Education loan is financial aid availed to fund education. The primary goal of education loans is to cover the costs of tuition, hostel charges, travel, and other education-related expenses of the borrower (student). Banks, credit unions, non-profit organizations, and other financial institutions provide education loans. Education loans can be availed by needy students to support higher education with a lump sum amount sufficient to cover their educational expenses.
If you are considering applying for an education loan and searching for the best student loan in India, you are at the right place. This blog post will discuss some of the best education loans in India. We will also discuss eligibility criteria, expenses covered, documents required, and more in this article.
Best education loans in India in 2024
If you are planning to apply for an education loan, you should choose the best to make the most of this financial aid. Here is a list of the best education loans in India for your consideration.
Best education loan providers in India
| Sr. No | Education Loan Product | Repayment period | Loan amount without collateral | Loan with collateral |
| 1 | SBI Student Loan | Up to 15 years after course completion | Up to Rs. 7.5 lakh | Above Rs. 7.5 lakh |
| 2 | PNB Saraswati | Up to 15 years | Up to Rs. 7.5 lakh | Above Rs. 7.5 lakh |
| 3 | Axis Bank Prime Abroad | Up to 15 years | Up to Rs.75 lakhs for foreign education | —- |
| 4 | HDFC Bank Education Loan | Up to 15 years | Up to Rs. 50 lakh for select institutes | Up to Rs. 150 lakhs |
| 5 | Baroda Digital Education Loan | Moratorium period plus max 180 installments for loans above Rs.7.5 lakh | No collateral for premier institues | Above Rs. 7.5 lakhs |
Eligibility criteria for education loans
When you plan to apply for an education loan to cover the cost of your education, you should know about the eligibility criteria first. Remember, you can only avail of any loan when you meet the eligibility criteria. Here is a list of things to look out for when applying for an education loan.
Courses
To avail an education loan, you should have secured admission for a course in any educational institution in India or abroad. The courses can be anything like graduate, post-graduate, diploma, and PhD.
Nationality
Another important eligibility criterion for applying for education loans in India is nationality. You must be an Indian citizen, non-resident Indian citizen (NRI), Person of Indian Origin (PIO), Overseas Citizens of India (OCI) or born to Indian parents living abroad. Students who fall under any of these categories desirous of pursuing their higher education in India can apply for an education loan.
Collateral
In some cases, you may have to provide collateral in the form of insurance, fixed deposit or commercial or residential property to avail of education loans. However, depending on the institution’s reputation, some banks disburse loans solely based on the admission letter.
Expenses covered under education loans in India
Another essential factor you must learn about education loans are the type of expenses they cover. However, the expense coverage can vary from one loan plan to another. Still, the best student loan in India typically covers the education expenses mentioned below.
Tuition fees
Any of the best education loans in India will cover the complete tuition fee. This may include all charges applied by an educational institution for a specific course or program.
Books and study materials
Another common expense education loans in India cover is the cost of books and other study materials required for the education program/course you are applying for.
Examination fees
The best education loans in India also cover examination fees. This may include all fees charged by the instructor for examinations, projects, and assignments within a course program.
Hostel fees
Hostel fees are also covered by some of the best student loans in India.
Library fees
The general expense coverage offered by education loans in India also includes library fees. This means an education loan will also cover all the fees or charges an educational institution applies to access their library or online resources.
Laboratory fees
Laboratory fees, which an educational institution charges for accessing lab and other specialized tools and equipment associated with the laboratory, are also covered under education loans.
Travel expenses
Some of the best education loans in India also cover travel expenses which include expenses you may need for traveling to and from the institute. It can be airfare, bus tickets, train tickets, etc.
List of documents required for education loan
If you are going to apply for an education loan to support your higher education, you must keep all the required documents ready. Here is a list of documents usually required for processing education loans:
● Admission or invitation letter from the educational institution that you have applied for.
