Make college memories that last a lot longer than your student loan payments.

Education Loan

Education loan is offered by leading banks in India to help students achieve their academic dreams. Education loan Interest rates start from 7.30% p.a. with loan tenures of up to 15 years. Education loans are offered for higher education in both India and abroad.

What courses are eligible for an education loan will be decided by the lender. You can get an education loan for studies starting from Nursery. For higher studies, you can get a loan for full-time as well as part-time courses, and loans for working professionals.

Compare Top Education Loan Offers 2021

Education Loan Schemes Interest Rate Loan Amount Processing Fees
PNB 7.30% onwards Up to 15 Lakhs 1% of loan amount
SBI 7.97% p.a. - 10.05% p.a. Above Rs. 20 Lakh Rs.10,000 + tax
Axis 13.70% to 15.20% Up to 7.5 Lakh Nil to Rs.15,000 + tax
Bank of Baroda 8.25% to 10%* Up to 4 Lakh and above 1% of loan amount up to Rs.10,000
HDFC For preferential rates contact HDFC Max Apr Up to 1.5% of loan amount + tax
Tata Capital 10.99% onwards Up to 30 Lakh Up to 2.75% of loan amount + tax
Union Bank of India 6.90% onwards Need-based finance Nil for Indian students 0.50% of loan amount + GST for NRI students
Bank of India 9.10% onwards For courses in India: Up to Rs.10 lakh For courses abroad: Up to Rs.20 lakh Nil for courses in India Rs.5,000 + other fees for study abroad
Kotak Mahindra Bank Up to 16% For courses in India: Up to Rs.10 lakh For courses abroad: Up to Rs.20 lakh Contact the bank
ICICI Bank Contact the bank For courses in India: Up to Rs.50 lakh For courses abroad: Up to Rs.1 crore Contact the bank
Federal Bank 10.05% onwards For courses in India: Up to Rs.10 lakh For courses abroad: Up to Rs.20 lakh Contact the bank

Depending on the bank or financial institution, you could get a fixed interest rate package or a floating interest rate one. Floating rates are most likely based on the Repo Rate, and a spread may be added to it before offering you the final effective interest rate (EIR).

Types of Taxes
Education Loan

1. Punjab National Bank Education Loan

  • Maximum Loan Amount: Need Based
  • Maximum Loan Tenure: 15 Years
  • Collateral: Nill Up to Rs.7.5 lakh
  • Margin: Nill Up to Rs.4 lakh
  • Offers loans to Indian residents and OCIs/PIOs/students born abroad to Indian parents and want to pursue studies in India.
  • Security will be 125% of loan amount.
  • Moratorium period of 6 months to 1 year after course completion.

2. SBI Education Loan

  • Loan amount up to Rs.20 lakh with concessional rates for female students.
  • Max Loan Tenure: 15 Years
  • Collateral: Nil upto Rs. 7.5 lakh
  • Margin: Nill Up to Rs.4 lakh
  • Moratorium period of 12 months after course completion.
  • Second loan can be availed for completing higher studies.

3. Axis Bank Education Loan

  • Maximum Loan Amount Rs. 1 Core
  • Maximum Loan Tenure: 15 years
  • Margin: Nill Up to Rs.4 lakh
  • Can secure loan before admission based on profile.
  • Loan disbursal within 15 business days from the date the bank receives your complete application.
  • Unsecured loans up to Rs.20 lakh for working professionals.

4. Bank of Baroda Education Loan

  • Maximum Loan Amount: Rs. 80 Lakh
  • Maximum Loan Tenure: 10 –15 Years
  • Collateral: 100% Tangible Security
  • Margin: Nill Up to Rs.4 lakh
  • Education loan available for education from nursery onwards.
  • Get a free debit card on select education loan schemes.
  • Concessional interest rates for female students.

5. HDFC Bank Education Loan

  • Maximum Loan Amount: India: Rs.20 lakh Abroad: Rs.35 lakh without collateral; no limit with collateral
  • Maximum Loan Tenure: 15 Years
  • Collateral: Nill Up to Rs.7.5 lakh
  • Preferential rates offered for admission to top ranking colleges and universities.
  • Education loan abroad covers more than 950 courses in 36 countries.
  • Co-borrower can be from a different city.

