How can students in India finance their higher education? With rising tuition costs, educational loans have become essential for students pursuing higher studies in India and abroad. Leading banks and financial institutions offer education loans with flexible repayment options, competitive interest rates, and moratorium periods. These loans cover tuition fees, accommodation, travel, and other academic expenses, making higher education more accessible.
Whether for undergraduate, postgraduate, or professional courses, choosing the right loan can ease financial burdens and provide long-term benefits. Understanding the best educational loans helps students and parents make informed decisions for a secure academic future.
In this blog, we will take a look at 10 Best Educational Loans for Students in India.
Advantages of an Education Loan in India
- Financial Support: Helps students afford higher education without burdening their families.
- Flexible Repayment: Repayment starts after course completion with an extended tenure of up to 15 years.
- Tax Benefits: Interest paid is deductible under Section 80E of the Income Tax Act.
- No Immediate Repayment: Includes a moratorium period covering the course duration and an additional grace period.
- Covers All Expenses: Tuition, books, hostel, travel, and other educational costs are covered.
- Collateral-Free Options: Many banks offer unsecured loans for eligible students.
- Builds Credit History: Timely repayment improves credit scores.
- Lower Interest Rates: Competitive rates, especially for premier institutions.
- Encourages Higher Education: Enables students to study at top universities in India and abroad.
- Easy Application Process: Online and offline options available for quick approval.
Expenses Covered under Education Loans in India
- Tuition Fees: Covers academic fees charged by the institution.
- Hostel & Accommodation: Includes on-campus and off-campus housing expenses.
- Examination & Library Fees: Covers charges for exams, labs, and library usage.
- Books & Study Materials: Funds for textbooks, stationery, and other study resources.
- Laptop & Equipment: Covers the cost of a laptop or other essential devices.
- Travel Expenses: Includes airfare and transportation costs for international students.
- Insurance Premium: Some loans include student health and travel insurance.
- Project & Research Costs: Funds for thesis, dissertation, and research work.
- Daily Living Expenses: Covers food, clothing, and personal expenses.
- Extracurricular Activities: Some loans include expenses for additional training or workshops.
List of 10 Best Educational Loans for Students in India
1. State Bank of India (SBI) Education Loan
Students can access education loans of SBI to support their academic studies domestically or abroad. Education loan rates at SBI start at 8.05% and go as high as 11.75% per year. The bank does not apply any processing fee for education loans that are less than ₹20 lakh.
The bank offers students up to fifteen years of repayment terms that combine the period which was granted as a moratorium. Students have three options to choose from: the SBI Student friendly Loan, Scholar Loan or Global Ed-Vantage Loan based on their specific needs. Loans above ₹7.5 lakh require collateral.
The educational loan accepts spending on tuition charges together with textbooks and class materials as well as learning tools. Educational expenses funded through loans from SBI qualify for tax deductions under Section 80E. Students may seek assistance by applying through the online system or visiting a branch office.
Eligibility Criteria: Indian students admitted to recognised institutions in India or abroad. Collateral required for loans above ₹7.5 lakh.
Loan Amount: ₹50,000 – ₹1.5 crore.
Interest Rate: Starts at 8.05% per annum.
Tenure: Up to 15 years.
Processing Fees: Nil for loans up to ₹20 lakh; 1% for loans above this amount (max ₹10,000).
Features:
- Flexible repayment options with a moratorium period.
- Special interest rates for students of premier institutions.
- Tax benefits under Section 80E.
- No collateral required for loans up to ₹7.5 lakh.
- Covers tuition, hostel, books, and travel expenses.
2. Punjab National Bank (PNB) Education Loan
PNB provides education loans, at starting rates of 8.10% per annum for interested borrowers. Students can use this loan to cover their educational expenses that include tuition costs along with hostel bills, books and travel needs.
India-based studies don’t require any processing fee from students but international students face a flat 1% fee capped at ₹10,000. Students benefit from up to 15 years of repayment flexibility through this loan program. Loans above ₹7.5 lakh require collateral.
The PNB Udaan and Pratibha Loans from PNB function as specialised financing tools for premier academic institutions. Tax benefits under Section 80E apply. Students can initiate their loan applications using both the institution’s online platform and in-person at bank branches.
Eligibility Criteria: Indian students enrolled in recognised institutions in India or abroad. Collateral required for loans above ₹7.5 lakh.
Loan Amount: ₹50,000 – ₹1.5 crore.
Interest Rate: Starts at 8.10% per annum.
Tenure: Up to 15 years.
Processing Fees: Nil for domestic loans; 1% of the loan amount (up to ₹10,000) for international studies.
Features:
- Specialised schemes like PNB Udaan and PNB Pratibha for premier institutes.
- Flexible repayment options post-moratorium.
- Tax benefits under Section 80E.
- No margin money required for loans up to ₹4 lakh.
- Quick processing for eligible students.
3. Canara Bank Education Loan
Canara Bank allows students to obtain education loans with an annual interest starting from 9.25%. Students studying in India or abroad under this loan program can use their payment to cover tuition expenses as well as expenses for exams and costs linked to hostel residence and travel.
