- Our Services
- Tools
- Resources
- Loans
- Contact
Education Loan In India
Low Interest Rates- Quick Approval Process
- Flexible Repayment Options
- Covers Different Options
The cost of education is increasing rapidly, and if you want to pursue higher education, you will have to spend a lot. This is why most of the students take education loans to ease the burden. Most aspiring students in India take out loans to fulfill their academic ambitions. If you are also an aspiring student looking to take a loan in India, there are many things that need to be considered. In this blog, I am going to talk about everything you need to know about taking an education loan in India.
Why Do You Need An Education Loan?
In India, most students desire to pursue their higher studies in a prestigious college, but because of a financial crunch, they are forced to settle for something less. Here, the education loan helps students by reducing that heavy financial burden on their heads. Below you can read the benefits of taking an education loan in India:
Affordable Interest Rates
Education loans in India tend to have lower interest rates compared to other loans, so they"re a great deal cheaper for students and their families.
Benefits in Taxes
Indian students who avail of education loans are entitled to tax relief under the Income Tax Act. This decreases the cost of the loan and facilitates repayment for the student.
All Expenses Coverage
There are many loan options that not only cover the tuition fees but other expenses as well such as living, study material, and travel expenses. So, this can be very helpful for the students who can not afford these expenses themselves.
Helps Build Credit
One more advantage that not many people know is that if you pay, you repay your education loan on time, which will increase your credit score.
Longer Repayment Tenure
Education loans generally have a long repayment period so that students can build their careers and repay the loan in small amounts.
Helps Build Credit
One more advantage that not many people know is that if you pay, you repay your education loan on time, which will increase your credit score.
Longer Repayment Tenure
Education loans generally have a long repayment period so that students can build their careers and repay the loan in small amounts.
Affordable Interest Rates
Education loans in India tend to have lower interest rates compared to other loans, so they"re a great deal cheaper for students and their families.
Benefits in Taxes
Indian students who avail of education loans are entitled to tax relief under the Income Tax Act. This decreases the cost of the loan and facilitates repayment for the student.
All Expenses Coverage
There are many loan options that not only cover the tuition fees but other expenses as well such as living, study material, and travel expenses. So, this can be very helpful for the students who can not afford these expenses themselves.
Helps Build Credit
One more advantage that not many people know is that if you pay, you repay your education loan on time, which will increase your credit score.
Longer Repayment Tenure
Education loans generally have a long repayment period so that students can build their careers and repay the loan in small amounts.
Affordable Interest Rates
Education loans in India tend to have lower interest rates compared to other loans, so they"re a great deal cheaper for students and their families.
Benefits in Taxes
Indian students who avail of education loans are entitled to tax relief under the Income Tax Act. This decreases the cost of the loan and facilitates repayment for the student.
Expenses Covered In A Student Loan In India
Below is a list of the major expenses that are generally financed by an education loan:
Tuition Fee
This covers the tuition fees charged by the educational institution for the chosen course or program.
Examination Fee
This cover any fees charged by the educational institution for exams, projects, or assignments.
Travel Expenses
This covers all travel expenses to and from the educational institution, including airfare, train fares, and bus tickets.
Study Materials
This covers the cost of books and other essential materials needed for the course or program.
Insurance
This cover any insurance premiums mandated by the educational institution, such as health or accident insurance.
Accommodation
This covers any accommodation fees charged by the education institution for a hostel or dormitory.
Insurance
This cover any insurance premiums mandated by the educational institution, such as health or accident insurance.
Accommodation
This covers any accommodation fees charged by the education institution for a hostel or dormitory.
Tuition Fee
This covers the tuition fees charged by the educational institution for the chosen course or program.
Examination Fee
This cover any fees charged by the educational institution for exams, projects, or assignments.
Travel Expenses
This covers all travel expenses to and from the educational institution, including airfare, train fares, and bus tickets.
Study Materials
This covers the cost of books and other essential materials needed for the course or program.
Insurance
This cover any insurance premiums mandated by the educational institution, such as health or accident insurance.
Accommodation
This covers any accommodation fees charged by the education institution for a hostel or dormitory.
Tuition Fee
This covers the tuition fees charged by the educational institution for the chosen course or program.
Examination Fee
This cover any fees charged by the educational institution for exams, projects, or assignments.
Please note that different loan options have different expenses covered. Not all education loans will cover all the expenses in one. Some cover only the tuition fees and some mix of it. It is wise to take the loan that meets your requirements.
Type Of Education Loan
Education loans are divided into two main categories:
Unsecured Or Collateral - Free Education Loan
Under this education loan, the student is able to avail of an education loan without providing any security or collateral.