6. Tata Capital Education Loan

  • Maximum loan amount of Rs.30 Lakh
  • Maximum Loan Tenure: 6 years
  • Collateral: Nill Up to Rs.4 lakh
  • Choose from 3 EMI plans as per your convenience.
  • Minimal documentation and quick approval of loans.

Education Loan Eligibility

  • Indian citizens
  • Non-Indian Residents (NRIs)
  • Overseas Citizens of India (OCI)
  • Persons of Indian Origin (PIOs)
  • Students born to Indian parents abroad and wish to study in India
  • Undergraduate programs
  • Postgraduate programs
  • Doctoral courses and PhDs
  • Certificate courses with 6 months or longer duration
  • Job-oriented courses
  • Technical/diploma/professional courses
  • Recognized institutions and government colleges
  • Private institutes aided by government
  • Professional institutions
  • International colleges and universities
  • Collateral-free loans up to Rs.7.5 lakh from leading lenders
  • Collateral-free loans up to Rs.40 lakh for select courses/institutions from select lenders

Acceptable collateral: Residential or commercial property or plot, fixed deposits, insurance

Loan amount: Up to Rs.1 crore

Education Loan EMI Calculator

If you wish to know your monthly payments upon applying for an education loan or what the total cost of the loan will be, you can use the Education Loan EMI Calculator. By entering a few loan-related details such as the loan amount, tenure, interest rate, and processing fees, you will get an estimate of your equated monthly instalment (EMI). You will also get other crucial details such as the total interest payable and a detailed amortisation table breaking down your EMIs into principal and interest amounts on a monthly and yearly basis.

Most lenders allow you to make part prepayments on your loan every year. If you wish to make such payments, you can enter the details in the calculator and the result will tell you how much you will save on interest payments and by how many years your tenure will reduce.

List of Courses that are Covered under an Education loan

  • Nursery to class 12.
  • Graduation and Post-Graduation courses (technical/professional/diploma) conducted by approved universities or colleges under UGC/IMC/AICTE/government.
  • Regular degree/diploma courses administered by autonomous institutions such as IIM/IIT, etc.
  • Regular degree or diploma courses such as pilot training, aeronautical, shipping, and more approved by the Director General of Civil Aviation/Shipping/other regulatory authority.
  • Job oriented courses (professional/technical) for Graduation/Post Graduation/Diploma such as MBA/MCA/MS offered by reputed educational institutions, courses conducted by the Chartered Institute of Management Accountants (CIMA) – London or Certified Public Accountant (CPA) – USA.
  • Loans for skill development.
  • Job oriented courses (professional/technical) for Graduation/Post Graduation/Diploma such as MBA/MCA/MS, etc. offered by reputable institutions.
  • Courses conducted by CIMA and CPA.

List of Expenses Covered in Education Loan

Here’s what the loan amount will cover:

  • Tuition fees
  • Hostel fees
  • Travel expenses passage money for students studying abroad
  • Insurance premium
  • Cost of books/equipment/instruments/uniform
  • Examination/laboratory/library fees
  • Cost of a computer/laptop required for course completion
  • Caution deposit, building fund/refundable deposit supported by institution bills/receipts
  • Any other expense required to complete the course such as study tours/thesis/project work

Features & Benefits of Study Loan

  • Loan financing up to Rs.1 crore available.
  • Loan repayment tenure up to 15 years.
  • Get Education loans for studies in India and abroad.
  • Some lenders offer loan disbursal before applying for a Visa.
  • Door-step service to collect required documents.
  • Children of the bank’s employees enjoy preferential rates at several banks.
  • Certain banks offer concessional interest rates to female students.
  • Enjoy a moratorium period of up to 1 year after course completion. During this period, you do not have to make payments on the loan.
  • Enjoy tax benefits up to 8 years on the interest paid.

Tax Benefits on Education Loan

You will get tax deduction on the interest paid on your education loan under Section 80E of the Income Tax Act, 1961. This benefit is only offered to individual borrowers and for the purpose of higher education. The deduction covers all fields of study in India and overseas. It also includes vocational as well as regular courses.

Please note that the tax deduction is only applicable on the interest portion of the EMI and not the principal. However, there is no maximum limit to claim this benefit. You will require a certificate from your bank or financial institution segregating the principle and interest portions of your EMIs to claim this benefit.

You can claim this benefit for 8 years from the year you started repayment or until the interest portion of your loan has been repaid, whichever occurs first.

