Student Loan
In India, educational loans provide financial backing to students for higher education and also provide an opportunity for long term finance to sponsor striven Indian youth. They can be obtained from public or private banks and even NBFCs, while some of them have government schemes, tax benefits and flexible repayment options.
Government Schemes
- Pradhan Mantri Vidyalaxmi Scheme
- Central Sector Interest Subsidy (CSIS) Scheme
- Credit Guarantee Fund Scheme for Education Loan) (CGFSEL)
Interest on Student Loan
Student loan interest rates in India generally range from about 7% to over 12% p.a., varying by bank, loan amount, collateral, and student profile, with major banks like SBI and PNB often having competitive rates (starting around 8.55%), while government schemes and specific institutions can offer lower rates (like 3.5% for some backward classes). Floating rates are common, linked to the Repo Rate, and female students often receive a 0.5% concession.
Typical Interest Rate Ranges
| Sector | Interest Rate |
|---|---|
| Public sector banks (SBI, PNB) | Often start in the 8.5% to 9.5% range for secured loans, with variations for schemes. |
| Private Banks/NBFCs (ICICI, Axis) | Rates can be higher, often starting from 11% or 12%. |
| Government Schemes | NBCFDC offers very low rates (3.5% for girl students) for specific categories. |
Key factors Influencing interest rates
- Loan amount
- Security
- Course and institution
- Applicant profile
- Loan type
Education Loan
Education loans in India provide financial support to students for pursuing higher education both domestically and internationally, covering various expenses like tuition and living costs.
Eligibility Criteria includes
- Must be an Indian citizen
- Age should be around 16-35 years
- A good academic record (often a minimum of 50% marks in previous qualifications)
- Confirmed admission letter from recognized university
- The loan is typically for job-oriented, professional, or technical graduate or postgraduate degree/diploma courses recognized by bodies like UGC, AICTE, or government authorities
- A co-applicant (parent, guardian, spouse, or parent-in-law) with a stable income and a good credit history is mandatory
- The co-applicant's CIBIL (credit) score is a critical factor, generally expected to be above 700. ## Education Loan Process
The education loan procedure in India comprises multiple stages, including checking eligibility and arranging documentation to disbursement of loan and its repayment. There are loans available from both public and private sectors, and the government’s Student Loans Scheme offers interest relief for qualifying students.
Step by step process
- Research and compare lenders
- Apply via the Vidyalaxmi Portal
- Gather documents
- Submit application
- Verification and sanction
- Sign loan agreement
- Disbursement ## Study Abroad Loan
An abroad education loan is a type of financial aid that you can use for all expenses such as tuition fee, library charges, travel expenses and purchase of study material etc. These loans are sanctioned by public/private banks, Non-Banking Financial Companies (NBFCs), and international lenders found in the form of secured as well as unsecured options.
| Features | Secured loans | Unsecured loans |
|---|---|---|
| Collateral required | Yes (e.g., property, Fixed Deposits, insurance policies) | No collateral required |
| Loan amount | Generally higher (upto 3 INR Crores) | Generally lower, but can be up to INR 75 lakhs from NBFCs/private banks |
| Interest rate | Lower | Higher |
| Processing time | Longer due to asset valuation | Faster |
Eligibility Criteria
- Must be an Indian citizen
- Applicant should be over 18 years old
- Good academic record
- A financially stable co-borrower/guarantor residing in India is usually required.
Process
- Calculate the total required funds, accounting for tuition, living costs, and other expenses
- Compare lenders
- Check the eligibility requirements
- Gather all the necessary documents
- Submit the application online or at a bank branch
FAQ'S
Q1. Can I get an education loan for studying abroad?
Ans. Yes, you can certainly get an education loan to study abroad. Available options are from Indian public/private banks, as well as dedicated lenders (such as Credila), which provide coverage for tuition + living + travel expenses; loans may be either secured or unsecured (no collateral necessary for top institutions/ strong profile); and may require confirmed admission, a co-applicant (usually) and good academics,with repayment tenures of up to 15 years.
Q2. I am planning to study abroad. How can I get a loan in India?
Ans. To get an education loan in India for studying abroad, you need confirmed admission, a co-applicant (parent/spouse) with stable income, strong academics, and essential documents like mark sheets, admission letter, and income proofs; then, compare lenders (public vs private) for interest rates, apply online via portals like Vidya Lakshmi or directly with banks (SBI, HDFC), and prepare for collateral requirements, often needed for loans over ₹7.5 lakhs.
Q3. What are the criteria for an education loan abroad?
Ans. To obtain an education loan for studying abroad, you must meet criteria related to your profile, the university/course you've chosen, and the financial standing of your co-applicant. The specific requirements can vary between lenders (banks and NBFCs) and whether you opt for a secured (with collateral) or unsecured loan.
Q4. How can I get an education loan in India?
Ans. To get an education loan in India, you must check your eligibility, gather necessary documents, and apply through either a specific bank's website, an NBFC, or the government's unified PM-Vidyalaxmi portal. The process is straightforward, as education loans are a priority product for banks.
Q5. Are there any online platforms offering an education loan?
Ans. Yes, Infigon Futures provides educational loans and are affiliated with many various banks offering best options for students. If you need help with your education loan you can contact Infigon Futures through their official website.