In today’s time, higher education is no longer cheap; almost every college demands high fees. If it doesn’t matter that you are dreaming of an engineering seat in Bengaluru or planning to study abroad, the expenses can feel scary. From tuition fees and hostel charges to laptops and textbooks, it all adds up fast. Not every family can bear the cost of higher studies.
That’s where education loans come in. They have become a lifeline for students across India, helping them fulfil their dreams without putting too much financial pressure on their parents. In this blog, we discuss about some of the Top Banks for Education loans in India, what to look for before applying, and how to pick the right one for you.
The Importance Of Education Loan
For many students in India, an education loan isn’t just helpful, it’s necessary. With rising tuition fees and the added cost of living, it’s tough for most families to manage everything from their savings. An education loan ensures that you don’t have to give up on your dream college or course just because of money.
More importantly, taking a loan teaches you financial responsibility early in life. It’s a smart investment. Instead of delaying your studies or compromising on the course you want, you can study now and repay later when you’re earning.
With support like government subsidies and flexible repayment terms, education loans have become a practical and empowering option for students across India.
10 Top Banks for Education Loans in India
Below is the list of top banks for education loans in India:
1. State Bank Of India
SBI is one of the most trusted public sector banks in India. It is a nationalised bank that is a top choice for students for education loans. It offers student-friendly schemes with competitive interest rates and flexible repayment terms.
Average Interest Rate: 7.90% p.a. to 10.90% p.a.
Below are popular education loan schemes for students:
- SBI-Student Loan Scheme
2. Punjab National Bank
PNB is another major public sector bank in India that offers reliable and affordable education loans to needy students. The bank provides student loans under many schemes, each is designed for different student needs.
Average Interest Rate: 4.00% p.a. to 12.60% p.a.
Below are popular education loan schemes for students:
- PNB Udaan: For students who want to study abroad
- PNB Saraswati: For students pursuing higher studies in India
- PNB Pratibha: Special scheme for students admitted to top institutions like IIMs, IITs, and ISBs
3. Bank Of Baroda
Bank of Baroda is one of India’s top public sector banks, and it is popular among students who are searching for education loans with flexible options. If you are planning for higher education or going abroad for studies, or for school education.
Average Interest Rate: 7.90% p.a. to 14.25% p.a.
Below are popular education loan schemes for students:
- Baroda Gyan: This scheme is for students pursuing higher education in India. It covers everything from tuition fees to hostel expenses, books, travel, and even equipment like laptops.
- Baroda Scholar: Specially designed for students going abroad for higher studies. It includes living expenses, travel costs, and other essentials along with tuition.
- Baroda Vidya: A lesser-known but useful scheme for school students (Class I to XII), covering school fees, uniforms, transport, and other basic costs.
4. HDFC Bank
HDFC is one of the top private banks in India. It offers an education loan to students. If you are looking for a smooth and quick education loan process, especially for study abroad, then it can be the right option for you. HDFC Bank offers you a loan even before admission is confirmed, which is helpful when you are applying for a university that requires proof of funds.
Average Interest Rate: 10.50% p.a. onwards
Below are popular education loan schemes for students:
1. HDFC Credila Education Loan: HDFC offers education loans through its dedicated wing, HDFC Credila, which focuses entirely on student loans.
5. AXIS Bank
Axis Bank is a popular private bank in India that offers student-friendly education loans to support higher studies in India and abroad. If you are looking for any flexible repayment option and a quick loan process, then Axis Bank can be one of the options.
Average Interest Rate: 9.58% p.a. to 12.75% p.a.
Below are popular education loan schemes for students:
Axis Bank Education Loan: This loan scheme is designed to support students aiming for professional and technical courses in India or overseas.
6. IDFC First Bank
IDFC FIRST Bank is becoming popular among students for offering education loans with no hidden charges, attractive interest rates, and a completely digital process. As compared to traditional banks, it offers hassle-free student loan services, especially for higher education abroad.
Average Interest Rate: 9.50% p.a. onwards
Below are popular education loan schemes for students:
IDFC FIRST Bank Education Loan: IDFC FIRST Bank focuses on helping students access global education at a higher level.
7. ICICI Bank
ICICI Bank is one of India’s largest private banks and a trusted name in offering education loans. ICICI Bank offers loans with quick approvals and solid customer service, making it a reliable choice for students.
Average Interest Rate: 10.25% p.a. onwards
Below are popular education loan schemes for students:
ICICI Education Loan for Domestic and International Studies: ICICI Bank offers loans for undergraduate, postgraduate, vocational, and professional courses in India and abroad.
8. Kotak Mahindra Bank
Kotak Mahindra Bank may not be the first name that comes to mind for education loans, but it’s steadily becoming a preferred choice, especially for students planning to study abroad. The bank offers customised education loan solutions with competitive interest rates, minimal paperwork, and flexible repayment terms.
