The State Bank of India (SBI) is planning to slash educational loan rates by 0.25 percent, a big relief for students and parents both who largely depends on borrowing loans especialy when higher education comes into question. SBI will announce the plan sometime this week. An SBI official told in Mumbai that students who take loan from 1st May to 30th Sep wil get this benefit.
"The idea is to help students aspiring for higher studies with adequate financial support. Interest rates on all category of education loans are likely to come down by 0.25 per cent. The scheme will be applicable for all education loans approved during May-September, 2009," the official said.
The new scheme wil help both students and institute as with the reduced rates more student will be interested in pursuing higher education.
At present the lending rate of SBI ranges from 11.75 per cent to 13.25 per cent.
In new scheme female student belonging to any category shall provided education loan at 0.5 percent.
Education loan upto 4lakh do not require any collateral security. The student who borrow between 4 to 7.5 lakh require funsishing third party guarantee. For education loans above Rs 7.5 lakh and up to Rs 20 lakh, borrowers must have to produce some tangible assets like a house or land as security.
The loan re-payment period ranges from five to seven years.