Here is what a Collateral free loan is in simple terms
- Students can get the loan without pledging any assets
- Sanction depends on academic record, course, and institute
Secured Or Collateralized Education Loan
Under this, collateral is demanded from the borrower, such as land or a house, in exchange for the loan amount
Here are some basic examples of collateral
- Immovable property: House, flat, or non-agricultural land.
- Liquid security: Fixed deposits, Insurance policies (term insurance), or Government bonds
Comparison Between Secured And Unsecured Education Loans
Let's see what the main differences are between these two categories through the table below:
| Feature | Collateral Education Loan | Collateral - Free Education Loan |
|---|---|---|
| Loan Amount | Typically higher, ranging from ₹7.5 lakh to ₹150 lakh or more, depending on the bank and course. | Generally lower, up to ₹7.5 lakh for public banks and up to ₹40 lakh for private banks. |
| Interest Rates | Usually lower due to reduced risk for lenders; rates can vary based on collateral value. | Higher interest rates, typically between 10-18%, depending on the lender. |
| Eligibility Criteria | Requires tangible assets such as property, fixed deposits, or other securities as collateral. | No collateral required; eligibility based on academic performance and admission to recognized institutions. |
| Processing Fees | May have lower or no processing fees in some cases. | Public sector banks often do not charge processing fees; private banks may charge up to 1%. |
| Repayment Periods | Longer repayment tenure, often up to 15 years or more, depending on the loan amount and terms. | Similar repayment period, usually up to 10-15 years, starting after a moratorium period. |
| Security Requirements | Requires full collateral coverage, which must be in the name of the borrower or co-borrower. | No security required; however, some banks may ask for a personal guarantee from parents or guardians. |
| Loan Disbursement | Disbursement may be staggered based on course requirements and collateral evaluation. | Typically disbursed in full or in installments based on tuition fee requirements without collateral checks. |
| Documentation Required | Extensive documentation including proof of ownership for collateral and valuation reports. | Minimal documentation required; mainly academic records, admission proof, and family income proof. |
Student Loan In India: Type Of Lenders
As an Indian student trying to get financial assistance, you will come across two types of lenders for your loan.
Banks
The first category is banks, which includes public sector and private sector banks. The first choice for Indian students is public sector banks because they charge lower interest rates and are backed by the government. .
NBFC’s
There are NBFCs, and these are popular for education loans. The reason is that NBFCs usually have less complex terms and, in most cases, do not require any collateral. So, if you are looking for a study loan in India but do not have collateral, NBFCs could be the feasible option.
Documents Required For An Student Loan in India
You will need a long list of documents to get your education loan approved. The table below has the list of documents required to take an education loan in India for both applicants and co-applicants:
| Document Type | Applicant (student) | Co-Applicant |
|---|---|---|
| Proof Of Identity |
|
|
| Proof Of Address |
|
|
| Photographs |
|
|
| Academic Records |
|
|
| Cost Of Education |
|
|
| Income Proof |
|
|
| Affidavit/Declaration |
|
|
| Property Documents (if collateral loan) |
|
|
Who Is A Co-applicant?
Let’s break this down in simple words. A co-applicant, in the context of an education loan, is an individual who signs the loan document along with the main borrower, most commonly the student. He or she is responsible jointly for loan repayment and is bound legally to repay the loan in case the main borrower defaults.
What Important Terms Do You Need To Remember While Taking An Domestic Education Loan?
But when you are in the stage of comparing your education loan options available from different lenders, you will need to remember some basic terms. Here is the table:
| Terms | Detail |
|---|---|
| Principle Amount | The total amount of money borrowed from the lender, on which interest is calculated. |
| Interest Rate | The cost of borrowing, expressed as a percentage (fixed or floating). |
| Repayment Tenure | The duration over which the borrower must repay the loan typically ranges from 5 to 15 years. |
| Margin Money | The borrowers contribution to total education costs; lenders cover the rest. |
| Prepayment Penalty | A fee that is charged by lenders if a borrower pays off their loan earlier than scheduled. This may vary by lender and should be clarified before signing any agreement. |
| Grace Period | Time after course completion to start repayments (usually 6 months). |
Best Education Loan in India 2025
When it comes to taking a loan for higher studies in India, there are some popular and reliable lenders that have helped many students. In the sections below I have discussed the best from each category.
Public Sector Banks
| Name of the Bank | Interest Rate (p.a.) | Processing Fees |
|---|---|---|
| State Bank of India | 8.65% to 11.75% |
|
| Union Bank of India | Need-based finance to meet the expenses will be considered taking into account margin norms |
|
| Bank of Baroda | Starting from 9.70% |
|
| Punjab National Bank | From 8.15% |
|
Private Sector Banks
| Name of the Bank | Interest Rate (p.a.) | Processing Fees |
|---|---|---|
| IDFC First Bank | Starting from 11.00% |
|
| HDFC Bank | Starting from 9.50% to 14.25% |
|
| Axis Bank | Starting from 10.30% |
|
| ICICI Bank | Starting from Repo + 3.75% |
|
NBFCs
| Name of the Bank | Interest Rate (p.a.) | Processing Fees |
|---|---|---|
| Credila | Starting from 10.25% to 14% |
|
| Avanse Financial Services | Starting from 10.50% to 15% |
|
| Auxilo | Starting from 10.75% |
|
How To Apply For An Education Loan In India
Here’s how to apply for an education loan in India:
Research And Choose A Lender
Compare interest rates, eligibility, and terms from various banks and NBFCs.
