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A solid education is one of the most powerful investments in one’s future. However, with the rising costs of tuition fees, accommodation, and other expenses, many students struggle to afford higher education, especially if they aspire to study abroad or in prestigious institutions in India. This is where educational loans come in, providing financial support to students who need assistance in funding their studies.
In India, several banks and financial institutions offer student loans with varying interest rates, repayment terms, and benefits. Below, we will discuss the 7 best educational loans in India, covering their features, eligibility criteria, interest rates, and repayment options in detail.
List of 7 Best Banks to Get Educational Loan in India
| Bank | Loan Amount | Interest Rate |
|---|---|---|
Punjab National Bank | Need-based finance | Starts at 9.15% |
HDFC Bank | Up to INR 1.50 crore | Starts at 10.50% |
SBI Education Loan | Up to INR 3 crore (international) | Starts at 8.25% |
Kotak Mahindra Bank | Up to INR 20 lakh | Starts at 10.99% |
Axis Bank | Up to INR 75L (unsecured), no limit (secured) | Starts at 9.35% |
Bank of Baroda | Up to INR 80L, 1.25Cr for medical/aviation | Starts at 8.15% |
ICICI Bank | Up to INR 3 crore | Starts at 9.50% |
1. Punjab National Bank Education Loan
PNB offers education loans under PNB Udaan (for international studies) and PNB Pratibha (for top Indian institutes).Key Features
- Loan Amount: Need-based finance subject to repaying capacity
- Interest Rate: Starts at 9.15%
- Repayment Tenure: Up to 15 years
- Processing Fees: Up to 1.00% of loan amount
Eligibility Criteria
- Indian students with confirmed admission
- Co-borrower required
2. HDFC Bank Education Loan
HDFC Bank provides education loans with attractive terms for students pursuing higher education in India and abroad.Key Features
- Loan Amount: Up to INR 1.50 crores
- Interest Rate: Starts at 10.50%
- Repayment Tenure: Up to 15 years
- Processing Fees: Up to 1% of loan amount
- Collateral Requirement: Based on loan amount and student's profile
Eligibility Criteria
- Must be an Indian citizen with admission in a recognised institution
- Co-borrower with a stable income is required
- Good academic record preferred
Repayment
- Moratorium period of course duration + 12 months
- Flexible repayment plans with part-payment options
3. SBI Education Loan
The State Bank of India (SBI) offers a variety of education loans under different schemes to cater to both domestic and international students. SBI is known for its lower interest rates and flexible repayment options.Key Features
- Loan Amount: Up to INR 3 crore (for international studies)
- Interest Rate: Starts at 8.25% per annum
- Repayment Tenure: Up to 15 years
- Processing Fees: Nil for loans up to INR 20 lakh
- Collateral Requirement: Required for loans above INR 50 lakh
Eligibility Criteria
- Indian nationals who have secured admission in recognised universities or colleges
- Undergraduate, postgraduate, and doctoral programs are covered
- Students must have a co-borrower (parent or guardian)
Repayment
- Repayments begin one year after course completion or six months after getting a job, whichever comes first
- Flexible EMI options available
4. Kotak Mahindra Bank Education Loan
Kotak Mahindra Bank provides education loans with quick approval and digital processing.
Key Features
- Loan Amount: Up to INR 20 lakh
- Interest Rate: Starts at 10.99%
- Repayment Tenure: Up to 15 years
- Processing fees: NIL
Eligibility Criteria
- Indian students with confirmed admission in a recognised institution
- Co-borrower with a stable income required
- Collateral required for loans above INR 7.5 lakh
Repayment
- Moratorium period of course duration + 12 months
- Flexible EMI repayment plans
5. Axis Bank Education Loan
Axis Bank provides education loans for Indian students pursuing higher education both in India and abroad, offering competitive interest rates and quick approval.
