SBI cuts interest rate on education loans

State Bank of India (SBI), the country's largest lender, has lowered interest rates on education loan for higher so as to give a relief to the students aspiring to pursue higher studies.

SBI today said it has lowered interest rates on education loans, which are linked to the bank's prime lending rate (PLR), by up to 25 basis points, for a limited period.

Interest rates on education loans of up to Rs4 lakh will be reduced from 11.75 per cent to 11.5 per cent while for the Rs4-7.50 lakh loan bracket, the interest has been slashed from 13.25 per cent to 11.25 per cent, SBI said in a statement.

SBI has fixed its prime lending rate at 12.25 per cent per annum.

For loans of Rs7.5-lakh and above, interest rate has been reduced by 1.25 per cent, from 12.25 per cent to 11 per cent. Girl students will get a further concession of 0.50 per cent in interest, SBI said.

The lowered rates would be applicable for loans sanctioned during May-September 2009, while for existing loans, the extant rates would continue, the release said.

SBI extends loans up to Rs10 lakh for studies in India and up to Rs20 lakh for studies abroad. During moratorium/repayment holiday, simple interest rate is charged.