognised government education loan portals where applicable.
- Maintain a strong credit profile for the co-applicant.
- Provide collateral if it helps reduce the interest rate.
- Check for concessions available to female students or premier institutions.
- Borrow only what you need instead of the maximum eligible amount.
Also Read: Udyam Credit Card Scheme
Conclusion
Selecting the right education loan can significantly reduce your overall borrowing cost. While State Bank of India currently offers some of the most competitive education loan rates through its Scholar Loan and PM Vidyalaxmi schemes, Bank of Baroda, Union Bank of India, Canara Bank, and Indian Bank also provide attractive financing options with long repayment tenures and flexible eligibility.
Before applying, compare the effective interest rate, processing fee, collateral requirements, repayment terms, and available concessions to choose a loan that best supports your educational journey and future financial goals.