The loan processing fees at 0.50% apply to all amounts below ₹10,000 but only for collateral-based loan applications. The available loan amount extends up to ₹40 lakh for domestic studies while international study opportunities can reach up to ₹60 lakh. The loan period spans up to 15 years and includes a moratorium period that occurs during the course duration.
Students who attend selected prestigious educational institutions often receive reduced interest rates on their loans. Students need to submit their applications through the bank’s online platform or in-person at their branches.
Eligibility Criteria: Indian students pursuing recognised courses in India or abroad. Collateral required for loans above ₹7.5 lakh.
Loan Amount: ₹50,000 – ₹60 lakh.
Interest Rate: Starts at 9.25% per annum.
Tenure: Up to 15 years.
Processing Fees: 0.50% of loan amount (max ₹10,000) for loans with collateral.
Features:
- No processing fees for loans up to ₹7.5 lakh.
- Loan covers tuition, books, equipment, hostel fees, and travel expenses.
- Tax benefits under Section 80E.
- Special lower interest rates for students of premier institutions.
- Available for both undergraduate and postgraduate courses.
4. HDFC Bank Education Loan
HDFC Bank offers education loans up to ₹150 lakh with competitive interest rates. The loan covers tuition fees, accommodation, travel, books, and other educational expenses. Preferential interest rates are available for students of top-ranked institutions.
Unsecured loans are available for eligible students. Repayment tenure extends up to 15 years, including the moratorium period. No collateral is required for loans up to a certain limit.
HDFC provides tax benefits under Section 80E. The loan approval process is quick, with minimal documentation. Students can apply online or visit an HDFC Bank branch for further details and loan processing.
Eligibility Criteria: Indian students with confirmed admission to recognized institutions.
Loan Amount: ₹50,000 – ₹1.5 crore.
Interest Rate: Competitive rates based on institution ranking.
Tenure: Up to 15 years.
Processing Fees: Varies based on loan amount.
Features:
- Unsecured loans available for eligible students.
- Covers tuition, travel, accommodation, and living expenses.
- Quick approval and disbursal process.
- Special loan schemes for premier institutions.
- Tax benefits under Section 80E.
5. Axis Bank Education Loan
Axis Bank offers education loans with interest rates ranging from 13.70% to 15.20% per annum. The loan covers tuition fees, hostel charges, books, and travel expenses for studies in India and abroad.
Processing fees are 2% of the loan amount plus GST. The repayment tenure extends up to 15 years, including the moratorium period. Axis Bank provides loans up to ₹75 lakh without collateral for eligible students.
Tax benefits under Section 80E are available. Students can avail of the loan through a simple online application process or by visiting a bank branch for further details and assistance.
Eligibility Criteria: Indian students pursuing higher education in India or abroad.
Loan Amount: ₹50,000 – ₹75 lakh.
Interest Rate: 13.70% – 15.20% per annum.
Tenure: Up to 15 years.
Processing Fees: 2% of the loan amount plus GST.
Features:
- Unsecured loans up to ₹40 lakh.
- No margin money required for loans up to ₹4 lakh.
- Flexible repayment options post-moratorium.
- Tax benefits under Section 80E.
- Quick loan approval and easy documentation process.
6. Bank of Baroda (BoB) Education Loan
Bank of Baroda provides education loans with interest rates starting from 9.70% per annum. The loan covers tuition fees, books, equipment, travel, and hostel expenses.
No processing charges are applicable for loans up to ₹7.50 lakh, while above this amount, a 1% fee (up to ₹10,000) is applicable. The repayment tenure extends up to 15 years. Loans above ₹7.5 lakh require collateral.
BoB offers special schemes like the Baroda Scholar Loan for studies abroad and Baroda Gyan Loan for domestic studies. Tax benefits under Section 80E apply. Applications can be made online or at BoB branches.
Eligibility Criteria: Indian students admitted to recognised institutions in India or abroad.
Loan Amount: ₹50,000 – ₹1.5 crore.
Interest Rate: Starts at 9.70% per annum.
Tenure: Up to 15 years.
Processing Fees: Nil for loans up to ₹7.5 lakh; 1% fee (max ₹10,000) for higher amounts.
Features:
- Special Baroda Scholar Loan for international studies.
- No collateral required for loans up to ₹7.5 lakh.
- Covers tuition fees, books, equipment, and travel costs.
- Tax benefits under Section 80E.
- Preferential rates for students in premier institutions.
7. ICICI Bank Education Loan
ICICI Bank offers education loans up to ₹1 crore for domestic studies and up to ₹3 crore for overseas studies. Interest rates start from the REPO rate + 3.75% onwards.
The loan covers tuition fees, travel, hostel charges, and study materials. Unsecured loans up to ₹1 crore are available for eligible students. The repayment tenure extends up to 10 years.
Quick loan approval and minimal documentation make ICICI a popular choice. The loan also provides tax benefits under Section 80E. Students can apply online or visit an ICICI Bank branch for further details and assistance in loan processing.
