An education loan in India helps students finance eligible higher-education expenses such as tuition fees, examination charges, hostel costs, books, equipment and other approved study-related expenses. Eligibility, interest rates, loan limits, collateral requirements and repayment terms depend on the lender and loan scheme. This 2026 guide explains how education loans work, who can apply, which documents are generally required, how to apply, government-supported options, repayment and tax benefits.
Originally published: 25 August 2025 | Last updated: 29 September 2026 | Applies to: Education loans in India
Important: Education-loan interest rates, loan limits, eligibility requirements, collateral rules and government schemes can change. Always verify the latest terms on the lender's official website or the relevant government portal before submitting an application.
Quick Answer: How to Apply for an Education Loan in India
To apply for an education loan in India, first secure admission to an eligible recognised course or institution, estimate the amount you need, compare suitable loan schemes, prepare the required academic and financial documents, submit the application through the lender or the relevant government loan portal, complete verification, and wait for sanction and disbursement.
The exact process varies by lender. Some education loans can be applied for online, while others may involve branch-level verification or additional documentation. Government-supported digital routes such as the PM Vidyalaxmi portal can also be used by eligible students.
Why Education Loans Matter in India
Higher education can involve substantial tuition, accommodation, examination, books, equipment and other study-related costs. Scholarships and grants can reduce the amount a student needs to borrow, but an education loan can help cover eligible expenses that are not fully met through scholarships or family savings.
Depending on the lender and the course, education-loan financing may cover expenses such as:
- Tuition and examination fees
- Hostel and accommodation charges
- Books, equipment, instruments and other essential study material
- Computer or laptop expenses where permitted by the loan scheme
- Project work, study tours or other eligible academic expenses
- Travel or passage expenses for eligible overseas education
For example, SBI's current Student Loan page lists tuition, hostel, examination, library and laboratory fees, books and equipment, certain computer expenses, project work and travel expenses for eligible overseas studies among expenses that can be considered under its scheme.
Who Can Apply for an Education Loan?
There is no single education-loan eligibility rule for every bank. Eligibility depends on the lender, loan scheme, course, institution, study destination, loan amount and the applicant's financial profile.
Common requirements can include:
- Admission to an eligible recognised institution or course
- Meeting the lender's course and institution conditions
- A parent, guardian or other eligible person acting as co-borrower where required
- Acceptable academic and financial documentation
- Meeting lender-specific age, income, credit and security requirements
Students should not assume that a particular age limit, income limit or collateral rule applies to every education loan. Check the individual lender's current terms before applying.
Education Loan Eligibility: What Banks Usually Check
When processing an education loan, the lender may evaluate several factors:
| Factor | What the lender may check |
|---|---|
| Admission | Whether the student has secured admission to an eligible course or institution. |
| Academic record | Previous marksheets, entrance results and other academic records where applicable. |
| Course | Whether the course is covered by the particular education-loan scheme. |
| Co-borrower | Parent, guardian or another eligible co-obligant, depending on the scheme. |
| Repayment capacity | Financial information relating to the co-borrower or applicant, where required. |
| Security | Collateral or other security requirements, depending on the loan amount and scheme. |
Steps to Apply for an Education Loan in India
Step 1. Compare Banks and Their Loan Schemes Do not compare lenders using interest rate alone. Compare the complete terms of the loan, including interest rate, whether the rate is floating, processing charges, margin requirements, collateral, moratorium, repayment period, eligible courses, eligible institutions and expenses covered.
Major education-loan providers include public-sector banks, private-sector banks and specialised education-finance institutions. Terms vary significantly between schemes, so the same lender may have different conditions for different student profiles.
Examples include SBI education-loan schemes, PNB education-loan schemes and Canara Bank education-loan products. Private lenders also offer education financing, particularly for certain domestic and overseas courses.
For current lender-specific terms, always use the official lender pages rather than relying only on third-party comparison articles.
Step 2. Check Your Eligibility Before You Apply Before completing an application, confirm:
- Your admission is to an eligible institution and course.
- The loan scheme covers your study destination.
- Your proposed loan amount is within the scheme's applicable limits.
- You understand whether a co-borrower is required.
- You understand the applicable collateral or guarantee conditions.
- You can provide the required financial and academic documents.
