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MBA in India

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SBI slashes education loan rates, Scholar Loan now available at 10.7%




(Photo: Peter Gibbons)


India's biggest lender State Bank of India (SBI) has slashed the education loan interest rate for premium b-schools to as low as 10.7%. Further, for students who have two years of work experience and add a parent or the spouse as co-borrower, the interest rate would be even lower at 9.95%.

These interest rates would be applicable to debt taken under the SBI Scholar Loan Scheme for studying at 53 reputed 'List A' management, engineering, medical and law schools including the Indian Institutes of Management, XLRI Jamshedpur, ISB Hyderabad, MDI Gurgaon among others (See complete list here). Loans for an additional 'List B' of 61 colleges including FMS Delhi, IIFT Delhi, SP Jain Mumbai, Nirma Ahmedabad and others would be available at 11.45%. The bank claims these rates to be the lowest in the country for educational loans.

"We lowered the rates to encourage students who want to study at schools under the low-risk category," said a senior SBI official explaining the reason behind the loan rate cuts. Previously, SBI Scholar Loans to top b-schools were disbursed at 12%, 200 basis points above the old base rate of 10%. Last week, the bank slashed the base rate by 0.3 percentage points to 9.70% and lowered the interest rates for 'List A' of 53 topmost schools to 10.70%, 100 basis points above the new base rate.


List A colleges

Base rate: 9.70%

Regular rate = 100 basis points above base rate = 9.70+1 = 10.70% per annum

Additional concessions,

  • 0.25% if you have work experience of more than 2 years
  • 0.5% if parents, spouse or guardian sign up as co-borrowers
  • 0.75% if you put up collateral security of value equal to loan amount

The effective rate of interest with all the three concessions above would not be lower than 9.95% per annum.


List B colleges

Regular rate = 11.45% per annum

What kind of savings could one enjoy with the rate cuts? For a loan of Rs 12 lakh for a top b-school, you could save as much as Rs 69,300 over a seven-year repayment period with the new interest rate of 10.7%, against the previous interest rate of 12%. That additional Rs 69,300 could now make way for a more fancy laptop, down payment for a car or a cheap vacation to South East Asia.

Interest rates for SBI's standard education loans for higher educational institutions not included in either List A or List B too have been slashed. The interest rate for a loan upto Rs 4 lakh has become cheaper by 0.3% to 13.2%. For loans above Rs 7.5 lakh, the rate has been lowered by 0.55% to 11.45%. Loans between Rs 4 lakh and Rs 7.5 lakh would however attract an increased interest rate of 13.45%, which previously used to be 13.25%.


  • 50Comments
  • how to contact SBI , and I do not have any security to show. 25 Mar.
  • Hi Guys, If anybody interested in taking Scholar Loan or.... 02 Jun.
  50 Comments
Manojp24
Manoj Parab @Manojp24 140
Wat abt those who will opting loan for other institutes like Welinkgar..? (Since its not in their list)
abhas17
abhas vyas @abhas17 495
I think they have categorized the colleges based on their fees and not on academics! for iims u have to shell out more from ur pocket and so less rate of interest compared to others in which u need to shell out less..
Nitish1805
NITISH SINGH @Nitish1805 2
@Manojp24 Why did you choose PGDM E-Bizz mumbai over PGDM core.....I got PGDM E-Bizz Mumbai.....can you please tell me....placements are good in this over core...I have 30 months exp in TCS.
Please let me know should i continue with this.
mklchandra
Mak .. @mklchandra 239
can the full loan amount be paid before moratorium period ?
pheonix2013
Vaibhav Gupta @pheonix2013 760
guys check link... iift is also in group A along with IIMs... author of this article may kindly edit same
pheonix2013
Vaibhav Gupta @pheonix2013 760
also list A has 60 colleges.. @laj kindly edit this post.. unnecessary confusion
nj182002
nj182002 @nj182002 1.7 k
Dont worry buddies..IIFT mentioned in List B in post but actually if you see the link..It is in List A as deserved
jack-ma
jack ma @jack-ma 362
Interest is decided by the supply and demand for credit. In case of edu-loans, there's huge demand, one which can't be substituted with any other product, and so they charge a premium over the risk of lending such amount to a person who's not worth a dime if sold in the market today. There's no comparison with car/house loans, in which case the product itself has a value for the bankers unlike decorated college degrees which won't fetch a bottle of water for them.
catnlyiimb
IMT Ghaziabad @catnlyiimb 197
how to contact SBI , and I do not have any security to show
ASHOK100
ASHOK SHARMA @ASHOK100

Hi Guys,

If anybody interested in taking Scholar Loan or Education in NCR please contact at following numbers.

1. 9871698451

2. 8130455776

3. 8130455773

4.9650391927

5. 8130455775

6. 9871698456

7.

9650391935

All the best !`