Education Loan Interest Rates 2026 — Bank-wise Comparison (SBI, PNB, BoB & More)

Education loan interest rates — bank-wise (2026)

Public-sector banks generally offer the lowest education loan rates because they follow the RBI-linked benchmark and government-backed lending norms. Private banks and NBFCs price higher but often approve faster and lend larger unsecured amounts. The rates below are indicative starting rates for 2026:

Why premier-institute schemes are the cheapest

Every big public-sector bank runs a special low-rate scheme for students admitted to top institutes — SBI's Scholar Loan (6.90%–7.65%), Bank of Baroda's Baroda Scholar, and similar. Because these students are seen as low-risk, the loans are often collateral-free at higher amounts and priced 1.5–2.5 percentage points below the standard student-loan rate. If you have a seat at an IIT, IIM, NIT, IIIT or other listed institute, always ask specifically for the institute-linked scheme.

The government's PM Vidyalaxmi scheme goes further for students at the top ~860 institutions — collateral-free, guarantor-free loans with a 3% interest subvention for lower-income families.

Fixed vs floating and the repo-rate link

Almost all bank education loans today are floating-rate, pegged to the bank's External Benchmark Lending Rate (EBLR), which is the RBI repo rate plus a spread. When the RBI cuts or raises the repo rate, your rate — and your EMI or tenure — moves with it. A few NBFCs offer fixed-rate loans, which cost more up front but shield you from rate rises. Model both on our education loan EMI calculator.

How to get a lower rate

• Ask for the premier-institute scheme if you're admitted to a listed institute — it's the single biggest rate cut available.
• Claim the 0.50% girl-student concession — offered by SBI and most public banks.
• Offer collateral — a secured loan is usually cheaper than an unsecured one for the same amount.
• Strengthen the co-applicant — a parent/guardian with a good CIBIL score and steady income lowers the risk-based rate.
• Service the interest during study — many banks give a small rebate (often 0.5–1%) if you pay the simple interest during the moratorium.

Remember the interest during the moratorium

Education loans have a moratorium (repayment holiday) of the course period plus up to one year. Interest still accrues in this window, so the amount you finally repay is larger than the amount disbursed. A stable government job — say SSC CGL or a bank PO role — makes the post-study EMIs comfortable. Use the EMI calculator with the moratorium option to see the real cost before you sign.