List of Documents Required for Education Loan

Here is an indicative list of documents that most lenders ask:

  • Admission letter from the educational institution
  • Marksheets (previous education – school/college)
  • Age proof
  • ID proof
  • Address proof
  • Signature proof
  • Salary slips
  • Recent bank account statements
  • ITR with income computation
  • Audited balance sheet
  • Recent bank statements
  • Proof of turnover (service tax return/sales receipt)
  • Completed application form with signature
  • Latest passport size photographs
  • Appropriate Visa for studies abroad

*Document charges may be levied by the lender.

How to Apply Education Loan

There are several ways of applying for a student loan:

Apply Online:
  • This is the easiest and the most convenient way of applying. There are two ways of applying online. The first is a straightforward application form that you will fill online, attach the necessary documents, and submit the form.
  • The second is where you apply through providing all the requested details and the lender will then get in touch with you to discuss the terms of the loan before proceeding with the application.
  • Visit a Branch: You can apply for a loan by visiting your nearest branch with the necessary documents, discuss the terms of the loan with a representative, fill the form, and apply in person.
  • Call the Lender: You can either call the lender or request a call back by expressing your interest. You can then discuss the loan terms and proceed to apply.
Virtual Assistant
  • Banks and other financial institutions are now adopting digital methods to better serve their customers. One such method is using a Virtual Assistant to clear your doubts and request assistance with the application procedure.

Education Loan Repayment Process

The loan repayment period usually starts 6-12 months after completing your course or when you get a job, whichever occurs first. Different lenders provide different moratorium periods to applicants to repay the loan. You will have to repay your loan through EMIs.

Here are the different modes of repayments usually available:

  • Internet Banking - Pay online through the lender’s website or mobile app.
  • Cheque – Drop a cheque at any of the branches.
  • Direct debit – Set up recurring payments for your EMI to be directly debited from your bank account on the payment due date.
  • Demand Draft – Pay through a DD.

The preferred method of repayment varies between lenders. Therefore, it is advisable to check with your lender when taking the loan.

Discussed below are a few important details in regard to education loan repayment process:

1) Moratorium period: In the case of education loans, the beneficiaries will be able to start paying off the loan after the completion of the educational course or after successful employment.

2) Part-payment of education loans: The beneficiaries of education loans will be allowed to make part payments towards their loans. As an applicant, you can pay back a lump sum amount to make part repayment of the loan.

3) Pre-payment of education loan: If an applicant is able to manage the funds for the pre-payment of the loan amount, he or she will be able to do the same. However, it should be kept in mind that this might invite a processing fee.

If money is the only obstacle in your way from achieving your professional goals, then consider taking an education or student loan to fulfil your goals. You can get collateral-free goals wherein you need not provide any security to the lender and your repayments will not start immediately after graduation.


  1. Is the RBI moratorium on loans due to the Covid-19 pandemic applicable for education loans too?

    Yes, the Reserve Bank of India’s moratorium on retail loans, due to people undergoing financial challenges due to the Covid-19 pandemic, is applicable to education loans as well. The moratorium on Equated Monthly Instalments (EMIs) could be availed from March 2020 to August 2020.

  2. Will I get the same amount of money on my education loan for the same level course in India and abroad?

    No, usually education loans for courses in India do not offer the same amount as for comparable level courses abroad. Education loans offer higher amounts for courses abroad as fees and other expenses may be higher there than for courses in India (which also depends on the educational institution).

  3. Is it possible to get an education loan without offering a collateral?

    Almost all education loans from banks and other lenders require a collateral which can be fixed deposits, property, shares, bonds, etc. However, you can still avail an education loan without having to give any collateral. This can be achieved through the Credit Guarantee Fund for Education Loan (CGFEL) Schemes which covers a collateral-free loan of up to Rs.7.5 lakh. This is only for education loans dispersed under the Model Education Loan Scheme of Indian Banks’ Association (IBA). To avail this, you have to apply for an education loan under this scheme through a scheduled commercial bank. You don’t need to provide security or collateral for amounts of up to Rs.7.5 lakh but anything above that will require a collateral.

  4. Can I take an education loan against mine or my parents’ fixed deposit?

    You can always avail a loan against a fixed deposit, as per the terms and conditions of the lender. However, there are certain banks, such as ICICI, which provide specifically education loan against fixed deposit.

  5. For courses abroad, is the loan offered in the currency of that particular country?

    For courses abroad, education loans are typically paid directly to the educational institution in the local currency of that country.