Key Features
- Loan Amount: Up to INR 75 lakh for unsecured loans, no upper limit for secured loans
- Interest Rate: Starts from 9.35%
- Repayment Tenure: Up to 15 years
- Processing Fees: Upto 2% of the loan amount, exculding GST
- Collateral Requirement: Required for loans above INR 75 lakh
Eligibility Criteria
- Indian students admitted to recognised institutions
- Co-applicant required (parent/guardian)
- Minimum academic performance standards apply
Repayment
- Flexible repayment schedule with EMI options
- Moratorium period of course duration + 12 months
6. Bank of Baroda Education Loan
Bank of Baroda’s Baroda Scholar Scheme supports students studying abroad.Key Features
- Loan Amount: Upto INR 80 lakh and upto 1.25 crores for medical and aviation
- Interest Rate: Starts at 8.15%
- Repayment Tenure: Up to 15 years
- Processing fees: No fee up to 7.5 lakh
Eligibility Criteria
- Indian nationals with admission to a recognised university
- Co-borrower required
- Collateral required for loans above INR 7.5 lakh
Repayment
- Moratorium period of course duration + 12 months
- Flexible repayment through EMIs
7. ICICI Bank Education Loan
ICICI Bank offers education loans up to INR 3 crore with minimal documentation and quick disbursement.Key Features
- Loan Amount: Up to INR 3 crore
- Interest Rate: Starts at 9.50%
- Repayment Tenure: Up to 14 years
- Processing Fees: Up to 2% of loan amount
- Collateral Requirement: Unsecured loans up to 1 crore for premium institutes
Eligibility Criteria
- Admission to recognised institutions in India or abroad
- Co-borrower required
Repayment
- EMIs start after the moratorium period
- Flexible tenure options
Documents Needed for an Education Loan
Applying for an education loan requires submitting specific documents for verification. Here’s a list of essential documents:
1. Student’s Documents:
- Admission letter from the university/institution
- Academic records (mark sheets, certificates)
- Identity proof (Aadhaar card, PAN card, passport)
- Address proof (Aadhaar, utility bill, rental agreement)
- Passport-size photographs
2. Co-Applicant/Guarantor Documents:
- Identity & address proof
- Income proof (salary slips, income tax returns)
- Bank statements (last 6 months)
3. Loan-Specific Documents:
- Fee structure from the institution
- Collateral documents (if applicable)
- Duly filled loan application form
Disclaimer: All the features, interest rates, steps, and other information specified above are sourced when this page was written and are subject to change. For exact information, refer to the respective bank's website or contact them.
Advantages of an Education Loan in India
Education loans provide numerous benefits, making higher studies more accessible for students. Here are some key advantages:
- Financial Support – Covers tuition fees, living expenses, and travel costs, reducing the financial burden on families.
- Lower Interest Rates – Public sector banks offer competitive interest rates, making repayment affordable.
- Flexible Repayment Options – Most banks provide a moratorium period, allowing students to start repayment after course completion.
- Tax Benefits – Interest paid on education loans qualifies for tax deduction under Section 80E of the Income Tax Act.
- No Immediate Repayment – Unlike personal loans, education loans do not require immediate EMI payments while studying.
- Builds Credit History – Timely repayments improve the student's credit score, helping in future financial needs.
Applying for an education loan in India is a simple process. Follow these steps:
- Research & Compare – Check different banks’ interest rates, loan amounts, and repayment terms to choose the best option.
- Check Eligibility – Ensure you meet the bank’s eligibility criteria, including admission to a recognised institution and a co-applicant requirement.
- Gather Documents – Collect necessary documents like admission letters, academic records, identity proofs, and financial details.
- Fill Out the Application Form – Visit the bank’s website or branch and submit the application form along with required documents.
- Loan Processing & Verification – The bank will verify documents, assess creditworthiness, and may ask for collateral if needed.
- Loan Approval & Disbursement – Once approved, the bank issues a sanction letter, and the loan amount is disbursed directly to the institution or student’s account.
FAQs on Educational Loans in India
1. What is the maximum loan amount I can get for studying in India or abroad?
The maximum loan amount varies by bank. For example, ICICI Bank and SBI offer loans up to INR 3 crore for international studies, while most other banks offer up to INR 20-80 lakh.
2. Do I need collateral to get an education loan?
Collateral is required for loans above a certain threshold, typically INR 7.5 lakh. However, some banks like ICICI Bank offer unsecured loans up to INR 1 crore for premium institutes.
3. What is the moratorium period on education loans?
The moratorium period is generally course duration plus 12 months, meaning you start repaying the loan after completing your studies or securing a job.
4. Can I get a tax benefit on my education loan?
As per Section 80E of the Income Tax Act, you can claim tax benefits on the interest paid on your education loan.
5. Who can be a co-applicant for an education loan?
A co-applicant is usually a parent, guardian, or spouse with a stable income who shares the responsibility for loan repayment.
6. What documents are required to apply for an education loan?
You need admission proof, academic records, identity/address proof, co-applicant income details, and collateral documents (if required).
7. How long do I have to repay an education loan?
Repayment tenure typically ranges from 10 to 15 years, depending on the bank and loan amount, with flexible EMI options available.
Disclaimer:This page includes information that has been compiled from many sources and is only offered for informational purposes. Since this type of data might change over time, we cannot guarantee that the information supplied or included within it is accurate. It is anticipated that the user would confirm with the relevant source prior to taking any choices or actions.
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