Introduction
Higher education is an investment in your future. An education loan bridges today’s costs with tomorrow’s income so you don’t pause your goals.
What is an Education Loan?
A specialised loan for studies in India or overseas. It can include tuition, essential living costs and study tools. EMIs usually begin after a grace (moratorium) period once you start earning.
Courses Covered
- Undergraduate & postgraduate programs (Engineering, Medical, MBA, etc.).
- Professional diplomas & vocational programs.
- Skill-focused diplomas (Design, Film, Data, etc.).
Loan Variants
- Secured loans — backed by collateral (FD / residential property). Usually lower rates and longer tenures.
- Unsecured loans — no collateral. Faster, but typically higher rates and tighter eligibility.
Expenses Covered
Beyond tuition, lenders may include hostel/PG rent, exam/library/lab fees, books & equipment, laptop, local travel, and other items appearing in the institute’s cost sheet.
How to choose a lender
- Rate & tenure — decide your EMI load and total interest outgo.
- Processing/other fees — compare the full fee sheet, not just the rate.
- Coverage — ensure critical expenses are allowed in sanction.
- Approved institute list — sanction is quicker if your college is on it.
- Flexibility — moratorium, part-payments, pre-closure, and top-up rules.
Eligibility
- Indian resident/NRI student with a co-applicant (parent/guardian).
- Clean credit history (typically 700+ score for co-applicants).
- Loan-to-value up to ~90% when backed by eligible collateral.
How it works
Amount is paid directly to the institute (and sometimes to you for permitted expenses). EMIs begin after a moratorium — e.g., 12 months from course completion or 6 months after first job, whichever earlier. Paying simple interest during study reduces the total cost significantly.
Important points
- Confirm eligibility before committing large admission amounts.
- Keep documents complete; read the sanction letter carefully.
- Consider basic term insurance if property is used as collateral.
Subsidy Schemes
- Central Sector Interest Subsidy (CSIS)
- Dr. Ambedkar Interest Subsidy
- Padho Pradesh (as applicable)
Tax Benefits
Under Section 80E, the entire interest paid in a financial year is deductible (no cap) for up to 8 years from EMI start. Principal does not get a deduction under 80E.