How Can You Get a Student Loan in India?


Receiving a quality education is mandatory to ensure a complete and successful life. It is quite similar to graduating from a renowned institution. Although the cost of education is escalating day by day, it is a worthy investment since it promises a good paying and bright career.

Today, one of the major hurdles encountered by students in achieving their objectives is affordability. As quite a few hail from a weak financial background, they will not be able to bear additional expenses to study overseas. However, financial assistance is provided in the form of scholarship schemes, grants, and work-study programs.

Education Loan Scheme

Luckily, some loans are exclusively meant for students to invest in education while helping them realize their potential. Reserve Bank of India had recently ordered each Scheduled Commercial Bank located in India to embrace the Education Loan Scheme. It aims at offering financial support to deserving individuals to pursue higher education in India and overseas with sound terms and conditions.

Getting Familiar with Student Loans

A student loan is defined as a sum of money borrowed from either a private lender or Government to fund post-graduation courses and higher studies. Normally, Government loans have a lower interest rate and they can be covered once the student is in a position to earn a monthly income. This waiting period is known as the Moratorium Period. Such types of loans are meant to cover tuition fees, travel expenses, accommodation, fees, books, and supplies as well as miscellaneous charges. The interest rate of a student loan might differ based on the country you reside.

The majority of the Indian Banks & NBFCs provide student loans to study in India and overseas. Listed below are some of the top Indian banks & NBFCs who offer student loans:–

  • State Bank of India
  • HDFC bank
  • Axis Bank

Eligibility Requirements for a Student Loan in India

  • Applicant must be a permanent citizen of India
  • Applicant should fall under the age category 18-35 years
  • Applicant must have an exceptional academic record.
  • Securing admission from a renowned University/Institution is mandatory
  • Banks provide education loan only for certain courses

Salient Features and Advantages of Student Loans:

  • Availability of education loan to pursue studies within India and overseas
  • Maximum loan amount granted up to one crore
  • The repayment tenure is up to fifteen years
  • The interest rate is charged around 7.30% per annum
  • The moratorium period extends to about one year soon after completion of the course or securing a job after six months
  • Special concessions are provided to female students
  • Some of the acceptable collateral securities include commercial or residential property, fixed deposits, or insurance
  • Budget-friendly Equated Monthly Installments (EMI) repayment facilities available
  • Attractive tax benefit on the Interest paid under Section 80-E of the Income-tax act
  • Lenders grant loans before securing admission or application for a Visa. 

Disadvantages of a Student Loan:

  • The rate of Interest varies
  • The presence of a cosigner is highly essential to repay the debt if you are unable to pay it on time.

Supporting Documents Required to Secure a Student Loan

  • Properly filled loan application form
  • Latest photograph of both the applicant and co-applicant
  • Age proof
  • Photo ID (Driving license, voter ID, PAN, or Aadhaar)
  • Address proof
  • Signature proof
  • Proof of admission
  • Mark list (10th, 12th/graduation/IELTS, TOEFL or GRE)
  • Monthly income proof of the co-applicant
  • Bank statement of previous six months
  • Duly filed Income tax return of the previous two years
  • An audited balance sheet of the last two years
  • Sufficient collateral documents 

Application for Education Loan in India

Today, the majority of the banks disclose details regarding student loans on their official website. However, it is better to approach the bank straight or call them to fetch additional details. It is highly recommended to execute the loan application process as early as possible since it would take adequate time to get approval and disbursal of the loan.

It is advisable to compare the student loans provided by various banks before selecting a lender. Loans are offered for short-term and full-time courses. Thorough research and in-depth analysis would help you choose an apt lender.

Online Application: An application form could be filled online by attaching relevant documents. Submit it through the official website of a lender. There are quite a few banks that offer virtual assistants to assist the students in completing the application procedure.

Offline:  It can be executed by paying a visit to the nearby branch office with essential documents and a properly filled application form.

As soon as the loan gets approved, the concerned banks furnish a loan document that features several elements of the loan. Once the loan document is signed, banks would grant the loan amount on an installment basis.

Factors to be Taken into Consideration Before applying for a Student Loan

Loans are defined as borrowed money and with the hope that it will be repaid with interest. However, there are certain elements of risk involved in it. Default payments might have a drastic impact on the credit score while making it complicated to apply for loans in the long term. So keep the following things in mind before applying for a student loan.

  • Attend a career counseling session to gain a deep insight into the career landscape in various departments.
  • Search for a renowned University with a fair ranking
  • Educational requirements for different fields of study
  • Select a degree that guarantees a job and a steady income to repay the loan amount 


A student loan is regarded as good debt since it is a worthy investment and will soon pay off in the future. Students will be able to focus on their studies and need not fret about finances. Moreover, obtaining student loans would help generate an excellent credit score as well. If you succeed in fetching a good credit score, you will be able to secure other loans like home loans or car loans, etc.


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