How to get an education loan from Banks in India? There are 5 easy steps through which you can apply for a loan in the banks.
How to Apply for Education Loan: Education loans have become an important financial assistance for those students who are willing to pursue higher studies. Many students come from middle class families. So, it is very crucial to get an education loan to sustain their higher studies.
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| 5 Steps to Get an Education Loan in India (2025) |
The purpose of an education loan is to ensure that students can fulfill their academic dreams without any financial problems.
| Post Name | 5 Steps to Apply for Education Loan in 2025 |
| Category | Loans |
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In this article, we are going to know the ‘5 steps to get an education loan’. If you are also willing then make sure you complete these five criterias for applying for an education loan.
“A loan is not a burden, but an investment in your future.”
Step 1: Check Eligibility Criteria
If you want to apply for an education loan then It is very crucial to meet the eligibility requirements set by banks and financial entities. Most of the loan criterias are given below-
Basic Eligibility Requirements
- The applicant must be a citizen of India.
- The students must have taken admission to a recognized institution in India or abroad.
- Some Courses that are eligible: Undergraduate, postgraduate (PG), diploma, and other professional courses.
- For students, co-applicant (parent/guardian) is mandatory for loans crossing a certain amount.
Education Loan Amount and Repayment Period
|
Type of Loan |
Repayment Period |
Loan Amount (Approx.) |
|
Overseas Education Loan |
15-20 years |
Up to INR 50 Lakhs |
|
Education Loan (in India) |
10-15 years |
Up to INR 10 Lakhs |
Step 2: Select the Best Bank and Loan Scheme
There are many banks which are providing their services across the country. You must select the right bank before applying for an education loan. Because, Interest rates and other benefits vary from bank to bank. There are also some NBFCs which offer education loans. So, it is crucial to compare loan schemes before going to the final decision.
Education Loan Interest Rates & Processing Fees (Bank-wise) (2025)
We have compiled a table of different banks and their interest rate on education loans:
|
Bank |
Interest Rate (p.a.) |
Processing Fees |
|
State Bank of India |
8.05% – 11.75% |
No charges for loans below ₹20 lakh; ₹10,000 + taxes for loans above ₹20 lakh |
|
Punjab National Bank |
4.00% – 12.75% |
- India: Nil - Abroad: 1% (Min ₹10,000, refundable after first disbursement) - PNB Pravasi Shiksha Loan: 1% (Min ₹10,000, non-refundable) |
|
IDFC FIRST Bank |
9.50% onwards |
Up to 1.5% of the loan amount |
|
Bank of Baroda |
8.15% – 12.50% |
No charges up to ₹7.50 lakh; 1% (Max ₹10,000) for higher amounts |
|
Canara Bank |
9.25% |
- 100%+ collateral coverage: 0.50% (Max ₹10,000) - Less than 100% coverage: 0.50% (Max ₹20,000) |
|
Bank of Maharashtra |
8.10% – 11.30% |
Nil |
|
HDFC Bank |
9.50% onwards |
Up to 1% for loans above ₹7.50 lakh |
|
Indian Overseas Bank |
9.75% – 10.25% |
Contact the bank |
|
ICICI Bank |
10.25% onwards |
Up to 2% of the loan amount + GST |
|
Karnataka Bank |
10.48% onwards |
Contact the bank |
|
Tamilnad Mercantile Bank |
11.75% – 13.00% |
No fee for studies in India; 1% for studies abroad |
|
Karur Vysya Bank |
12.05% – 14.55% |
- Loans above ₹7.50 lakh: ₹5,000 + GST - 783 Product: ₹10,000 + GST |
|
Axis Bank |
13.70% – 15.20% |
Contact the bank |
|
IDBI Bank |
8.55% – 11.15% |
- India: Nil - Abroad: 1% (Max ₹5,000) |
|
Bank of India |
11.05% – 11.85% |
No fee for studies in India |
|
UCO Bank |
11.30% – 11.70% |
0.50% (Max ₹10,000) + GST |
|
Federal Bank |
12.55% onwards |
Contact the bank |
|
Kotak Mahindra Bank |
Up to 16.00% |
Nil |
For more details, you can visit the your respective banks
Key points While Selecting a Loan:
- Interest rate: Must Choose a bank with lower rates and flexible repayment options.
- Moratorium period: There are also some banks that offer a repayment holiday until the course is completed.
- Processing fees & other charges: Must check for hidden fees.
Step 3: Documents Required for Education Loan
If you have all relevant documents in handy position then it will precipitate the approval process. We have provided a list of essential and required documents which are crucial while applying for an education loan.
Documents for Applying an Education Loan
- Applicant’s Documents:
- Academic records (mark sheets, certificates, entrance exam results)
- KYC documents (Aadhaar, PAN, passport, etc.)
- Admission proof (offer letter from university)
- Co-applicant (Parent/Guardian) Documents:
- Income proof (salary slips, ITRs, bank statements)
- KYC documents
- Collateral security (if required for higher loan amounts)
Step 4: Apply for Education Loan
Once all the required documents are ready, the next step is to apply and submit the education loan application to your respective bank.
Modes of Loan Application:
- Online Application: There are many banks that offer an online loan application process via their websites, apps or portals..
- Offline Application: You can also visit the nearest bank branch and submit all the documents that are required for loan application.
- Government Loan Portals: All students can also apply through Vidya Lakshmi Portal, which allows you to apply for multiple banks at once..
Education Loan Approval Process
- In the Loan approval process, the Bank verifies the application and all your documents.
- Personal discussion or telephonic verification may be conducted.
- After loan approval, banks will issue the sanction letter to you..
- Loan disbursement is made directly to the educational institution.
Step 5: Loan Repayment and Tax Benefits
You also have a proper knowledge about the loan repayment and other tax benefits that you can attain through this process.
Loan Repayment Options
Loan Repayment typically commences 6-12 months after course completion. The main available options include:
- EMI-based repayment (monthly payments based on interest rate and tenure)
- Part-payment or prepayment options (to reduce interest burden)
- Moratorium period benefit (only simple interest is charged during this period)
Tax Benefits on Education Loans
- Under Section 80E of the Income Tax Act, the interest paid on an education loan is eligible for deduction.
- No upper cap on the amount of interest deduction.
- The deduction is available for a maximum of 8 years or until the loan is fully repaid.
Key Takeaways
- Before applying for the education loan you must check the eligibility criteria and loan limits.
- Compare the banks based on interest rates, repayment options, and processing fees.
- You must prepare all required documents to avoid delays in loan approval.
- Apply education loans through online portals or banks to get quick approvals.
- Take advantage of tax benefits under Section 80E to save on interest payments.
“Borrow responsibly today, so you can build a better tomorrow.”
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Conclusion
You can secure an education loan with proper planning, full comparison between bank, and other available options. By following these 5 essential steps, students who aspire for their higher studies can ensure a smooth application and approval process.
So, choose the right bank or financial entity, understand the loan repayment terms, and leverage the tax benefits that can significantly lessen the financial burden of higher education.
Lastly, with the perfect strategy and informed decision making, an education loan can be a milestone for a brighter academic and professional future.
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