Eligibility Criteria: Indian students admitted to recognised universities in India or abroad.
Loan Amount: Up to ₹1 crore for domestic studies, ₹3 crore for overseas studies.
Interest Rate: REPO + 3.75% onwards.
Tenure: Up to 10 years.
Processing Fees: Varies based on loan amount.
Features:
- No collateral required for loans up to ₹1 crore.
- Covers tuition, living expenses, travel, and study materials.
- Quick approval process with minimal documentation.
- Special loan offers for students at top universities.
- Tax benefits under Section 80E.
8. IDBI Bank Education Loan
IDBI Bank provides education loans starting at 8.55% per annum in interest rate. Students studying in India or abroad can use their education loan to cover tuition fees and hostel expenses as well as books and examination fees along with travel costs.
Students who study in India receive free processing fees but international students face a maximum 1% fee capped at ₹5,000. The repayment period stretches to 15 years. Loans above ₹7.5 lakh require collateral.
Such loans provide tax benefits to borrowers through Section 80E of the Income Tax Act. IDBI Bank delivers effortless loan approvals through its streamlined documentation process. Students can apply through the online system or consult with representatives at their local branch for additional details.
Eligibility Criteria: Indian students pursuing recognised courses in India or abroad.
Loan Amount: ₹50,000 – ₹50 lakh.
Interest Rate: Starts at 8.55% per annum.
Tenure: Up to 15 years.
Processing Fees: Nil for domestic studies; 1% fee (max ₹5,000) for international studies.
Features:
- No margin money required for loans up to ₹4 lakh.
- Flexible repayment tenure with moratorium period.
- Covers tuition, books, travel, and hostel expenses.
- Tax benefits under Section 80E.
- Quick loan disbursal process.
9. Bank of India (BOI) Education Loan
Bank of India offers education loans with interest rates starting from 8.40% per annum. The loan covers tuition fees, hostel charges, books, and travel expenses for studies in India and abroad. No processing fees are charged for domestic studies.
The repayment tenure extends up to 15 years, including the moratorium period. Loans above ₹7.5 lakh require collateral security. BOI offers special schemes like the Star Education Loan and Skill Loan Scheme.
Tax benefits under Section 80E apply. Students can apply online through the Vidya Lakshmi portal or visit a BOI branch for further details and loan processing.
Eligibility Criteria: Indian students admitted to recognised institutions in India or abroad.
Loan Amount: ₹50,000 – ₹50 lakh.
Interest Rate: Starts at 8.40% per annum.
Tenure: Up to 15 years.
Processing Fees: Nil for domestic studies.
Features:
- Covers tuition, hostel, books, and travel expenses.
- No margin money required for loans up to ₹4 lakh.
- Special Star Education Loan for eligible students.
- Tax benefits under Section 80E.
- Quick processing and minimal documentation.
10. Federal Bank Education Loan
Federal Bank provides education loans with interest rates starting from 13.20% per annum. The loan covers tuition fees, hostel expenses, books, and travel costs for students studying in India and abroad.
The repayment tenure extends up to 15 years. The bank offers collateral-free loans up to a certain limit for eligible students. Tax benefits under Section 80E apply. The Federal Bank also provides pre-admission sanction letters to students.
The application process is simple, with quick loan approvals. Students can apply online or visit a Federal Bank branch for further details and assistance with the loan process.
Eligibility Criteria: Indian students enrolled in recognised institutions in India or abroad.
Loan Amount: ₹50,000 – ₹50 lakh.
Interest Rate: Starts at 13.20% per annum.
Tenure: Up to 15 years.
Processing Fees: Varies based on loan amount.
Features:
- Covers tuition, hostel, books, and travel expenses.
- No collateral required for eligible students.
- Tax benefits under Section 80E.
- Instant loan approval for pre-verified students.
- Flexible repayment options and moratorium period.
Ending Thoughts
Education loans in India play a crucial role in making quality education accessible to students, enabling them to pursue higher studies without financial stress.
Educational Loans for students in India come with flexible repayment options, tax benefits, and coverage for various academic and living expenses, providing a comprehensive financial solution. Many banks offer collateral-free loans for eligible students, making it easier to secure funding. Additionally, the moratorium period allows students to focus on their studies before starting repayment.
By building a credit history and promoting financial independence, education loans empower students to invest in their future. With easy application processes and government-backed schemes, these loans continue to support aspiring professionals in achieving their educational and career goals, both in India and abroad.
FAQs
Who is eligible for an education loan in India?
Indian students pursuing higher education in India or abroad, with confirmed admission to a recognised institution, are eligible.
What expenses do education loans cover?
They cover tuition fees, accommodation, travel, books, exam fees, and other academic-related expenses.
What is the repayment period for education loans?
Repayment typically starts after the course completion, with a tenure of 5-15 years, depending on the loan provider.
Do education loans require a guarantor or collateral?
Loans above a certain amount may require a guarantor or collateral, depending on the bank’s policy.
