Education Loan 2025: Top Banks Offering the Lowest Interest Rates for Students

Pursuing higher education, whether in India or abroad, has become increasingly expensive. Rising tuition fees, accommodation costs, and additional expenses often create financial pressure for students and their families. In such situations, education loans act as a reliable financial support system. However, selecting the right bank and the right loan scheme is crucial to ensure affordability and stress-free repayment.

If you are planning to apply for an education loan in 2025, here is a list of leading government and private sector banks currently offering the lowest interest rates on education loans in India.

1. Union Bank of India

• Starting Interest Rate: 8.25%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹48,507

Union Bank of India currently offers the most affordable education loan option. With one of the lowest starting interest rates in the market, it is highly beneficial for students looking for long-term repayment flexibility.

2. Punjab National Bank (PNB)

• Starting Interest Rate: 8.35%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹48,798

PNB provides competitive interest rates and has specialized loan schemes for students enrolled in top-ranking institutions. This makes it an attractive choice for meritorious students.

3. State Bank of India (SBI)

• Starting Interest Rate: 8.65%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹49,678

SBI, India’s largest public sector bank, covers tuition fees, living expenses, and other educational costs. Its wide reach and student-friendly repayment options make it a preferred choice for many.

4. Bank of Baroda

• Starting Interest Rate: 8.70%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹49,825

Bank of Baroda offers comprehensive education loan coverage with convenient repayment terms. It is suitable for students who need both tuition and miscellaneous academic expenses financed.

5. IDBI Bank

• Starting Interest Rate: 9.30%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹51,610

Though the interest rate is slightly higher compared to PSU banks, IDBI Bank’s education loan covers a wide range of expenses and offers flexible repayment structures.

6. Central Bank of India

• Starting Interest Rate: 9.45%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹52,060

Central Bank’s education loan helps students cover tuition, hostel charges, and other academic expenses. It is especially helpful for students studying outside their hometowns.

7. Canara Bank

• Starting Interest Rate: 9.50%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹52,211

Canara Bank finances both tuition and essential academic costs, making it a comprehensive option for students pursuing higher education in India and abroad.

8. IDFC First Bank

• Starting Interest Rate: 9.50%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹52,211

As a private sector bank, IDFC First Bank offers tailored education loan solutions with long-term repayment plans, making it convenient for families looking for flexible financial options.

9. ICICI Bank

• Starting Interest Rate: 10.25%

• Loan Amount: Up to ₹50 lakh

• Repayment Tenure: 15 years

• Approximate EMI: ₹54,498

ICICI Bank’s education loan has a comparatively higher interest rate but provides strong support for international education, covering tuition, accommodation, and travel expenses.

Tips for Choosing the Right Education Loan

Before finalizing an education loan, students and parents should carefully review factors such as:

• Processing fees charged by banks.

• Repayment terms including moratorium periods.

• Special schemes for top universities or professional courses.

• Prepayment and foreclosure charges.

Choosing the right loan not only reduces financial burden but also ensures smooth academic progress without unnecessary stress.

Final Word

Education is an investment for the future, and selecting the right education loan plays a key role in making that investment successful. Among all the banks, Union Bank of India and Punjab National Bank currently stand out for offering the lowest interest rates. Students aiming for higher education in India or abroad should compare loan schemes carefully and pick the one that best suits their academic and financial needs.