India’s largest lender, State Bank of India (SBI), is planning to slash lending rates for education loans by 0.25 per cent as early as this week.
SBI plans to announce the rate cut early this week, enabling students who take loans from May 1 to September 30, avail the benefit of reduced rates, an SBI official said.
“The idea is to help students aspiring for higher studies with adequate financial support. Interest rates on all category of education loans are likely to come down by 0.25 per cent. The scheme will be applicable for all education loans approved during May-September, 2009,” the official said.
SBI currently offers education loans for rates ranging from 11.75 per cent to 13.25 per cent. Female students can avail loans for a 0.5 per cent less rate across all categories.
While education loans up to Rs four lakh do not require any collateral security, those between Rs 4 lakh and Rs 7.5 lakh would require a third-party guarantee.
For loans above Rs 7.5 lakh and up to Rs 20 lakh, borrowers will have to produce some tangible assets such as a house or land as security. The loan re-payment period ranges from five to seven years.