  6. Will the moratorium on education loan get extended if I choose to take a sabbatical from my course?

    The moratorium period on education loans differ from lender to lender. However, it is usually until the borrower gets employed or for up to 1 year of the course being completed, whichever is earlier. If you choose to take a sabbatical and want an extension of your moratorium, it would depend on the bank whether to grant it or not, so it is best to have a discussion about this with the lender.

  7. Are NRIs eligible for education loans from banks in India?

    One of the eligibility criteria for education loans that are offered by banks and other financial institutions in India is that the individual should be an Indian national. This means that any student who is a citizen of India can apply for and avail an education loan from a lender in the country. Collateral or documents which can be taken as security should be those that are enforceable in India.

  8. What do the lenders consider to approve the loan?

    Lenders consider the following factors when approving a loan:

    • The course and institute you choose
    • The amount you need
    • Your academic performance
    • Repayment capacity of your family
    • Family assets
    • Annual income
  9. What happens if I discontinue the course and get an employment within the grace period?

    In case you choose to discontinue the course mid-way, you must start repaying the loan immediately after getting a job.

  10. Can I port my education loan to another bank with lower interest rates?

    Yes, you can move your education loan from one bank to another. However, your current bank might charge a refinance fees. Therefore, it is important to consider all factors of the existing bank and the new bank before moving the loan.

  11. Do all education loans cover 100% of the education expenses?

    Yes, education loans cover 100% of the education expenses. However, full coverage may only be provided for expenses under a certain limit. Lenders have a margin if the expenses go above the limit.

  12. What are the other expenses covered by education loans?

    Some of the additional expenses covered by education loans are:

    • Hostel fees
    • Exam fees, laboratory and library fees
    • Cost of books, uniforms, projects, etc.
    • Travel expenses for overseas education
    • Deposits required by the educational institute

NEWS on Education Loan

  • IDFC FIRST Bank compensates families of employees affected by Covid

    The employees of IDFC FIRST Bank will be eligible to receive compensation equivalent to four times of the CTC and also continuation of salary for further two years in case they lose their family members to Covid-19.

    The bank will also waive off loan of such employees so that the members of their family do not feel financially pressured.

    For example, if had availed a loan of Rs.30 lakh, the lender will waive off Rs.25 lakh following which the employee will have repay only Rs.5 lakh.

    Up to two children of the deceased employee will be eligible to receive a scholarship of Rs.10,000 per month, funeral expenses up to Rs.30,000, and relocation assistance of Rs.50,000 by the bank.

    15 June 2021

  • offering education loan to undergraduate students across HP and Punjab an online platform is offering education loan to undergraduate students in Punjab and Himachal Pradesh who are looking to complete their education. The online platform has teamed up with around 60 colleges in these two states to provide education loan to students looking to study further.

    This will help various students who reside in rural and semi-urban areas who despite getting admissions in colleges are unable to pursue their education because of their inability to pay the academic fees. will particularly help such students.

    26 March 2021

  • Nitish Kumar announces waiver of education loan (Student Credit Card Scheme)

    As a relief for all beneficiaries of the Student Credit Card Scheme (SCCS), the Bihar chief minister, Nitish Kumar had announced the waiver of education loan under the scheme. The government will give an education loan (up to Rs.4 lakh) to all students (intermediate pass) under the SCCS for pursuing higher education.

    He had also said that the government launched a student credit card scheme for helping poor students whose parents cannot financially support them.

    3 November 2020

  • Education Ministry seeks extension of loan-based funding

    The finance ministry of India has been requested by the education ministry to reconsiders its decision to ban borrowing based funding to educational bodies in India. The ministry of education said that the decision will affect premiere educational bodies in India including the IITs, IIMs, and AIIMS.

    Ramesh Pokhriyal the education minister made this request in a letter to the Finance Minister Nirmala Sitharaman, while Amit Khare the educational secretary also took up the matter with the ministry of finance.

    2 November 2020

  • Centre waive off compound interest on loans

    The Central Government of India told the Supreme Court that it has decided to waive off compound interest on loans under moratorium for categories. The waiver on compound interest will apply on loan repayment of up to Rs 2 crore during the six-month moratorium period.

    In an affidavit submitted by The Centre to the court, it stated that it will continue with the “Tradition of handholding the small borrowers" and therefore they have decided to waive interest during the moratorium for borrowers who are in the vulnerable category.

