๐ Educational Loan in India 2025: Complete Guide for Students & Parents
Introduction
Education is becoming more expensive every year, and for many families in India, an education loan is the only way to make higher studies possible. Pursuing professional courses such as engineering, medicine, or management—whether in India or abroad—often requires financial support, and education loans provide the pathway.
This complete guide explains eligibility, documents, application steps, repayment rules, and government schemes related to education loans in India (2025 updated).
What is an Education Loan?
An education loan is financial support from a bank or NBFC that covers tuition fees, hostel fees, books, travel, and other study expenses.
There are two types:
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Secured Loan – requires collateral (property, FD, LIC policy, etc.).
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Unsecured Loan – does not require collateral, but usually comes with a smaller amount and higher interest.
Eligibility Criteria for Education Loan in India (2025)
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Applicant must be an Indian citizen.
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Age: 16–35 years (varies slightly by bank).
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Admission must be in a recognized course (UG/PG/professional).
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Institution must be recognized by AICTE/UGC/State Government/International Authority (for abroad studies).
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A co-borrower (parent/guardian) is usually required.
Documents Required for Education Loan
Before applying, prepare these documents:
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Previous academic records (marksheets, certificates).
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Identity proof (Aadhar, PAN, Passport).
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Address proof.
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Income proof of parent/guardian (salary slips, ITR, bank statements).
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Collateral documents (if secured loan).
✅ Quick Checklist: Keep scanned copies ready if applying online.
Top Banks Offering Education Loans in 2025
Here’s a quick look at some options:
| Bank | Loan Amount (Max) | Interest Rate (Approx) | Repayment Period |
|---|---|---|---|
| SBI Scholar Loan | ₹7.5 L – ₹1.5 Cr | 8.3% – 10% | Up to 15 years |
| HDFC Credila | Up to ₹40 L | 9% – 12% | Up to 15 years |
| Punjab National Bank | ₹10 L – ₹50 L | 8.5% – 10.5% | Up to 15 years |
| ICICI Bank | ₹10 L – ₹50 L | 9% – 11.5% | Up to 10 years |
๐ก Tip: Always compare processing fees, moratorium period, and margin money before deciding.
Government Schemes for Students (2025 Updated)
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Vidya Lakshmi Portal – One-stop platform for applying to multiple banks.
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Central Sector Interest Subsidy Scheme – Full interest subsidy for economically weaker students during study + moratorium period.
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State Schemes – Some states like Bihar, UP, and Tamil Nadu provide extra subsidies.
๐ Always check eligibility before applying.
Tax Benefits on Education Loan (Section 80E)
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Under Section 80E of the Income Tax Act, the interest paid on education loans can be claimed as a deduction.
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No maximum limit on deduction.
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Can be claimed for up to 8 years from the start of repayment.
Example: If you pay ₹50,000 as interest in one year, you can reduce your taxable income by ₹50,000.
How to Apply for an Education Loan (Step by Step)
Offline (Bank Branch)
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Visit your bank with admission and income documents.
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Fill the loan application form.
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Submit required documents.
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Bank verifies and sanctions loan.
Online (Vidya Lakshmi Portal)
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Register at www.vidyalakshmi.co.in.
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Fill Common Education Loan Application Form (CELAF).
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Choose up to 3 banks.
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Upload documents.
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Track loan status online.
Repayment Rules and Moratorium Period
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Moratorium period = Course duration + 6 to 12 months.
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Repayment starts after moratorium.
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Repayment tenure: 5–15 years depending on bank.
๐ก Tips to reduce burden:
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Start partial repayment (interest only) during course.
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Pay EMIs on time to avoid penalty.
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Choose longer tenure if unsure of early repayment.
Common Mistakes Students Make While Applying
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Not comparing banks.
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Ignoring hidden charges like processing fees.
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Applying without checking eligibility.
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Missing deadlines for government schemes.
Conclusion
Education loans can open doors to your dream career, but only if you plan wisely. Always compare options, understand repayment rules, and use government subsidies to reduce the burden.
FAQs
Q1: What is the maximum education loan amount in India?
Most banks offer up to ₹10–₹20 lakh for studies in India and up to ₹1.5 crore for studies abroad.
Q2: Can I get a loan without collateral?
Yes, up to ₹7.5 lakh is possible without collateral (varies by bank).
Q3: How long does it take to process a loan?
Usually 7–15 working days if documents are complete.
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๐ If you are from a small town, don’t miss our upcoming article: “How Students from Small Cities Can Secure an Education Loan Easily”