Check Eligibility
Ensure you meet criteria (Indian citizen, age, academic qualification, and admission to a recognized institution.
Fill The Application
Obtain and complete the application form online or at the bank branch.
Necessary Documents
Obtain and complete the application form online or at the bank branch.
Loan Disbursement
Wait for loan approval after document verification; a co-borrower/ guarant or is usually required
Compare Interest from 15+ Lenders
view more....
Abroad Education Loan
Need a loan before getting an admission letter? We will get you the best deals.
Travel Insurance
Insure your travel journey with Insurance with minimum charges
Health Insurance
Use your education loan sanction letter as proof of funds for visa applications.
FamousCountries For Abroad Studies
Ready To Apply?
Start Your Loan Journey Today
Use our Loan Offer Comparison Tool to find the best education loan for your future.
Frequently AskedQuestions
Which loan type is better?−
Is education loan interest free?−
Who will pay education loan?−
Can I get a 25 lakhs education loan without property?−
What is domestic loan?−
Can I repay an education loan early?−
Is hostel fee included in education loan?−
Is parents' CIBIL required for an education loan?−
Know more about our loan options. Book a free counselling session
Company
About Us
Refer & Earn
Career
Services
Abroad Education Loan
Scholarships
Domestic Education Loan
Credit Card
Forex Card
Health Insurance
Travel Insurance
Sim Card
Refinancing
GIC
Block Account
Bank Account
Resources
Blog
Webinars
Offline Events
Academic Tools
GPA Calculator
SOP Generator
Loan Tools
Education Loan Eligibility Checker
Education Loan EMI Calculator
Interest Calculator
Loan Repayment Calculator
Bank Comparison Tool
Compare Loan Offers
Travel & Insurance Tools
Student Packing List
Health Insurance Compare
Financial Planning Tools
Cost of Studying Abroad
Living Calculator
ROI Calculator
Estimate Future Earnings
Utilities Tools
Currency Converter
Time Zone Converter
Weather Abroad
Budget Calculator
Company
About Us
Refer & Earn
Career
Services
Abroad Education Loan
Scholarships
Domestic Education Loan
Credit Card
Forex Card
Health Insurance
Travel Insurance
Sim Card
Refinancing
GIC
Block Account
Bank Account
Resources
Blog
Webinars
Offline Events
Academic Tools
GPA Calculator
SOP Generator
Loan Tools
Education Loan Eligibility Checker
Education Loan EMI Calculator
Interest Calculator
Loan Repayment Calculator
Bank Comparison Tool
Compare Loan Offers
Travel & Insurance Tools
Student Packing List
Health Insurance Compare
Financial Planning Tools
Cost of Studying Abroad
Living Calculator
ROI Calculator
Estimate Future Earnings
Utilities Tools
Currency Converter
Time Zone Converter
Weather Abroad
Budget Calculator
Our Loan Partners
Avanse Education Loan
Incred Education Loan
HDFC Credila Education Loan
Auxilo Education Loan
ICICI Bank Study Abroad Loan
Prodigy Finance Education Loan
IDFC Education Loan
Union Bank Of India Education Loan
Top Scholarships
Chevening Scholarship
Erasmus Mundus Scholarship
Rhode Scholarships
Inlaks Scholarship
DAAD Scholarships Germany
JN Tata Endowment Scholarship
Gates Cambridge Scholarship
Narotam Sekhsaria Scholarship
Felix Scholarship
Aga Khan Foundation Scholarship
Fulbright Scholarship
Top Dream Destinations
US Student Loans
Student Loan UK
Student Loan Germany
Student Loan Australia
Student Loan France
Education Loan for Ireland
Student Loan Canada
Education Loan New Zealand
Gurugram, Haryana
F12/8A, Golf Course Rd, DLF Phase 1, Sector 27, Gurugram, Haryana 122009
New Delhi, Delhi
55, Lane-2, Westend Marg, Saket, New Delhi, Delhi 110030
Fatehabad, Haryana
Near ICICI Bank, Chandigarh Road Tohana Distt. Fatehabad, Haryana 125120
Chandigarh, Punjab
SCO 436, Jubilee Walk, Sector 70, Mohali, Punjab 160071
Terms & Conditions
Privacy Policy
©2025, All Rights Reserved