Step 3. Prepare the Required Documents The exact checklist varies by lender. However, the following documents are commonly requested.
| Document Type | Why it may be required |
|---|---|
| Identity and address proof | To verify the student and co-borrower. |
| Class 10, Class 12 and other academic marksheets | To establish the student's academic record. |
| Admission or offer letter | To confirm admission to the course or institution. |
| Course fee structure | To determine the education expenses requiring financing. |
| Income documents of co-borrower | May be required for financial assessment. |
| Bank statements | May be requested for financial verification. |
| Collateral documents | Required only where the applicable scheme requires security. |
| PAN/Aadhaar and other KYC documents | May be required for identity, KYC and applicable government benefits. |
| Passport and other overseas-study documents | May be required for eligible study-abroad applications. |
SBI's official education-loan checklist, for example, includes academic records, admission proof, course expenses, co-borrower financial documents, bank statements and security documents where applicable.
Step 4.Submit Your Application Depending on the lender and scheme, students may be able to apply online, through a branch or through an official government-supported education-loan portal.
The government-backed PM Vidyalaxmi system provides an online route for eligible students seeking covered education loans and related interest-subvention benefits.
Official portal: PM Vidyalaxmi
The older Vidya Lakshmi information portal also provides official guidance and directs applicants to the PM Vidyalaxmi portal for education-loan applications.
Official information: Vidya Lakshmi – Important Links
Step 5. Loan Verification and Approval After submission, the lender may verify:
- Admission and course details
- Academic records
- Identity and KYC documents
- Income and financial information of the co-borrower
- Collateral or security documents, where applicable
- Other information required under the relevant loan scheme
There is no single approval timeline that applies to all education loans. Processing time depends on the lender, scheme, completeness of the application, verification requirements and whether additional security or documents are involved.
Step 6. Sanction and Disbursement If the loan is approved, the lender issues a sanction or approval document setting out the applicable terms and conditions.
Disbursement is generally made according to the lender's approved schedule and the educational expenses covered by the loan. In many cases, fee payments are made directly to the educational institution, while other eligible expenses are handled according to the scheme's terms.
Government Education Loan Schemes in India 2026
PM Vidyalaxmi Scheme PM Vidyalaxmi is a central-sector scheme launched by the Government of India to support students admitted on merit to designated Quality Higher Education Institutions (QHEIs).
Under the scheme, eligible students can obtain education loans without collateral or a third-party guarantee. The scheme also provides interest-subvention support for eligible students meeting the relevant family-income and other conditions.
The Ministry of Education has stated that students with annual family income up to ₹8 lakh can receive 3% interest subvention on education loans up to ₹10 lakh during the moratorium period, subject to the scheme's eligibility conditions. The government has also provided a 75% credit guarantee for education loans up to ₹7.5 lakh to support participating lenders.
The PM Vidyalaxmi portal is the official digital application platform:
Apply through the PM Vidyalaxmi Portal
The Government's July 2026 update states that the PM Vidyalaxmi portal had sanctioned 1,12,817 collateral-free and guarantor-free education loans between the scheme's launch and 21 July 2026. Because scheme coverage and institutional lists can change, students should check the current portal before applying.
Official government information: Ministry of Education / PIB – PM Vidyalaxmi Portal for Higher Education Loans
PM-USP Credit Guarantee and Interest-Subvention Schemes Students may also encounter other government-supported education-finance schemes, including the PM-USP Central Sector Interest Subsidy Scheme and the PM-USP Credit Guarantee Fund Scheme for Education Loans.
These schemes have their own institution, income, course, loan and eligibility conditions. Students should check the relevant official government information before assuming that a particular subsidy or guarantee applies to their loan.
Education Loan Interest Rates in 2026
There is no single education-loan interest rate in India. The applicable rate depends on the lender, loan scheme, institution, loan amount, collateral, borrower profile and other terms. Some lenders use floating rates linked to an external benchmark. For example, SBI's official Student Loan page currently displays an interest rate starting from 7.50% per annum, while SBI's education-loan rate page lists separate rates for different schemes. Those rates are scheme-specific and can change.
SBI also states that its education-loan rates are linked to an external benchmark and are floating for the loan period under the applicable schemes.
Official SBI sources:
PNB also publishes education-loan products with scheme-specific eligibility, collateral, repayment and interest-rate conditions. Its Digi Education Loan page describes a collateral-free digital education-loan route for eligible students and provides current scheme conditions on its official website.
Official PNB source: PNB Digi Education Loan
Do not rely on an old comparison table for interest rates. Bank rates are subject to change. Always check the lender's current official page before choosing or applying for a loan.
Is Collateral Required for an Education Loan?
Not always. Collateral requirements depend on the lender, loan amount, course, institution and the specific education-loan scheme.
Some education-loan products provide collateral-free financing up to specified limits or for eligible institutions. Other loans may require tangible security or a guarantee once the loan amount crosses the applicable threshold.
For example, SBI's Student Loan page states that loans up to ₹7.5 lakh under that scheme require a parent or guardian as co-borrower but no collateral security or third-party guarantee, while loans above ₹7.5 lakh require additional security under the stated conditions.
