Education costs in India and abroad have increased significantly in recent years. Whether you are planning to study engineering, MBA, medical, or overseas courses, understanding education loan interest rates in India in 2026 is extremely important before applying.
In this detailed guide, you will learn:
- Latest education loan interest rates (bank-wise comparison)
- Public vs private bank interest rate difference
- Study abroad loan interest rates
- How to get lowest student loan interest rate
- EMI example calculation
- FAQs students search on Google
What Is Education Loan Interest Rate?
An education loan interest rate is the percentage charged by a bank or financial institution on the amount borrowed for higher studies.
In India, most banks offer:
- Floating interest rate (linked to repo rate or benchmark lending rate)
- Limited fixed rate options
The interest rate directly impacts your EMI (Equated Monthly Installment) and total repayment amount.
Latest Education Loan Interest Rates in India 2026 (Bank-Wise)
Below is the updated comparison of major Indian banks offering student loans in 2026.
| Bank Name | Interest Rate (2026) | Loan Type | Collateral Required | Processing Fee |
|---|---|---|---|---|
| State Bank of India (SBI) | 7.25% – 11.60% p.a. | India & Abroad | Optional above certain limit | Low / Nil |
| Punjab National Bank (PNB) | 8.50% – 10.50% p.a. | India & Abroad | Required for high amount | Minimal |
| Bank of Baroda | 8.70% – 11.50% p.a. | Abroad Focus | Yes (above limit) | Applicable |
| ICICI Bank | 8.99% – 13.75% p.a. | Fast Approval | Often unsecured options | Applicable |
| Axis Bank | 10.90% – 15.20% p.a. | Study Abroad | Flexible | Applicable |
| Kotak Mahindra Bank | Up to 16% p.a. | Select Courses | Case-based | Applicable |
| NBFCs | 10% – 16%+ p.a. | Quick Disbursal | Flexible | Higher |
⚠️ Interest rates may vary based on credit profile, course, institution ranking, and RBI policy changes.
Public vs Private Bank Education Loan Interest Rates
Public Sector Banks
- Lower starting interest rates (7%–9%)
- Government-backed credibility
- Strict documentation
- Lower processing charges
Private Banks & NBFCs
- Faster approval
- Higher interest rates (9%–16%)
- More flexible eligibility
- Higher processing fees
If your goal is the lowest education loan interest rate in India 2026, public sector banks are generally better.
Education Loan Interest Rate for Study Abroad 2026
Students going to USA, UK, Canada, Australia or Europe often get slightly higher rates compared to domestic education loans.
Typical abroad loan interest range:
- Secured loan: 8% – 11%
- Unsecured loan: 10% – 15%
Top-ranked universities and strong co-applicant income can reduce rates.
Education Loan EMI Example (₹10 Lakh Loan)
Let’s understand how interest affects repayment:
Loan Amount: ₹10,00,000
Tenure: 10 Years
| Interest Rate | Approx EMI | Total Repayment |
|---|---|---|
| 8% | ~₹12,133 | ~₹14.5 Lakh |
| 10% | ~₹13,215 | ~₹15.8 Lakh |
| 12% | ~₹14,347 | ~₹17.2 Lakh |
👉 Just a 4% increase can raise repayment by nearly ₹3 lakh.
That’s why comparing student loan interest rates is very important.
Factors That Affect Education Loan Interest Rate in India
Banks decide your rate based on:
- Loan amount
- Collateral/security provided
- Course type (MBA, Medical, Engineering, etc.)
- Institution ranking
- Co-applicant income
- Credit score (CIBIL score)
- Study destination
How to Get Lowest Education Loan Interest Rate in 2026
Here are proven strategies:
✅ Choose Secured Loan
Providing property or FD as collateral reduces risk and interest rate.
✅ Apply with Strong Co-Applicant
A salaried parent with stable income improves approval chances.
✅ Maintain Good CIBIL Score
Higher credit score = lower interest.
✅ Compare Multiple Banks
Never apply blindly. Compare at least 3–4 lenders.
✅ Check Girl Student Concession
Many banks offer 0.50% interest concession for female students.
Moratorium Period in Education Loan
Most Indian banks provide:
- Course duration + 6 to 12 months
- During this period, EMI is not mandatory
- Simple interest may apply
Always confirm whether interest during study is simple or compounded.
Frequently Asked Questions (SEO FAQ Section)
What is the lowest education loan interest rate in India in 2026?
Public sector banks like SBI start from around 7.25% per annum, depending on eligibility.
Is education loan interest fixed or floating?
Most banks offer floating interest rates linked to benchmark rates.
Which bank is best for education loan in India?
Public sector banks usually offer lower rates, while private banks provide faster processing.
Can I get education loan without collateral?
Yes, but usually for smaller amounts and at slightly higher interest rates.
Is education loan interest tax deductible?
Yes, under Section 80E of Income Tax Act, interest paid on education loan is tax deductible.
Final Words
Education loan interest rates in India in 2026 range between 7% and 16% per annum, depending on bank, course, and borrower profile. Even a small difference in rate can significantly impact your long-term financial burden.
Before applying:
- Compare banks
- Check EMI
- Understand moratorium rules
- Review total repayment cost
A well-planned student loan can make higher education affordable without future financial stress.
Disclaimer:
Interest rates mentioned in this article are indicative and may vary based on bank policies, RBI regulations, applicant profile, loan amount, and course type. Readers are advised to verify the latest education loan interest rates directly with the respective bank before applying. This content is for informational purposes only and does not constitute financial advice.