Nov 4 2009

Education Loans will be cheaper from next year

O-071-0249Education loans above Rs.4 lacs will have the low interest rate compare to the present interest rates in the market. RBI is working with the few of the major indian banks to reduce the interest rates for the education loans.

It is recommending the banks to reduce the benchmark prime lending rate (BPLR) with a base rate, senior officials of at least two major public sector banks said. The RBI working group has recommended that the interest rate on education loans should be the average of base rates of five largest banks plus 200 basis points.

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Under the proposed methodology, loans above Rs. 4 lakh will be available at 8.55 per cent plus a maximum of 200 basis points against the existing rate of 12-13 per cent with five largest public sector banks having their BPLRs in the range of 11-12 per cent.

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