Education and Career Forum

Dear Friends,
I have taken an Education Loan of Rs. 9.5 Lacs for my daughter to study Abroad from Andhra Bank. While signing the documents we were asked to get an Education Loan on Fixed Rate or Floating Rate. We were accepted Fixed rates. But the interest rates is becoming higher day by day. I don't know why. I have discussed this issue with the Branch Manager. But I couldn't understand his words. Kindly help me.

There is no such clause as fixed interest in the education loan. Even though you chose fixed interest rate, there will be a certain portion of the interest rate which will be fluctuating. Hence your interest rates are fluctuating. This is because in the fixed rate of interest, the bank assures you of a certain rate of interest irrespective of bank's performance and policies. However, there is a certain percentage in that interest rate which is governed by Reserve Bank of India and this fluctuates from time to time as per market's conditions and Indian economy. If this increases, the interest rate is bound to increase and you need to comply with the higher interest rate.