Average Interest Rate: Maximum up to 16% p.a.
Below are popular education loan schemes for students:
Kotak Mahindra Bank Education Loan: This education loan is suitable for both Indian and foreign institutions, covering undergraduate, postgraduate, diploma, and professional courses.
9. Canara Bank
Canara Bank is one of the oldest and most trusted government banks in India. It offers education loans at very reasonable interest rates and through government-backed schemes. It has many branches, especially for students living in semi-urban and rural areas.
Average Interest Rate: 8.35% p.a. to 11.75% p.a.
Below are popular education loan schemes for students:
Education Loan Scheme for Pursuing Master’s Degree: This scheme offers a loan to students who want to pursue higher education.
IBA Model Education Loan Scheme: This loan scheme is designed to cover many expenses like travel expenses, library fees, laboratory fees along with course fees.
IBA Skill Loan Scheme Education Loans: This loan scheme is designed to assist national skill development schemes.
Vidya Turant: This scheme offers education loans to deserving students getting admission in selected universities to pursue higher education.
Vidya Shakthi: This scheme offers a loan to PwD students who want to pursue special courses in India.
Vidya Sahay: This scheme offered by Canara Bank helps meritorious students who need money for the down payment for CET and counselling.
10. Union Bank
Union Bank of India is another government bank offering education loans that are affordable with the help of government schemes. It can be a good option for students who need financial support for both higher education and study abroad.
Average Interest Rate: 8.10% to 12.55% per annum
Below are popular education loan schemes for students:
Special Union Education Scheme for ISB: Under this scheme, the bank offers loans to students who are pursuing management programs in the ISB, India.
Special Union Education Loan Schemes for Premier Institute Abroad Studies: This scheme covers students who have been admitted to any foreign institute, it provides an education loan to this kind of students.
Special Union Education Loan Scheme for Premier Medical Institutes: It is designed for students joining top government medical colleges in India.
Special Scheme for students of Premier Management & Technical Institutes Inland – TIER I: This loan scheme is for students in top-tier Indian institutes like IIMs, IITs, NITs.
Special Scheme for students of Premier Management & Technical Institutes (Tier-II): It supports students studying in Tier-II ranked Indian management and technical institutes.
Union Education India / Abroad / NRI Student: It is a general-purpose education loan for Indian, international, and NRI students across various courses.
Check Out the Education Loan EMI Calculator
Key Factors to Consider Before Taking an Education Loan
- Interest Rate:
Even a small difference in interest rates can make a big difference in how much you will have to repay later. Public sector banks offer education loans at lower rates compared to many private banks, especially if you are applying under any government scheme.
- Moratorium Period:
The moratorium period is the time during which you don’t need to repay the loan. It is usually the course duration plus 6 to 12 months. So, make sure you exactly know how long your bank gives you time before you start repayment of the loan
- Loan Coverage:
Check what the loan covers. Some loans only cover tuition fees, while others include hostel charges, books, travel, and even a laptop. checking all the details and deciding is always a smart step.
- Margin Money:
Some banks ask you to pay a small part of the total cost yourself, this is called margin money. Not all loans have it, but it’s good to check before applying for the loan.
- Need for Collateral:
If you are borrowing a large amount, banks might ask for collateral, like property or fixed deposits. Make sure you know if this is required.
- Subsidy Schemes & Benefits:
Check for schemes like the Central Sector Interest Subsidy (CSIS), which can help reduce the financial burden for students from low-income families.
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Last Words
When it comes to funding your higher studies, having knowledge of top banks for education loans in India is very helpful. Many banks like SBI, PNB, Canara, and HDFC etc. offer education loans at affordable rates with flexible repayment options and support.
An education loan is more than just financial aid, so take your time and compare the options, understand its term clearly and select the loan option/ scheme that supports your academic goals.
Frequently Asked Questions
Q.1 What is the maximum loan repayment period for an education loan?
Ans: The maximum loan repayment period for an education loan is up to 15 years..
Q.2 What is the maximum loan amount I can get for studying abroad?
Ans:Banks usually offer loans of up to 90% of the education expenses. However, the loan amount is determined by several factors such as your academic record and your family's annual income etc.
Q.3 Is there a pre-payment penalty on an education loan?
Ans:Many banks do not impose a penalty on repayment of education loans, but it is always advisable to confirm with the bank.
Q.4 Can I apply for an education loan online?
Ans:Yes, you can apply for an education loan online in India.
Q.5 What is the moratorium period?
Ans:The moratorium period is the course term plus 6 months or 1 year, during which the bank allows students to figure out their finances and plan for loan repayment.