What is an Education Loan?
An education loan is a financial assistance provided by banks or financial institutions to students who want to pursue higher education in India or abroad. It covers tuition fees, hostel charges, books, travel, and other related expenses. The loan is usually repaid after the course completion with a moratorium period (grace period) of 6–12 months.
Advantages of an Education Loan
Access to Quality Education
Helps students study in top universities without financial burden.
Covers Comprehensive Expenses
Includes tuition fees, travel, library, exam fees, and accommodation.
Tax Benefits
Under Section 80E of the Income Tax Act, interest paid on education loan is tax-deductible for up to 8 years.
Moratorium Period
Repayment starts after course completion or 6–12 months after getting a job.
Builds Credit History for Students
A good repayment record helps in future credit needs.
Collateral-Free Loans (Up to a Limit)
Many banks offer unsecured education loans up to ?7.5 lakh.
Eligibility Criteria
Criteria Requirement
Nationality Indian citizen
Age 16–35 years (varies by lender)
Academic Record Good academic performance
Course Type Recognized courses in India or abroad (professional, technical, or higher education)
Institution Recognized by UGC/AICTE/Government (India) or reputed foreign universities
Co-applicant Parent/guardian required as co-borrower
Credit History Co-applicant’s CIBIL score considered
Documents Required
Student Documents
Identity Proof: Aadhaar, Passport, PAN, Voter ID
Address Proof: Aadhaar, utility bill, passport
Academic Records:
Mark sheets (10th, 12th, degree)
Admission letter from the institution
Course Details: Fee structure from the college/university
Co-applicant (Parent/Guardian) Documents
Identity & Address Proof: Aadhaar, PAN, Passport
Income Proof:
Salary slips (last 3–6 months) or
IT returns for last 2 years
Bank Statements: Last 6–12 months
Collateral Documents (if required)
Property papers (for secured loans)
Valuation certificate