Enjoy lowest rates on education loans starting at 6.75 percent

Bank of Baroda continues to top the list of cheapest education loan lenders with interest rate as low as 6.75 percent. It is closely followed by Union Bank of India and Central Bank of India, at 6.8 percent and 6.85 percent respectively, as per data from Bankbaazaar.

Besides being a cheap source of funding for higher studies in India and abroad, education loans also offer tax benefits under section 80E. Higher studies in this case also encompasses vocational training courses pursued after the completion of secondary school certificate (SSC) or equivalent examinations. The entire interest paid on the loan is eligible for deduction for up to eight years or till the completion of repayment, whichever is earlier. You can avail of the tax relief if you have taken an education loan for yourself, your spouse or children. Unlike home loans, the principal component of the EMI will earn you no tax deductions.