Good news for students planning to take education loans!Posted by Nishatha Abraham on Dec. 3, 2012, 1:20 p.m.
Public sector banks are paying heed to the issue of education loans which is pretty close to Finance Minister P. Chidambaram’s heart.
The Mumbai-based public sector lender Union Bank of India has announced reduction in interest rates on education loans by 150-200 basis points. Its rate on interest on education loans now stands at 12.75% for the loans up to Rs 7.5 lakh and 12.5% for the loans above Rs 7.5 lakh.
The bank announced a discount of 50 basis points for the female students over and above these rates making effective rate of interest for female students at 12.25% and 12% respectively for the loans up to Rs 75 lakh and loans above Rs 75 lakh.
Despite the reduction, these rates are higher than SBI's interest rate on education loans - 11.75%. for loans above Rs 7.5 lakh. However, the loans between Rs 4 lakh and Rs 7.5 lakh are charged at 13% while loans below Rs 4 lakh are charged at 13.25%.