SBI reduces interest on education loans by up to 2.5 pc

MUMBAI: The country's largest lender, State Bank of India on Tuesday said that it has lowered interest rates on education loans by up to 250 basis points, for a limited period.

Interest rates on educations loans, which are linked to the bank's prime lending rate (PLR), up to Rs 4 lakh will be reduced to 11.5 per cent from 11.75 per cent, SBI said in statement while for the Rs 4 lakh-Rs 7.50 lakh loan bracket, the interest has been slashed to 11.25 per cent from 13.25 per cent, SBI said in a statement today.

At present, SBI's PLR stands at 12.25 per cent per annum. For loans of Rs 7.5-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, the statement 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 Rs 10 lakh for studies in India and Rs 20 lakh for abroad. During moratorium/repayment holiday, simple interest rate is charged.

A further concession of one per cent in interest rate is given for promptly servicing the interest during moratorium/repayment holiday. A repayment period of 5-7 years is given after moratorium, the bank said.