Overview of education loans in India
An education loan lets a student pay for a course now and repay after earning. Lenders usually finance tuition, hostel, exam fees, books, a laptop and travel for overseas study. The student is the main borrower and a parent or guardian is almost always a co-borrower, because most students have no income or credit history of their own.
The category covers several products: a standard education loan for domestic courses, a student loan, a study abroad loan with a much higher ceiling, a collateral-free option for smaller amounts, and a vocational course loan for skill programmes. They differ in loan size, security, how the course is judged and how long repayment runs, so the right pick depends on the course and your family finances.
Types of education loans
| Loan | Security | In brief |
|---|---|---|
| Education Loan | Secured or unsecured | An education loan is a loan to pay approved course costs such as tuition, hostel, books and exam fees, with a parent or guardian as co-borrower. |
| Student Loan | Secured or unsecured | A student loan in India is borrowing taken for a course of study, repaid after graduation, usually with a parent or guardian as co-borrower. |
| Study Abroad Loan | Secured or unsecured | A study abroad loan finances tuition and living costs for a course at an overseas university, usually with a parent as co-borrower and property or deposit as security above a limit. |
| Education Loan Without Collateral | Unsecured | An education loan without collateral is a course loan sanctioned without pledging property, a deposit or any other asset. |
| Vocational Course Loan | Secured or unsecured | A vocational course loan finances skill training such as ITI, polytechnic diploma, certification or trade courses. |
EMI calculators for education loans
Each calculator is set up for how that loan is really repaid, with typical rates, a repayment schedule and the fees that change the true cost.
How to choose between education loans
- Match the loan to the course and country. Domestic degrees, overseas programmes and short skill courses are treated differently. Lenders look at the institution, the course and its job outcomes, so confirm that your specific course is eligible before comparing rates.
- Check what costs are covered. Ask whether tuition, hostel, travel, insurance, laptop and living costs are all financed. A loan that covers only tuition can leave a large gap that you must fund from savings or another borrowing.
- Understand the moratorium. Most lenders allow a repayment holiday of the course period plus six to twelve months. Check whether interest accrues during this time and whether you can pay simple interest early to reduce the final burden.
- Compare collateral rules. Smaller loans can often be had without security, but larger amounts usually need property or a guarantee. Find out the exact limit, what security is accepted and who must sign as co-borrower.
- Look at total cost, not just the rate. Compare processing fee, margin money, rate type, prepayment terms and the effect of capitalised interest. Check the tax benefit on interest under Section 80E if you choose the old tax regime.
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Education Loans: frequently asked questions
What is an education loan in India?
An education loan is a loan taken by a student, with a parent or guardian as co-borrower, to pay for approved course costs such as tuition, hostel and books. Repayment normally starts after the course ends plus a moratorium period, so the student can begin repaying once employed.
Do I need collateral for an education loan?
Not always. Many lenders offer loans up to about ₹7.5 lakh without collateral, though a guarantor or co-borrower is required. Larger amounts, especially for overseas study, usually need security such as property or a fixed deposit. The exact limit depends on the lender and the institution.
When do I start repaying an education loan?
Repayment usually begins after a moratorium, which is typically the course duration plus six to twelve months or until you get a job, whichever comes first, depending on lender rules. Interest generally keeps accruing during this period, so paying it early lowers your total cost.
Can I get a tax benefit on an education loan?
Yes, under the old tax regime. Section 80E allows a deduction for the interest paid on an education loan, with no upper limit on the amount, for up to eight years starting from the year you begin repayment. The principal is not deductible, and the deduction is not available under the new regime.
Who should be the co-borrower on an education loan?
A parent or guardian with a stable income is the usual co-borrower, since lenders assess repayment ability of the family while the student has no income. A spouse or sibling can sometimes act as co-borrower. The co-borrower shares legal liability for the loan.
Can I get an education loan for a course abroad?
Yes, many lenders finance overseas study, often with higher limits and a requirement for collateral on larger amounts. They look at the university, the course, your admission letter and your academic record. Currency, living costs and visa conditions also affect the sanctioned amount.
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Official sources and further reading
These guides are written from Reserve Bank of India rules and official scheme pages. Rules, rates and scheme terms change, so check the current position on these sites and in your lender's Key Fact Statement before you apply.
- RBI: Key Facts Statement (KFS) for loans and advances. The Reserve Bank of India notification that tells lenders to give every borrower a plain-language statement of the full cost of a loan.
- RBI Complaint Management System. Where to take a complaint against a bank, NBFC or other regulated lender if the lender does not resolve it.
- RBI (Pre-payment Charges on Loans) Directions, 2025. Bars pre-payment charges on floating-rate loans taken by individuals for non-business purposes, for loans sanctioned or renewed from 1 January 2026.
- Reserve Bank - Integrated Ombudsman Scheme, 2021. The single complaint scheme for customers of banks, NBFCs and other RBI-regulated lenders.
- RBI: Free Annual Credit Report to Individuals. Credit bureaus must give you one free full credit report with score every calendar year.
- RBI Financial Education. Consumer guidance from the Reserve Bank of India on borrowing, fraud and your rights as a customer.
Edited by Hemant Kumar. Rates on this site are indicative ranges, not offers.
General information only. Rates and terms are indicative and vary by lender and applicant.