Good news for students planning to take education loans!
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%.