This should not be interpreted as a universal rule for every education loan in India. Different schemes can have different security requirements.
Education Loan for Study in India vs Study Abroad
| Education Loan for Study in India vs Study Abroad | Study in India | Study Abroad |
|---|---|---|
| Tuition fees | May be covered according to the lender's scheme. | May be covered according to the lender's overseas-study scheme. |
| Hostel/living expenses | May be covered where permitted. | May be included subject to lender conditions. |
| Travel | Usually depends on the specific scheme. | Some schemes include eligible travel or passage expenses. |
| Collateral | Depends on loan amount and scheme. | Depends on lender, loan amount and scheme. |
| Additional documents | Admission and academic documents are generally required. | Passport, admission, visa or other overseas-study documents may also be required. |
What Expenses Can an Education Loan Cover?
Covered expenses differ by lender, but eligible education-loan expenses can include:
- Tuition and examination fees
- Hostel and accommodation charges
- Library and laboratory fees
- Books, equipment and instruments
- Computer or laptop expenses where permitted
- Project work, thesis and study tours where eligible
- Other institution-related educational expenses
- Travel or passage expenses for eligible overseas study
- The amount that can be financed depends on the lender's scheme and the documented cost of education rather than a universal amount available to every student.
How Much Education Loan Can a Student Get?
There is no single maximum education-loan amount applicable to all banks and courses.
The eligible amount can depend on:
- Total course and related expenses
- Institution and course eligibility
- Study destination
- Loan scheme
- Collateral or guarantee structure
- Repayment capacity
- Lender-specific limits
For example, SBI publishes different loan limits for different courses and institution categories under its Student Loan and other education-loan products. PNB also publishes scheme-specific loan limits. Students should therefore compare the actual scheme rather than relying on a single generic maximum-loan figure.
Education Loan Repayment and Moratorium
Repayment conditions vary by lender and loan product.
A common structure includes a moratorium covering the course period plus an additional period after completion, but the exact period depends on the scheme.
For example, SBI's Student Loan page states that repayment can extend up to 15 years after the course period plus a 12-month repayment holiday, subject to the scheme's terms.
PNB's Digi Education Loan page states a maximum repayment period of 15 years and a moratorium period of the course period plus one year for that specific product.
These examples show why students should check the exact loan product instead of assuming that every education loan has identical repayment rules.
Should You Pay Interest During the Moratorium?
Some education loans accrue interest during the study or moratorium period. If a student or family services applicable interest during this period, the total amount that eventually becomes part of the repayment burden may be lower.
However, the financial effect depends on the lender's terms, rate, disbursement schedule and the student's ability to make payments during study.
Before deciding, ask the lender:
- Whether simple interest or another calculation method applies during the moratorium
- Whether unpaid interest is capitalised
- When EMI repayment begins
- Whether interest servicing during the moratorium provides any concession
Education Loan EMI Example
Consider an illustrative example of a ₹10 lakh education loan at an annual interest rate of 10% with a 10-year repayment period after the applicable moratorium.
Using a standard reducing-balance EMI calculation, the approximate EMI would be around ₹13,215 per month.
The actual EMI may differ because education loans can have different disbursement schedules, moratorium rules, floating interest rates, capitalisation methods and repayment structures.
Illustration only: T*his example is not a quoted bank rate or loan offer. Use the lender's actual sanction terms or a current EMI calculator before making financial decisions.
Education Loan Tax Benefit in India
Interest paid on an eligible education loan can qualify for a deduction under Section 80E of the Income-tax Act, subject to the applicable conditions.*
The Income Tax Department's current guidance identifies Section 80E as the deduction for interest payments on a loan taken for higher education of the taxpayer or a relative and requires relevant loan details when claiming the deduction.
Because tax rules and the applicable tax regime can affect the benefit, students and families should verify the current conditions with the Income Tax Department or a qualified tax professional before filing a return.
Official source: Income Tax Department – Section 80E
Common Mistakes to Avoid When Applying for an Education Loan
- Applying without checking the exact scheme. A bank can have different loan rules for different courses and institutions.
- Using outdated interest rates. Loan rates can change, especially for floating-rate products.
- Assuming every loan is collateral-free. Security requirements vary by lender and scheme.
- Ignoring the moratorium and interest rules. Understand what happens to interest during the study period.
- Borrowing more than required. Consider scholarships, savings and other funding sources before deciding the loan amount.
- Submitting incomplete documents. Missing academic or financial documents can delay processing.
- Comparing only the headline interest rate. Also check processing charges, margin, collateral, insurance, repayment period and other applicable costs.
