New Delhi: The State Bank of India (SBI), country's largest public sector bank, has announced reduction in the interest rates on education loans.

Under the new norms, the interest rates have been divided according to 3 slabs: for loan amounts less than Rs.4 lakh, interest rates have been reduced from 12.25 percent to 11.75 percent and interest rates for loan amounts above Rs.7.50 lakhs have been reduced from 13.25 percent to 12.25 percent.

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Loan amounts between Rs.4 lakhs and Rs.7.5 lakhs will bear the same interest rate of 13.25 percent.

"We have been the leader in the educational loan space. We offer a special lower interest rate of 11.25 percent for IIT and IIM students. If a need arises, we may look into further reducing our interest rates", said Mr. M.P. Murugan from Allahabad Bank.

The move is, however, good news for students across the country who feel that lower interest rates on education loans will help them realize their dreams.

A student from Mumbai said, "My brother and I are planning to opt for professional courses this year. Even a small decrease in the interest rates on loans will make a lot of difference. We would rather go to a bank that offers lower interest rates on education loans."