SBI slashes interest rate on education loans

Loans above Rs 4 lakh upto Rs 7.50 lakh and above Rs 7.50 lakh will stand reduced to 11.25 per cent and 11 per cent against the present rates of 13.25 per cent and 12.25 per cent respectively. These loans are presently linked to the bank’s prime lending rate (PLR) which ispresently at 12.25 per cent p.a.

Girl students would get further concession of 0.50 per cent in interest. The lower rates are applicable for new loans,but the present rates would continue for existing loans. SBI extends loans upto Rs 10 lakh for studies in India and Rs 20 lakh for studies abroad. During moratorium,the period when the loan-taker undergoes studies,simple interest rate is charged on the loan amount. A further concession of 1 per cent in interest rate is given for promptly servicing the interest during the repayment holiday. A repayment period of five-seven years is given after moratorium.

SBI offers collateral-free loans upto 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 and assisted 3,56,000 students. Loan limits aggregating Rs 2,653 crore were sanctioned during

the period from April 2008 to March 2009,the bank said in a statement.