- Using unofficial application links. Use the bank's official website or the official government portal.
How Scholarlify Can Help
Education loans are only one part of funding higher education. Students can also search for scholarships and other funding opportunities through Scholarlify before deciding how much they need to borrow.
Explore scholarships: Browse Scholarships on Scholarlify
Students can also explore Scholarlify's mentorship and educational resources for guidance on scholarship applications, SOPs and education funding.
FAQs About Education Loans in India
What are the documents required for an education loan in India? Common documents include identity and address proof, academic marksheets, admission or offer letter, course fee details and financial documents of the co-borrower where required. Collateral documents may be needed if the particular loan scheme requires security. Students studying abroad may also need passport and other overseas-study documents.
Which bank is best for an education loan in India? There is no single bank that is best for every student. Compare the specific loan schemes offered by different lenders on interest rate, loan amount, collateral requirements, repayment period, processing charges, eligible institutions and other applicable conditions.
For example, students can compare official education-loan information from SBI and PNB along with other eligible lenders.
Can I get an education loan without collateral? Yes, some education-loan schemes offer collateral-free financing subject to their eligibility conditions, loan limits, institution lists and other requirements. For example, SBI's Student Loan scheme states that loans up to ₹7.5 lakh under that product do not require collateral security or a third-party guarantee, subject to the scheme conditions. PM Vidyalaxmi also provides collateral-free and guarantor-free loans for eligible students admitted to covered Quality Higher Education Institutions.
How much loan can a student get in India? The amount depends on the lender, scheme, course, institution, documented expenses, collateral and repayment assessment. There is no single loan amount available to every student.
What expenses are covered under an education loan? Depending on the lender and scheme, education loans may cover tuition, examination and institutional fees, hostel charges, books, equipment, computers or laptops where permitted, project-related expenses and certain travel costs for eligible overseas studies.
What is the typical repayment period? Repayment periods vary by lender and product. Some education-loan schemes provide repayment periods of up to 15 years after the applicable moratorium, but students should check the exact sanction terms before applying.
What is PM Vidyalaxmi? PM Vidyalaxmi is a Government of India scheme providing education-loan support to eligible students admitted on merit to covered Quality Higher Education Institutions. The scheme provides collateral-free and guarantor-free education loans for eligible students and offers interest-subvention benefits to students meeting the applicable family-income and other conditions.
Can I use a scholarship along with an education loan? A scholarship can reduce the amount that needs to be financed, but the exact treatment of scholarship or assistantship amounts depends on the lender and loan scheme. Students should disclose scholarship funding to the lender and ask how it affects the loan requirement and margin calculation.
When does education-loan repayment begin? The repayment start date depends on the lender and loan scheme. Many education loans provide a moratorium covering the course period and an additional period after completion, but the exact period should be checked in the sanction terms.
Is an education loan available for study abroad? Yes. Banks and other lenders offer education-loan schemes for eligible overseas courses. The loan may cover tuition and other approved education-related expenses, and additional documents such as passport, admission and travel-related documents may be required.
Education Loan Application Checklist
Before submitting your application, keep this checklist ready:
- Admission or offer letter
- Course fee structure
- Class 10 and Class 12 marksheets
- Graduation marksheets where applicable
- Identity and address proof
- PAN and Aadhaar where applicable
- Co-borrower income documents
- Bank statements where required
- Collateral documents if required
- Passport and overseas-study documents where applicable
- Scholarship or fee-concession information, if applicable
Conclusion
Applying for an education loan in India involves more than simply choosing a bank with a low advertised interest rate. Students should first confirm their eligibility, identify the correct loan scheme, calculate the amount they actually need, compare the full terms, prepare complete documents and understand the interest, moratorium, collateral and repayment conditions before submitting an application.
Government-supported options such as PM Vidyalaxmi can also be relevant for eligible students admitted to covered institutions. Students should verify the current eligibility and institutional list before applying.
Scholarships can reduce the amount a student needs to borrow. Before taking a loan, compare available scholarships and other funding opportunities on Scholarlify.
Official Sources and References
- PM Vidyalaxmi Official Portal
- Press Information Bureau – PM Vidyalaxmi Portal for Higher Education Loans * Vidya Lakshmi – Official Important Links
- SBI Student Loan Scheme
- [SBI Education Loan Interest Rates](SBI Education Loan Interest Rates)
- PNB Education Loans
- PNB Digi Education Loan
- Income Tax Department – Section 80E * Scholarlify – SBI Education Loan 2026 Guide
- Scholarlify – Scholarships in India 2026
- Scholarlify – NSP Scholarship 2026-27 Guide