Higher education is a major step in shaping one’s career, but it often comes with significant financial costs. From tuition fees to living expenses, managing finances can be challenging. That’s where loans for students play a critical role. These loans help students pay for their studies and related costs, ensuring that money doesn’t become a barrier to success.
In this article, we will break down everything you need to know about loans for students—types, interest rates, repayment terms, eligibility, and more.
What Are Loans for Students?
Loans for students are financial products designed to help learners pay for educational expenses. These loans usually cover tuition fees, books, accommodation, travel, and other essential needs. Unlike regular loans, student loans often come with easier eligibility criteria and flexible repayment options.
These loans can be offered by:
- Government bodies
- Private banks
- Non-banking financial companies (NBFCs)
- Cooperative institutions
Some institutions even collaborate with educational institutes to provide special loan schemes for their students.
Types of Loans for Students
Understanding the different types of loans for students is key before applying. Here are the common categories:
| Loan Type | Offered By | Coverage | Interest Rate |
|---|---|---|---|
| Government Student Loans | Central or State Governments | Full or partial tuition and expenses | Low and subsidized |
| Private Student Loans | Banks, NBFCs | Tuition, books, living costs | Moderate to high |
| Institutional Loans | Colleges/Universities | Limited tuition assistance | Very low or 0% |
| Skill Development Loans | Public or private lenders | Fees for vocational or skill training | Moderate |
Eligibility Criteria for Student Loans
Though every lender may have unique conditions, here are some standard eligibility requirements for loans for students:
- Applicant must be an Indian citizen
- Must have secured admission in a recognized institute in India or abroad
- Courses should be professional, technical, or vocational
- Co-applicant (usually parent or guardian) may be required
- For international education, universities should be recognized globally
Interest Rates on Loans for Students 2025
Interest rates for loans for students can vary based on the lender, type of course, and academic institute. Some government-backed loans offer subsidized interest, especially for female students and economically weaker sections.
| Lender | Min Rate | Floating | Fixed | Women & Special Offers | Loan Products & Loan Amount |
|---|---|---|---|---|---|
| SBI Education Loan | 7.15%–7.90% | ✓ (EBR-linked) | ✗ | 0.50% women concession on select schemes | Student Loan (≤₹50 L): 10.15% without collateral Scholar Loan (IIT/IIM): 7.15–7.90% <br>Global Ed‑Vantage: ₹7.5 L–₹3 Cr at 9.15% (with collateral) | |
| Axis Bank | 9.99%–10.50% | ✗ (MCLR-linked) | ✗ (all MCLR) | Shakti Loan for Women: 13.70–15.20% | Prime Domestic: up to ₹50 L; Prime Abroad: similar amounts; unsecured up to ₹50 L |
| ICICI Bank | ~9.50% onwards | ✓ (EBLR-linked) | ✓ (domestic fixed) | No stated women-specific rate | Domestic up to ₹50 L, international up to ₹1 Cr |
| Bank of Baroda | 7.10% | ✓ (BRLLR-linked) | ✗ | 0.50% concession for women & defense children | Multiple schemes: – Premier Institutes: from 7.10% – Gyan/Scholar: 9.15–11.15% |
| HDFC Credila | ~9.75% | ✓ (CBLR + spread) | ✗ | Offers women-specific products; no collateral up to ₹75 L | Unsecured loans up to ₹1 Cr, pre-visa disbursal for US/Canada/Germany |
| Union Bank of India | ~9.30%–11.30% | ✓ (Repo-based) | ✗ | Not specified | Premier institutes abroad: ₹7.5 L–₹1.5 Cr at 9.30–10.80% |
🔍 Highlights & Insights
- Lowest Rates:
SBI-Scholar Loan (7.15–7.90%) and Bank of Baroda’s premier scheme at 7.10% offer the lowest rates in the sector. - Floating vs Fixed:
Most banks offer floating rates linked to benchmarks like EBR, BRLLR, or MCLR. Axis provides only floating rate. ICICI is among the few offering fixed-rate options for domestic studies. - Women & Special Concessions:
SBI, BoB, and Credila offer a 0.5% interest concession for women. BoB adds defense children discounts, and Credila includes women-specific products. - Loan Ranges:
- SBI: Domestic up to ₹50 L; Abroad up to ₹1.5 Cr (Global Ed‑Vantage).
- Axis: Up to ₹50 L unsecured; higher with collateral.
- ICICI: Up to ₹1 Cr for foreign studies.
- BoB: Up to ₹1.5 Cr under premier schemes.
- Credila: Unsecured up to ₹1 Cr; collateral not required for many applications.
- Union Bank: ₹7.5 L–₹1.5 Cr for select institutes abroad.
- Special Features:
- Credila offers pre-visa disbursal.
