How to Get an Education Loan in India

Nowadays, education is being given utmost significance, and why not? It is one of the primary sources of our livelihoods in one way or the other. However, it requires a colossal amount of investment, especially tertiary-level education. Highly ranked top institutions like the Indian Institute of Management come with challenges like cracking one of the toughest entrance exams alongside a high fee structure. Such exams are a blessing to crack, accordingly, nobody leans towards giving up their academic dreams.

Education Loan
Education Loan

Thus, when such circumstances emerge, people rely on education loans. The chosen bank lends an educational loan to the borrower, who is liable to pay interest on the loan along with the principal amount. Such organizations also offer numerous educational schemes for higher studies abroad.


For most of the part, banks offer education loans to meritorious students at a low rate of interest without having to follow a procedure full of complexities and formalities. Though the criterion differs a bit from bank to bank, there are some mandatory ones-

  • Firstly, the lender should be a student native to India with a stable family income who falls between the age group of 18 to 35 years.
  • The admission status of the student must be confirmed to acquire an education loan.
  • The student should hold a brilliant and stable academic record that might be judged in accordance with the previous mark sheets.
  • The candidate should have applied to a recognized university in India or abroad. Also, it should be among the top-tier universities with good prospects.
  • The course should be among a full-time undergraduate, postgraduate, or postgraduate diploma program.

How to Apply?

Step 1: Registration and Filling out the forms

Nowadays, in the digital era, people prefer an online process for filling an application form. Firstly, register on the preferred portal with your name, number, email, and password. Post that, you just need to fill in some basic details in the online application form along with the attachment of the required documents. It is now quite convenient as one can apply to multiple banks in one go rather than applying separately. The offline procedure requires visiting the nearest bank branch and discussing the terms of the loan, followed by the application procedure.

Step 2: Personal Discussion

Once applied, the bank considers your application, and an executive calls to have an honest and straightforward discussion with the applicant. They might ask basic questions related to your academic accomplishments, details about the institution, and the course to be pursued. The applicant is expected to be honest and should be well-aware of the course details by heart. Accordingly, the goal should be convincing the executive that the course would surely yield enough income to repay the loan.

Step 3: Verification of Documents

The foremost document required is the enrollment letter offered by the university for the verification of the course by the bank. Thereafter, the bank might verify the details from the university to prevent fraudulent activities. The verification of academic documents, for instance, mark sheets, certificates, etc. is required to ensure the brilliance of the applicant. Then, you need financial documents like income statements and fee schedules for covering expenses, from hostel fees to purchasing books. Moreover, if the loan amount exceeds a specific amount, each bank has different policies regarding the collateral that are supposed to be fulfilled.

Step 4: Approval

Following the successful verification of documents, the parents are considered the co-borrowers as the student is not an earning member of the family. They are given a moratorium period until the completion of the course. The principal amount is paid after the period, and the payment of interest is made as per the borrower. After the complete credit history verification, the loan is sanctioned once the collateral and security papers have been submitted. Finally, the loan disbursal takes place, which is the direct amount paid by the bank to the respected university. It can be in the form of a banker’s cheque, demand draft, or swift message directly to the location provided.

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Top Education Loan Providers


  • Maximum limit for education in India- ₹ 20,00,000 ; Foreign education- No limit
  • Interest Rate for Indian education- 9.40% – 13.34% ; Foreign education- 8.64%
  • Repayment tenure- Up to 15 years
  • Collatoral requirement- Up to ₹ 7.5 lakh
  • Hidden Charges- Nil
  • Preferetial interest rates for top tier universities

Axis Bank

  • Maximum limit for education in India- ₹ 75,00,000
  • Interest Rate- Up to ₹4 lakhs: 15.20%; Up to ₹4-7.5 lakhs: 14.70%; Up to ₹7.5 lakhs: 13.70%
  • Repo Rate – 4%
  • Repayment tenure- 5 to 7 years; 10 years up to ₹7.5 lakhs; 15 years above ₹7.5 lakhs
  • Collatoral Requirement- Up to ₹ 7.5 lakh
  • Provides loan to the students securing at least 50% marks in high school/graduation.

State Bank of India

  • Maximum limit for education in India- ₹ 1.5 crores
  • Interest Rate- 9.30%
  • Repayment tenure- 15 years post the course period
  • Collatoral Requirement- Above ₹ 7.5 lakhs
  • Processing charges- Above ₹ 20 lakhs
  • Offers exclusive scholar loan schemes for merit students being admitted to premier universities like top IIM and IITs.


  • Maximum limit for education in India- Up to ₹50,00,000; Foreign education- ₹1 Crore
  • Interest Rate- 10.25% – 12.75%
  • Repayment tenure- 8-10 years for UG courses; 10-12 years for PG courses
  • Collatoral Requirement- Only above ₹20 lakh for UG courses and above ₹40 lakh for PG courses.
  • The loan comes with special remittances like travel expenses, laptops, etc. for studies in international institutes.

Bank of Baroda

Baroda Gyan Loan– Offered to the students pursuing any professional course in India.

  • Maximum loan amount- Medical and Aviation courses: ₹ 125 lakhs; Others: ₹ 10 lakhs
  • Interest Rate- 9.25%
  • Repayment tenure- 10-15 years
  • Collatoral Requirement- Up to ₹7.5 lakhs

Baroda Scholar– Offered to the meritorious students pursuing an MBA, MCA, or other postgraduate courses that generate job creation.

  • Maximum loan amount- ₹ 80 lakhs
  • Interest Rate- 8.50% – 9.15%
  • Repayment tenure- 10-15 years
  • Collatoral Requirement- Up to ₹7.5 lakhs

Skill Loan Scheme– This scheme is deigned and offered to the students pursuing technical courses from premier training institutes.

  • Maximum loan amount- ₹1,50,000
  • Interest Rate- 9.5%
  • Repayment tenure- Up to 7 years
  • No collatoral required

Arzoo Bhatia

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