● ID proof
● Age proof
● Mark sheets of previously passed exams
● Signature proof
● ITR with the income computation/income certificate
● Latest bank account statement
● Approved visa (for abroad education)
● Latest passport-size photos
● Complete the application form with your signature
Advantages of education loans in India
An education loan can offer a number of benefits to aspiring students in various fields. Below are some advantages of education loans in India:
Long repayment tenure
Education loans in India benefit students as they usually offer long repayment tenures. Students can repay the loan over an extended period through small instalments. A longer repayment tenure helps students efficiently manage their finances and repay the loan amount with ease.
Affordable interest rates
Another important advantage of student loans in India is affordable interest rates. Unlike other type of loans, education loans usually offer lower interest rates. These loans are affordable for students because of the lower interest rates.
No collateral required
Many students think that they cannot get a student loan for lack of collateral. However, not all education loans require collateral. Some loans do not require collateral up to a certain amount. This is hugely beneficial for students who cannot offer collaterals.
Tax benefits
One of the most crucial benefits of education loans for students in India is tax benefits. The Income Tax Act of India offers tax benefits to students who take out student loans. The tax benefits make student loans more affordable as they help to reduce the overall loan cost.
Helps build credit
A credit score reflects the financial status of an individual. When students repay their education loans on time, it helps to build a good credit score. A good credit score is beneficial when they apply for a financial product or other loans in the future.
Covers the entire cost of education
The most important thing about student loans in India is that they can cover the entire cost of education like tuition fees, travel expenses, accommodation, and more. This is primarily beneficial for students who cannot cover these expenses on their own.
Tips for planning a child’s education
- Have a clear idea about the timeline for your child’ education
- Estimate the cost of education
- Take stock of your assets and liabilities
- Start saving to achieve the goal
- Invest smartly
- Buy a term insurance policy to cover unforeseen risks
- Be prepared to meet unexpected expenses
- Start now
- Take into account inflation while considering education expenses
Best education loans in India
There are many options for student loans in India. If you are searching for the best education loan in India, this section is for you. Here, we will discuss some of the top student loans in India.
1. SBI Education Loan
State Bank of India’s SBI Education Loan offers financial assistance to aspiring Indian students. This loan can be availed by students who want to pursue higher education in India or abroad. This loan tries to cover the maximum cost of education, books, tuition fees, and other related expenses.
For loans up to Rs. 20 lakhs, there is no requirement for processing fees.
2. Punjab National Bank Education Loan
Punjab National Bank Education Loan aims to offer financial aid to Indian students aspiring to pursue higher education in India or abroad. Students can apply for any loan amount based on their requirements.
This loan not only recognizes special and professional courses, but also regular courses such as graduation and post-graduation in various streams.
3. Axis Bank Education Loan
Students who want to pursue their higher education abroad or in India can apply for Axis Bank Education Loan. It is one of the popular choices among Indian students who apply for student loans. The loan amount is decided based on the chosen institution and course of the student. The loan can cover hostel fees, tuition fees, and other related expenses.
Axis Bank offers a quick loan disbursal process which takes a maximum of 15 working days after the loan application. Also, the minimum loan amount is Rs. 50,000.
4. HDFC Bank Education Loan
HDFC Bank Education Loan is considered one of the best student loans in India. The loan amount can change depending on various factors such as course fees, tuition fees, living and other expenses related to the chosen course.
This loan does not require collateral for a loan amount of up to Rs. 7.5 lakhs. HDFC Bank also offers a loan repayment tenure of up to 15 years.
5. Bank of Baroda Education Loan
Bank of Baroda Education Loan offers financial help to students who aspire to pursue higher education in India or abroad and have secured a place in a recognized educational institution in India or abroad through a merit-based selection process or a competitive examination.
This loan does not charge a documentation and processing fee and also no collateral for a loan amount of up to Rs. 7.5 lakhs.
Conclusion
Education loans are quite beneficial for supporting the education-related expenses that students find hard or impossible to manage on their own. Education loan companies or organizations offer various kinds of education loans that cater to the diverse needs of students from varying financial backgrounds. There are several quality education loans available in India that you can use to support your higher education. We have covered five best student loans in India that you can apply for. However, before applying for any education loan, do not forget to check the eligibility criteria, documents required, and expense coverage for easy loan disbursal.