- Axis provides scheme-only lending based on MCLR.
- Union Bank, BoB, and SBI offer public sector-backed concessions and wide coverage for premier/global programs.
✅ Quick Recommendations
- Low-cost domestic/international studies:
Choose SBI Scholar Loan or BoB premier scheme for the best rates. - Need a fixed-rate option:
Consider ICICI for predictable EMI budgeting. - Unsecured, pre-visa support, and women-focused schemes:
Go with HDFC Credila for flexible, fast processing. - Larger sums or premier institutions:
Opt for Union Bank or BoB for coverage up to ₹1–1.5 Cr.
Note: Interest rates are indicative and may vary based on the applicant’s profile.
EMI Calculator
Loan Coverage and What’s Included
When opting for loans for students, most lenders provide coverage for the following:
- Tuition and admission fees
- Examination and library fees
- Laboratory and equipment charges
- Hostel or off-campus rent
- Books, laptop, stationery
- Travel (especially for overseas education)
- Insurance (if applicable)
It’s important to read the loan agreement carefully to know exactly what is covered and what’s not.
Repayment Terms and Moratorium Period
One of the key benefits of loans for students is the moratorium period—a time when the borrower is not required to make any repayment. This usually covers the course duration and an additional 6 to 12 months after course completion.
Repayment tenure ranges from 5 to 15 years. Here’s a quick look at repayment terms from various lenders:
| Lender | Repayment Tenure | Moratorium Period |
|---|---|---|
| SBI | Up to 15 years | Course + 1 year |
| HDFC Credila | Up to 10 years | Course + 6 months |
| PNB | Up to 15 years | Course + 1 year |
| Axis Bank | Up to 15 years | Course + 6 months |
Timely repayment helps build a strong credit history, which can be useful for future loans and credit needs.
How to Apply for Loans for Students
Applying for loans for students is a step-by-step process:
- Check Eligibility: Go through the lender’s criteria.
- Prepare Documents:
- Admission letter
- KYC documents
- Academic records
- Income proof of co-applicant
- Compare Lenders: Use online tools to evaluate offers.
- Apply Online or In-Person: Depending on lender.
- Loan Sanction and Disbursement: After verification, the loan amount is sanctioned and paid directly to the institute or to the applicant.
Benefits of Loans for Students
- Access to Higher Education: Funds available regardless of financial background.
- Flexible Repayment: Repayment starts after course completion.
- Tax Benefits: Interest payments eligible for tax deduction under Section 80E.
- Credit Building: Helps in developing early credit history.
Things to Consider Before Applying
Before choosing a loan, here are a few critical checks:
- Compare interest rates and charges
- Understand repayment terms
- Check hidden fees (processing fees, prepayment charges)
- Read the loan agreement carefully
- Assess the reputation of the lender
FAQs
A. An education loan helps students pay for tuition, hostel fees, books, equipment, travel, and sometimes insurance or return tickets for studies abroad
A. Must be an Indian national, aged roughly 16–35. Admission confirmation is required.
A co-applicant (usually parent/guardian) with good income or credit score is needed. A guarantor is required for loans above ₹4–7.5 lakhs
A. Loans up to ₹4 lakhs usually don’t need collateral, but a co-applicant is still necessary.
For loans up to ₹7.5 lakhs, collateral may be waived under the IBA’s CGFEL scheme
A. Interest rates depend on the bank, loan amount, tenure, and collateral. They are typically lower than personal loans. Rates may be fixed or floating, and lenders often charge simple interest during the moratorium
A. The moratorium (no-EMI) period lasts for the course duration plus 6–12 months after completion.
Secured loans may have waived interest; unsecured ones may require interest payments during this period
A. Yes, girls often get a 0.5% interest rate benefit.
SC/ST students may also receive relaxed clauses or lower margin money
A. Required documents typically include:
– Identity, address proof, PAN card, Aadhaar
– Academic records and admission letter
– Income proof of co-applicant
– Collateral documents if the loan is large
A. Tenures usually range from 5 to 15 years post-moratorium.
Many loans allow early prepayment without penalty, though some may charge for foreclosure .
A. Late payment can harm your CIBIL score. Secured loans may lead to asset seizure; lenders may restructure loans for hardship cases
A. Yes, switching to a lower-interest lender is possible but may come with refinance charges. Always weigh fees against potential savings .
Conclusion
Loans for students are a lifeline for many aspiring professionals who wish to pursue quality education without financial stress. By understanding the types, benefits, eligibility, and repayment terms, students and their families can make informed decisions. A well-planned loan can be the stepping stone to a brighter and financially secure future.
Whether you’re planning to study in India or abroad, make sure to research and compare options to find the most suitable loan for students tailored to your needs.
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