    The waiver on interest will be applicable on education loans, MSMEs, consumer durable loans, home loans, dues on credit card, motor loans and personal loans. For borrowers with loan amount above Rs.2 crore, the waiver of compound interest will not be applicable. The Supreme Court will go through the case again on Monday.

    6 october 2020

  • School group offers interest-free education loan with three-month moratorium

    VIBGYOR Group of Schools has launched an interest free loan scheme which will allow parents impacted financially by Covid-19 to bear the expense of their children’s education. Parents whose wards are studying in VIBGYOR schools in Mumbai, Pune, Nashik and Vadodara can avail this loan. As per the scheme, each family can avail of a maximum of 2 loans for up to Rs.5 lakh (Rs 2.5 lakh per student) for 27 months, including a three- month moratorium. 100% interest will be paid by VIBGYOR on the loan for eligible families.

    The interest rate charged is 8.25%. There are no collaterals required to be pledged, and no foreclosure or hidden charges involved.

    16 September 2020

  • Banks to make the process of availing education loans 100% digital due to COVID-19

    With the country and the economy suffering due to COVID-19, various banks have made their educations loans 100% digital to enforce social distancing. The process of applying for the education loans from the sourcing to approval and verification of documents can be done from home. The disbursal of the loan will be done online as well.

    As the repo rates have been dipping as decided by the Reserve Bank of India along with the benchmark rates of the banks, education loans are at its cheapest in 10 years, according to sources. The interest rates for the loans are ranging from 7% to 8.5% according to M. Paramasivam, General Manager, Priority Credit Wing, Canara Bank.

    Concerns over banks denying student loans and delaying the loan issuance in many cases were brought up by founder and governor of the Education Loan Task Force, K. Srinivasan. Banks have also increased the loan amount to Rs.7.5 lakh.

    13 August 2020

  • Various banks may offer education loans for studying from home

    Many state-owned banks are working on offering new loan products which aim to fund students for their education online. Various banks have begun preliminary discussions where they could tweak their existing education loans for the online classes which are held by colleges and universities. Apart from this, it could also cater to those courses done through various educational platforms from home.

    According to various reports, the internal discussions have begun and discussions with the stakeholders will follow. However, there will be much more clarity after the education institutions chalk out their fee structure for the courses which will be available online. There are already a few banks which have partnered with online education portals.

    Deputy General Manager of Indian Bank, M Aruna, stated that the institutions will be thinking about the process of application for students if they apply for online courses. With the shift to digital platforms, education loans will have to be framed in such a way. The fee for online courses will be must lesser than the fee which would have been charged for education on-campus.

    16 July 2020

  • Chandigarh University launches its Financial Aid Scheme for Students

    The Chandigarh University is now offering the Financial Aid Scheme to its students and this is worth Rs.48 crore. It has been launched to help the deserving and meritorious students from any part of the country so that they will be able to fulfill their dreams and reach their goals. This scheme had been launched by the University Chancellor, Satnam Singh Sandhu. While they had launched this scheme, Satnam Singh Sandhu had said that getting access to good quality education is a right for every student in the country and their financial constraints should not be allowed to stop them from getting education.

    This is the first of its kind in India and the Financial Aid Scheme launched by Chandigarh University is set to be offered on merit and also first-come-first-serve basis and this will be applicable to the 109 Under-Graduate and Post-Graduate programs.

    29 June 2020

  • Renewal of Educational Loans awaited by minority community students in Karnataka

    Minority community students in Karnataka who have taken admissions for professional courses are awaiting a decision on the renewal of education loans from the Karnataka Minorities Development Corporation.

    Two instalments of the margin amount have been paid for the education loan under the Arivu Scheme. Updates are also being awaited regarding the release of fees from the second year onwards. Around 300 students from the Udupi districts and 2,000 students from Dakshina Karnataka are waiting for the fees for the academic year 2019-2020. As per the scheme, students who belong to religious minority groups can avail loans ranging between Rs.10,000 and Rs.75,000 to pursue B.Ed, nursing, master’s degree, and professional courses. The student must pay margin money, which is a 2% service charge and 10% of the loan amount, in order to avail the loan. The margin money must be paid in instalments over the duration of the course. In the case of an engineering course, the margin money comes up to Rs.6,000.

    26 June 2020

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