Complete Guide To Education Loan

Education is the passport to the future, for tomorrow belongs to those who prepare for it today. It is imperative that children must be thought how to think first than what to think. However, in India, Education, though very valuable, is a complex system. Nothing is more important than a quality education. With more and more Indians choosing to pursue their education abroad, lending institutions are keen on providing the best possible financing options to suit every student’s needs. 

Financing higher education in a foreign country is a daunting task to think and plan for any middle-tier family in India. Along with regular tuition fees, families also have to bear boarding and lodging costs, books, travel and other related expenses for the student. This is where an education loan plays a very important role. Education Loan is generally given out by banks at attractive interest rates to finance higher studies in reputed institutions abroad. Education loans generally cover a vast number of expenses inclusive of fees, equipment, books, hostel fees, travel, examination fees, etc., for students. Education Loan covers studies in India as well, with students opting for either graduation or post-graduation courses.

The Education loans in India are generally offered in specific slabs: a) Below Rs.4 lakhs, b) Between Rs.4 lakhs and Rs.7.5 lakhs and c) Above Rs.7.5 lakhs.

The Student Loans have certain eligibility criteria to be met as detailed below; Let’s take a look;

  • The candidate must be an Indian Resident.
  • The candidate / applicant must have confirmed admission in recognised educational institutes in India or abroad.
  • The applicant must be between 18 to 35 years old, during loan application.
  • He/she must be undergoing a graduate/postgraduate degree or a PG diploma.
  • The applicant should have a secured admission in a college or university affiliated by UGC/AICTE/Govt. etc.
  • Students pursuing full-time courses need to have a co-applicant who can be either parent/guardian or spouse/parent-in-law (in case of married candidates).

Before applying for the Education Loan In India, there is a specific set of documents required by banks for sanction of Education loans. Following are the papers that need to be furnished by a student loan applicant.

  • Proof of age, school certificates
  • Proof of permanent address
  • Proof of identity, passport, voter ID, driving license etc.
  • Income proof of co-applicant/guarantor
  • Optional guarantor form, duly filled
  • Copy of admission letter to education course
  • Bank account statements of co-applicant if required by the bank


The Education Loan interest rate on student loan varies from Bank to Bank in India. Each Bank has its own rate of interest based on the particulars of the applicant as well as the Student Loan amount. Generally, the base rates of banks fall within the bracket of 8% to 10%. As such, the final rate of interest charged on the loan ranges between 8.30% p.a. to 12.25% p.a. In some cases, the educational institute where the student has secured admission is also a decisive factor while fixing the interest rate.

The education loan interest rate calculator is an online tool which enables an applicant to know what would be the interest he would be paying on his loan acquired.  Different banks offer different rates of interest. The education loan interest calculator is 100% fast, simple and an extremely user friendly interest calculator, available online.

Amongst the many leading banks in the country which offer education loans, the HDFC Bank is second to none. HDFC offers students an opportunity to pursue their dreams and pursue a course of study of their choice with comprehensive education loan products. HDFC education loans can be availed with preferential interest rates for financing admissions in premier institutions in India and abroad with doorstep service for borrowers. Borrowers are also entitled to tax rebates for the interests they will pay on education loans under Section 80-E of the Income Tax Act 1961.

The Education Loan Interest Subsidy Scheme is specially designed to provide Interest Subsidy, for the waiting period before commencing repayment, on educational loans taken by students from Economically Weaker Sections from our Bank under the educational loan scheme of the Indian Banks’ Association to pursue further education. 


Education Loan – Frequently Asked Questions


Questions Answers
What is an Education Loan? Education Loan is a loan offered by banks to help students pursue higher education, either in India or Overseas.
Who is eligible for an Education Loan Any Indian National, between 16-35 years of age, with a confirmed admission in an institution of his choice, can avail of education loan.
What are the courses for which an education loan can be availed? Education loan can be availed for all courses following under UGC in India.
Is a co-applicant required for an education loan? Yes. A co-applicant is required. Either  a parent, guardian or spouse can vouch for as a co-applicant
What is the Maximum limit of loan which can be expected under education loan. For studies within India, lenders may approve 10-15 Lakhs while for overseas education, it could range anywhere between 20-25 Lakhs.