Choosing the right education loan in India can save you lakhs in interest over time. One of the most crucial factors to consider while applying for a student loan is the interest rate — which varies based on the lender, the course, location (India vs abroad), collateral, and even the student’s academic performance.
In this detailed guide, we break down and compare the latest education loan interest rates in India (2025) offered by major public and private sector banks, NBFCs, and government schemes — so you can make the best financial decision for your future.
🔍 Why Interest Rates Matter So Much
Even a 1% difference in interest rate can have a significant impact over a 7–15 year repayment period. For instance:
- Loan Amount: ₹10,00,000
- Tenure: 10 years
- Interest Rate A: 10% vs Interest Rate B: 11%
- Total Difference: ₹65,000+
🏦 Education Loan Interest Rates (2025): Bank-Wise Overview
Here is a comparative table of top Indian banks and NBFCs offering education loans in 2025:
| Bank/NBFC | Interest Rate (p.a.) | Loan Amount | Collateral Required |
|---|---|---|---|
| SBI Scholar Loan | 8.15% – 10.65% | Up to ₹1.5 Cr | Optional (for <₹7.5L) |
| Bank of Baroda | 8.25% – 10.90% | Up to ₹1 Cr | Yes (above ₹7.5L) |
| Punjab National Bank | 8.40% – 10.75% | Up to ₹20 Lakh | Yes |
| ICICI Bank | 10.25% – 12.00% | Up to ₹1 Cr | Yes |
| HDFC Credila | 11.00% – 13.00% | Customized | Mandatory |
| Axis Bank | 10.25% – 13.50% | Up to ₹40 Lakh | Yes |
| Canara Bank | 8.35% – 10.65% | Up to ₹20 Lakh | Yes |
📌 For bank details and offers, visit:
👉 https://pwwpw.in/top-banks-offering-education-loans-in-india-for-2025
🧾 Factors That Influence Your Interest Rate
- Collateral Security
- Collateral-backed loans generally have lower rates.
- Academic Record
- Students with high marks or admission to top universities (like IITs/IIMs) may get concessions.
- Loan Type
- Domestic education loans tend to have lower rates than study abroad loans.
- Government Schemes
- Central schemes often provide interest subsidies (see below).
- Repayment Capacity
- A strong co-borrower with a good credit score may get you better rates.
- Fixed vs Floating Rate
- Most banks offer floating rates, which may increase or decrease with market conditions.
🧮 Government Interest Subsidy Schemes (2025)
If you belong to an economically weaker section (EWS), you may qualify for a complete interest waiver during your course period under the Central Sector Interest Subsidy (CSIS) Scheme.
Key Features:
- Applicable only for loans up to ₹7.5 lakh
- Moratorium + 1 year interest waived
- Must study in India, not abroad
- Annual family income < ₹4.5 lakh
Learn more:
👉 https://pwwpw.in/government-schemes-and-subsidies-for-student-loans-in-india
🌍 Interest Rates for Overseas Education Loans
Loans for studying abroad usually have slightly higher interest rates due to:
- Increased risk to lenders
- Foreign exchange risks
- Longer courses
| Bank/NBFC | Interest Rate for Study Abroad |
|---|---|
| SBI Global Ed-Vantage | 8.15% – 10.25% (floating) |
| HDFC Credila | 11.50% – 13.00% (customized) |
| Axis Bank | 11.25% – 13.50% |
| ICICI Bank | 11.00% – 12.75% |
Explore your options:
👉 https://pwwpw.in/education-loans-for-studying-abroad
📉 Fixed vs Floating Interest Rates: Which is Better?
| Type | Pros | Cons |
|---|---|---|
| Fixed | Predictable EMIs | Usually higher than floating |
| Floating | Lower starting rate, may drop | Uncertain future payments |
🔎 Our Take: Choose floating rates with a strong co-applicant and secure university admission — most banks offer better terms this way.
🔐 Interest Rates with & without Collateral
Without Collateral:
- Typically higher interest: 11% – 13.5%
- Offered by NBFCs or private banks
- Based on co-borrower’s income & student’s merit
👉 Guide here:
https://pwwpw.in/how-to-get-a-student-loan-without-collateral-in-india
With Collateral:
- Lower interest: 8% – 10.5%
- Mostly from public sector banks
- Ideal for higher loan amounts (₹7.5 lakh+)
🧠 Tips to Secure the Lowest Possible Rate
✅ Apply to public banks first (SBI, BoB, PNB)
✅ Maintain a good CIBIL score for you or co-borrower
✅ Provide collateral, if possible
✅ Apply via Vidya Lakshmi Portal to compare offers
✅ Avail interest subsidy if eligible
For application steps:
👉 https://pwwpw.in/step-by-step-guide-to-applying-for-an-education-loan-in-india
💰 Final Thoughts: Choose Smart, Save Big
Interest rates may look like a minor number — but over the life of a loan, they become the biggest cost. Always compare offers across multiple banks, ask for concessions, and try to negotiate with collateral or merit-based reductions.
Even saving 0.5% on your loan can reduce your burden significantly.
✅ Useful Resources
- Compare Banks: https://pwwpw.in/top-banks-offering-education-loans-in-india-for-2025
- Apply Online: https://www.vidyalakshmi.co.in
- Learn Subsidy Details: https://pwwpw.in/government-schemes-and-subsidies-for-student-loans-in-india
