Education is one of the most valuable investments a person can make for their future. With rising tuition fees in India and abroad, many students depend on education loans to pursue higher studies. In 2025, Indian banks and NBFCs are offering affordable education loans with low interest rates, flexible repayment options, and government subsidies to make higher education accessible.
This article covers how education loans work, eligibility, documents required, best banks, interest rate comparison, and repayment options to help students and parents make the right decision.
What is an Education Loan?
An education loan is a type of financial aid provided by banks and NBFCs to students for pursuing higher education in India or abroad. The loan covers:
- Tuition fees
- Hostel & living expenses
- Books & study material costs
- Travel expenses (for abroad studies)
- Other academic charges
Repayment usually starts 6–12 months after course completion or employment (moratorium period).
Why Choose an Education Loan?
✅ Benefits:
- Covers up to 100% of study expenses
- Available for studies in India & abroad
- Tax benefits under Section 80E of Income Tax Act
- Subsidy schemes for economically weaker sections
- Builds financial independence for students
❌ Drawbacks:
- Requires co-applicant (parent/guardian) in most cases
- Interest keeps adding during moratorium
- Risk of debt if job placement is delayed
Types of Education Loans in India
- Domestic Education Loan – For studying in Indian institutions
- Overseas Education Loan – For higher studies abroad (USA, UK, Canada, etc.)
- Undergraduate Loan – For graduation courses in India or abroad
- Postgraduate Loan – For advanced studies like MBA, MS, PhD
- Career Development Loan – For professional courses, certifications, or skill development
Top Banks Offering Education Loans in India 2025
1. SBI Education Loan (Global Ed-Vantage)
- Interest Rate: 8.15% – 10.50% p.a.
- Loan Amount: Up to ₹1.5 Crores (for abroad studies)
- Tenure: Up to 15 years
- Features:
- Covers tuition, travel, and living expenses
- No collateral required up to ₹7.5 Lakhs
- Moratorium: Course duration + 1 year
2. HDFC Bank Education Loan
- Interest Rate: 9% – 13% p.a.
- Loan Amount: Up to ₹45 Lakhs (India), ₹1 Crore (abroad)
- Tenure: 1 – 15 years
- Features:
- Pre-approved loans for selected institutes
- Quick approval within 48 hours
- Loan against collateral for higher amounts
3. ICICI Bank Education Loan
- Interest Rate: 8.75% – 12.50% p.a.
- Loan Amount: ₹10 Lakhs – ₹1 Crore
- Tenure: Up to 10 years
- Features:
- Loan covers 100% of educational expenses
- Repayment holiday up to 1 year
- Flexible EMI options
4. Axis Bank Education Loan
- Interest Rate: 9% – 13% p.a.
- Loan Amount: Up to ₹75 Lakhs
- Tenure: 5 – 15 years
- Features:
- Easy financing for domestic & overseas studies
- Insurance cover for students available
- Quick processing for premium institutes
5. Kotak Mahindra Bank Education Loan
- Interest Rate: 9.25% – 13% p.a.
- Loan Amount: Up to ₹40 Lakhs
- Tenure: Up to 10 years
- Features:
- No margin money for select institutes
- Covers tuition + hostel expenses
- Moratorium available
Top NBFCs Offering Education Loans
1. Avanse Financial Services
- Interest Rate: 10% – 16% p.a.
- Loan Amount: ₹1 Lakh – ₹75 Lakhs
- Tenure: Up to 10 years
- Features: Tailored for foreign education aspirants
2. InCred Finance
- Interest Rate: 10% – 18% p.a.
- Loan Amount: ₹2 Lakhs – ₹60 Lakhs
- Features: 100% funding without margin requirement
3. Credila (HDFC Subsidiary)
- Interest Rate: 9% – 13.5% p.a.
- Loan Amount: Up to ₹1 Crore
- Features: Special schemes for top global universities
Education Loan EMI Comparison (Example ₹20 Lakhs Loan, 10 Years Tenure)
| Bank/NBFC | Interest Rate (p.a.) | Approx. EMI |
|---|---|---|
| SBI (Global Ed) | 8.5% | ₹24,700 |
| ICICI Bank | 9% | ₹25,300 |
| HDFC Credila | 9.25% | ₹25,500 |
| Axis Bank | 9.5% | ₹25,700 |
| Avanse (NBFC) | 11% | ₹27,500 |
Eligibility Criteria
- Age: 18 – 35 years
- Nationality: Indian citizen
- Admission: Secured admission in recognized institution (India/abroad)
- Co-applicant: Parent/guardian required
- Credit Score: 650+ preferred (of co-applicant)
Documents Required
- Admission letter from college/university
- Mark sheets of previous education
- ID proof (Aadhaar, PAN, Passport)
- Address proof
- Income proof of co-applicant (salary slips, ITR)
- Bank statements (6 months)
- Collateral documents (if applicable)
Step-by-Step Process to Get an Education Loan
- Check eligibility with banks/NBFCs
- Secure admission to an eligible institution
- Compare lenders for interest rates and benefits
- Submit application & documents
- Loan approval & sanction letter issued
- Disbursal – Funds paid directly to the institution or student account
- Repayment starts after moratorium period
Repayment Options
- Standard EMI – Fixed monthly payments
- Step-up EMI – Lower EMIs initially, higher later when earning increases
- Partial Interest during study – Pay simple interest during course, EMIs start after
Tips to Get the Best Education Loan
- Apply with a strong co-applicant (good credit score)
- Choose government interest subsidy schemes if eligible
- Compare domestic vs. NBFC lenders for better terms
- Apply early to avoid delays before admission deadlines
- Use tax benefits under Section 80E
FAQs
1. Do education loans cover living expenses?
👉 Yes, most loans cover tuition + living + travel costs.
2. Can I get a loan without collateral?
👉 Yes, up to ₹7.5 Lakhs from banks, and higher from NBFCs.
3. When do I start repaying my education loan?
👉 After course completion + 6–12 months (moratorium period).
4. What is the maximum loan amount I can get?
👉 Up to ₹1.5 Crores for abroad studies (SBI).
5. Can I claim tax benefits on education loans?
👉 Yes, under Section 80E, you can claim tax deduction on interest paid.
Conclusion
An education loan in India 2025 can open doors to higher studies in India and abroad without putting financial pressure on families. With banks like SBI, HDFC, ICICI, Axis, and Kotak, and NBFCs like Avanse, InCred, and HDFC Credila, students can access tailored loan options.
Choosing the right lender depends on your study destination, loan amount needed, repayment capacity, and collateral availability. With proper planning, an education loan can turn your academic dreams into reality.
