Banks Cut Interest Rates on Education and Home Loans

The country’s largest lender, State Bank of India (SBI) has decided to cut interest rates on education loans by up to 1 percent on Monday 20th February. The interest rates are then reduced by 0.25 percent to 11.25 percent for loans up to Rs.4 lakh. While for loans ranging from Rs.4 lakh to 7.5 lakh, the interest rate is likely to be cut by 1 percent to 12.50 percent. However, loans above Rs.7.5 lakh, the interest rates are reduced by 0.5 percent to 12.25 percent.

The bank is also offering a special concession for female students by reducing the interest rate by 0.5 percent on educational loans. An official of the bank states that, the lender’s base rate stands at 10 percent as of now, which is the lowest rate in the country. The chairman of SBI stated that the bank may have an Alco meeting and will have education loan rate cut at top of the Agenda.

While SBI has taken leading role in cutting interest rates on education loans, Central Bank of India was the first to lower home loan rates and Bank of Maharashtra has lowered base rate on home loans. These two banks have cut interest rates on home loans by 0.25 percent. The Central Bank of India, has decided to offer interest rate of 10.75 percent for loans up to 25 years and under Rs.30 lakh. Bank of Maharashtra also announced a similar reduction in its interest rates for home loans under Rs.25 lakh up for five-year tenure at their reduced base rate of 10.60 percent