The published rate on an education loan matters less than what happens during the moratorium. Interest accrues through the study period, and where it is capitalised at the end, you begin repaying a principal larger than you borrowed.
| Education loan rate range | 8 – 15 % p.a. |
|---|---|
| What it means | Concessions of 0.5% for female students are common at PSU banks. |
as of 2026-08-15 · Lender rate cards · reported
What to know
Ask one question at sanction: is moratorium interest simple or capitalised? On a four-year course with a ₹20 lakh loan, the difference between servicing interest as it accrues and having it capitalised runs into several lakh rupees over the life of the loan. Many banks offer a rate concession of around 1% for servicing interest during the moratorium, which stacks on top of the direct saving. Put both versions of the repayment through the EMI calculator before you sign, because the moratorium decision is worth more than the difference between two lenders’ advertised rates.
Which lender you approach first depends on the amount. Below the collateral threshold the field is wider than most applicants realise — see collateral-free education loans — and above it the ranked comparison sits at best education loans. A course overseas is priced and secured differently again, which is covered in education loans for studying abroad.
Concessions for female students — commonly around half a percentage point at public sector banks — are standard but not always applied automatically. Ask.
Frequently asked questions
Is education loan interest charged during the course?
Yes. Interest accrues from disbursal. What varies is whether you must pay it during the moratorium or whether it is added to the principal at the end. Servicing it during study is substantially cheaper and often earns a rate concession as well.
Do female students get a lower education loan rate?
Public sector banks commonly offer a concession of around 0.5% for female students. It is standard but not always applied automatically — ask for it explicitly at sanction.
Is there an interest subsidy on education loans?
Central interest subvention schemes exist for eligible students within defined income limits, and are administered through the participating banks and the Vidya Lakshmi portal. Terms are revised by notification, so check the current scheme details on the official portal. Separately, the interest you pay is deductible in full under Section 80E for eight years — the conditions are set out in education loan tax benefits.
Sources
- Ministry of Education / NSDL — Vidya Lakshmi — central education loan portal (primary source)
- Lender published rate cards — Home, personal, vehicle and education loan rate cards — August 2026 — as of 2026-08-15
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