An education loan is a financial scheme that helps students pursue their dream education without any monetary hurdles. It directly supports expenses such as college fees, hostel charges, books, laptops, uniforms, educational trips, and examination fees.
This is especially beneficial for courses that require substantial financial investment, such as medical, engineering, management, law, and other professional programs, as well as studies abroad. In such situations, an education loan empowers students to build a brighter future.
Eligibility Criteria for Availing an Education Loan
- The applicant must be an Indian citizen.
- Admission should be secured in a government-recognized educational institution.
- If admission is through management quota, the student must have secured at least 60% marks in the previous academic year.
- The course must be from a recognized university or education board.
- The student must possess an Aadhar card and PAN card.
- Other required documents include a recent photograph, address proof, admission letter, and fee receipt.
How Much Education Loan Can One Get?
- For studies in India: Up to ₹10 lakh
- For studies abroad: ₹60–75 lakh (some banks offer up to ₹1.5 crore)
- No margin money is required for loans up to ₹4 lakh.
- Above ₹4 lakh:
- For studies in India – 5% margin money
- For studies abroad – 15% margin money
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Education Loan – A Boon for Bright Students
Thousands of students are fulfilling their academic dreams in medicine, engineering, and international education through education loans. Here’s a complete guide on how to apply.
Loan Repayment Terms
- Repayment begins one year after completing the course or six months after getting a job, whichever is earlier.
- Normally, the repayment tenure is between 5 to 7 years.
- Some banks may offer up to 15 years for repayment.
How to Apply
- You can apply directly by visiting the bank or through their official website.
- Required documents include:
- Admission letter
- Cost estimate from the institution
- Identity proof
- Academic certificates
- Income proof of the family
- A processing fee is applicable (some banks waive this fee).
- After verification, the loan amount is disbursed directly to the educational institution.
- Alternatively, you can apply through the Vidya Lakshmi Portal, a centralized government platform to apply to multiple banks at once. (Application link provided at the end of the article.)
Education Loans for Overseas Studies
Students pursuing undergraduate or postgraduate education abroad can avail higher loan amounts from banks if admitted to recognized foreign universities. Required documents include:
- Passport
- Visa
- Admission letter
- Other supporting documents
Current Education Loan Interest Rates (as of 2025)
| Bank | Interest Rate |
|---|---|
| SBI | 7.9% – 10.9% |
| Punjab National Bank | 4% – 12% |
| Bank of Baroda | 7.9% – 14.25% |
| Canara Bank | 8.35% – 11.75% |
| HDFC Bank | From 10.5% |
| ICICI Bank | From 10.25% |
| Axis Bank | 9.58% – 12.75% |
| Karnataka Bank | From 10.48% |
Note: Interest rates vary depending on the student’s credit score, course, and institution. Processing fees and other charges may also differ.
Government Interest Subsidy Scheme
Students studying in government-approved technical institutions are eligible for interest subsidy during the study period, provided they submit an income certificate based on prescribed criteria.
Key Points to Remember
- Compare interest rates and terms from various banks before choosing.
- Ensure your admission is in a recognized college/university.
- Consider your family’s financial capacity for repayment.
- Submit all necessary documents on time during the loan process.