How to Get an Education Loan

Dreaming of studying in India or abroad but worried about finances? An education loan can make it happen.

In 2025, education loans in India have become more accessible, thanks to digital platforms, flexible terms, and supportive government schemes.

Whether you’re heading to IIT, IIM, or planning to study overseas, this step-by-step guide will walk you through how to get an education loan in India.

Step 1: Know What You Need the Loan For

Before you even approach a bank or lender, make a list of your expected expenses. This can include:

• Tuition fees
• Accommodation/hostel charges
• Books and study materials
• Laptop or equipment costs
• Travel expenses (for studying abroad)
• Insurance and visa fees

Knowing how much you need and why will help you choose the right loan and lender.

Step 2: Check Eligibility Criteria

Each lender has its own set of eligibility conditions, but in general, you’ll need to meet these:

• You must be an Indian citizen
• You should have secured admission to a recognized institution (in India or abroad)
• A co-applicant (usually a parent/guardian) is required for most loans
• Age: 18 to 35 years (may vary slightly)

Step 3: Choose a Bank or NBFC

You can apply for an education loan from public sector banks (like SBI, Bank of Baroda), private banks (like HDFC, ICICI), or NBFCs (like Avanse, InCred, HDFC Credila).

Things to compare before choosing:

• Interest rates (starting from 8.5% p.a.)
• Loan amount (up to ₹50 lakh or more for overseas education)
• Processing fees
• Repayment holiday (moratorium period)
• Prepayment or foreclosure charges

Step 4: Gather the Required Documents

You’ll typically need the following:

For the student:

• Admission letter or offer from the institution
• Marksheets of 10th, 12th, and graduation (if applicable)
• Passport (for abroad studies)
• Proof of residence and ID

For the co-applicant (parent/guardian):

• Income proof (salary slips/ITR)
• Bank statements
• PAN card and ID/address proof

If the loan amount exceeds ₹7.5 lakh, banks may ask for collateral (property, FD, etc.).

Step 5: Apply for the Loan

You can apply online via the bank’s official website or visit a branch. NBFCs also offer quick online approvals with less paperwork.

Make sure to:

• Fill out the application form accurately
• Attach all necessary documents
• Choose your repayment tenure (up to 15 years in some cases)

Step 6: Wait for Sanction and Disbursal

After reviewing your documents, the bank will either approve or reject your loan. Once approved, you’ll receive a sanction letter that mentions the loan amount, interest rate, EMI schedule, and repayment terms.

Funds are usually disbursed directly to the educational institution in installments (as per their fee structure).

Step 7: Understand the Moratorium Period

Most education loans come with a moratorium period—this means you don’t need to repay immediately. Generally, repayment begins 6–12 months after course completion or once you secure a job (whichever is earlier).

However, some banks may charge simple interest or partial EMIs during the moratorium. Be sure to clarify this with your lender.

Step 8: Start Repaying on Time

Once the moratorium ends, start your EMI payments as agreed. Repaying on time not only keeps your credit score healthy but also builds trust with lenders if you plan to take future loans.

Bonus Tips for Students

• Apply under the Credit Guarantee Fund for Education Loans (CGFSEL) to avoid providing collateral for loans under ₹7.5 lakh.
• Check for interest subsidies from the government if your family income is below ₹4.5 lakh/year.
• Use EMI calculators to plan your repayment well in advance.
• Some banks offer special discounts for girls or students going to top institutions.

Final Thoughts

Getting an education loan in India is easier than ever, thanks to a more streamlined process and digital support from banks and NBFCs. The key is to plan ahead—compare options, read the fine print, and only borrow what you truly need.

Education is an investment, and with the right loan, you can pursue your dreams without putting unnecessary stress on your family’s finances.