This article explains everything related to student loans in India, including eligibility, application procedure, interest rates, and more. By the end of this guide, you will have sufficient information to choose the right education loan for studying abroad or in India.
Steps to Get an Education Loan
Many students apply for education loans to pursue internationally recognised courses such as MBA, engineering, or medicine. Since most applicants borrow a loan for the first time, they usually have limited knowledge about the borrowing process. Below is a simple roadmap to help you understand how to get an education loan.
- Know Your Needs: Calculate the required loan amount after considering savings and scholarships.
- Check Options: Compare education loan schemes offered by different banks and shortlist a few options.
- Check Eligibility: Ensure you meet the eligibility criteria before applying.
- Collect Documents Required: Arrange all documents required for loan submission.
- Apply for Student Loans: Submit the application form to begin the process.
- Profile Verification Process: Banks verify documents before loan disbursement.
Education Loan Interest Rates 2026 (Updated)
Education loan interest rates vary across banks and NBFCs. ROI depends on academic performance, loan amount, and CIBIL score. Interest rates generally start from 9.15% and go up to 14.00%. Public sector banks usually offer lower interest rates compared to private lenders.
| NBFCs and Banks in India | Starting Interest Rate | Notes / Key Schemes |
|---|---|---|
| State Bank of India (SBI) | 9.15% P.A. onwards | Global Ed-Vantage Scheme (Female student concession available) |
| Bank of Baroda (BoB) | 8.70% P.A. onwards | Baroda Scholar Scheme (Rates vary based on loan amount) |
| Punjab National Bank (PNB) | 8.35% P.A. onwards | PNB Udaan Scheme (Lower rates for premium institutions) |
| Union Bank of India | 9.00% P.A. onwards | Rates depend on course, collateral, and institution |
| ICICI Bank | 9.50% P.A. onwards | Secured and unsecured loan options |
| HDFC Credila | 8.95% P.A. onwards | Floating rates based on student profile |
Benefits of Taking an Education Loan for Abroad Studies
When financial limitations restrict overseas education plans, education loans provide necessary support. Apart from covering tuition fees, education loans offer several additional advantages.
- Protect Family Savings and Investments
- Avoid Selling Valuable Assets
- Income Tax Benefits under Section 80E
- Flexible Repayment with Moratorium Period
- Helps in Building a Strong Credit History
Eligibility Criteria for Education Loan in India
Before applying, it is important to verify eligibility requirements. Though criteria may vary across banks, the common conditions are listed below.
- The applicant must be an Indian citizen.
- If the applicant is below 18 years, parents must apply as co-borrowers.
- A strong academic record is required.
- Admission to a recognised overseas university is mandatory.
- The selected course should be professional or technical.
Documents Required for Student Loan to Study Abroad
| Type of Documents | For Applicant | For Co-Applicant |
|---|---|---|
| Date of Birth Proof | Birth Certificate, Passport, Aadhaar Card | N/A |
| Address Proof | Electricity Bill, Rent Agreement, Aadhaar Card | Same as applicant |
| Academic Documents | 10th & 12th Certificates, Offer Letter, Fee Structure | N/A |
| Income Proof | Salary slips, ITR, Bank statements | Salary slips / ITR / Bank statements |
| Collateral Documents | Property papers, EC, Valuation report | If applicable |
Note: Document requirements may vary depending on bank policies.
Education Loan for Abroad Studies 2026: How to Apply for an Education Loan
The education loan application process can be time-consuming, so applying early is advisable.
- Confirm whether the selected course is recognised by banks.
- Estimate the loan amount required.
- Compare loan schemes from multiple banks.
- Submit the loan application to the selected bank.
- Sign loan documents after approval.
- Loan amount is disbursed in instalments.
Top Education Loan Providers in India
| Bank / NBFC | Loan Amount Range |
|---|---|
| State Bank of India | Up to INR 1.50 Crore |
| HDFC Credila | Minimum INR 1 Lakh, No Upper Limit |
| Punjab National Bank | INR 7.50 Lakh to INR 1 Crore |
| Bank of Baroda | INR 7.50 Lakh to INR 1.50 Crore |
| ICICI Bank | Up to INR 3 Crore |
| Axis Bank | No maximum limit |
Collateral Rules for Education Loan
Banks require collateral as security for higher education loans. Collateral may include liquid or immovable assets.
| Accepted Collateral | Status |
|---|---|
| Fixed Deposits, Shares, Bonds | Accepted |
| House / Commercial Property | Accepted |
| Gold, Mutual Funds | Accepted |
| Agricultural Land | Not Accepted |
Loans up to INR 4 lakh are available without collateral. For loans exceeding INR 7.5 lakh, banks require property or other valuable assets.
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