The dream of pursuing higher education at a premier Indian institution often comes with a steep price tag. To help the students manage these costs, Indian banks, both public and private, as well as several NBFCs, offer education loans at attractive rates.
This guide explains how education loans work in India. We look at the top lenders, the current interest rates, and other key features you must know before you apply.
Top education loan lenders and interest rates (2026)
Top education loan lenders in India include SBI, Bank of Baroda, and HDFC Credila. They offer competitive rates and quick approval.
Currently, education loan rates hover between 6.9% and 13% per annum. Public sector banks generally offer the most competitive rates, starting around 6.85%–8.90% for secured loans above ₹7.5 lakh.
Private banks like Axis Bank and ICICI Bank often charge between 8.5% and 12.5%. This is primarily because private banks claim a higher standard of service, prompt redressal of complaints, and better customer relationship management.
If you are a cost-conscious borrower, public sector banks offer 2-3% savings over private banks and are a more affordable choice.
Below are some of the major lenders and their starting interest rates for studies in India.
| Bank Name/Loan Scheme | Category | Interest Rate | Notes |
| State Bank of India (SBI) | Public Bank | 8.3% – 10.25% | Lowest rates
Nil processing fee up to ₹7.5 lakh |
| SBI Scholar Scheme | Public Bank | 7.5% | For IITs, IIMs, and NITs students
Zero processing fees |
| Bank of Baroda | Public Bank | 8.3% – 12.5% | Baroda Scholar scheme is available
Nil fee up to ₹7.5 lakh |
| PNB Pratibha | Public Bank | 8.5% – 10.5% | Zero processing fees; unlimited loan amount |
| Central Bank of India | Public Bank | 8.6% – 11.5% | Competitive rates for general education loans |
| IDBI Bank | Public Bank | 8.6% – 11.2% | Flexible tenure up to 15 years |
| Indian Overseas Bank | Public Bank | 8.3% – 12.5% | Adequate loan coverage for domestic studies |
| HDFC Bank | Private Bank | 10.5% | Flat rate
Rapid processing |
| ICICI Bank | Private Bank | 10.2% – 13.8% | Variable rates based on loan amount and profile |
| Axis Bank | Private Bank | 9.6% – 12.8% | Zero fee up to ₹4 lakh
Excellent service |
| Kotak Mahindra Bank | Private Bank | 12% – 16% | Premium rates
Comprehensive support services |
Please note that the interest rate on education loans for Indian universities with and without collateral might change at any time. Kindly consult the bank website for the latest information.
Government education loan schemes in India
Manpower development is of key importance in a developing nation. For this reason, the Indian government has multiple schemes designed to make education loans more affordable among those who are economically weaker.
PM Vidya Lakshmi Scheme
The scheme makes it easy to avail education loans for Indian universities with and without collateral. Eligible students from families with income up to ₹8 lakh can receive interest subsidies, e.g., 3% for income between ₹4.5 lakh and ₹8 lakh. You can apply through the Vidya Lakshmi Portal.
“The Cabinet has approved the PM-Vidyalaxmi scheme to support youngsters with quality education. It is a significant step towards empowering the Yuva Shakti and building a brighter future for our nation.” – Prime Minister Narendra Modi
Central Sector Interest Subsidy Scheme (CSIS)
This is for students whose families have an income of less than ₹4.5 lakhs annually. Under CSIS, the government pays the full interest on the education loan during the moratorium period.
Besides, there are further schemes from:
- National Skill Development Fund Corporation (NSFDC) facilitates high loan limits (up to ₹40 lakhs) with a government credit guarantee.
- National Backward Classes Finance & Development Corporation (NBCFDC) offers loans at 4% interest rate for study in India and abroad.
In essence, the government provides support through interest waivers, credit guarantees, and dedicated loans.
Key loan features: what you must know
There is more to an education loan than interest rates. It’s the “fine print” that matters. Here are the main features of education loans that help borrowers plan repayment and avoid surprises.
Collateral and Security Requirements
The question we face most often is, “Can I get education loans for Indian universities without collateral?”
Yes absolutely. Education loans for Indian universities without collateral are available.
- PSU banks offer loans up to ₹7.5 lakh under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
- Major banks like ICICI Bank (up to ₹1 crore for post-graduate studies), HDFC Bank, and Federal Bank also provide unsecured loans for higher studies in India.
However, the interest rate might be slightly higher than that of education loans for Indian universities with collateral.
Moratorium Period
You don’t have to start repaying an education loan immediately after your degree. Naturally, you need some time to find a job and settle down. This period is known as the moratorium period. It varies with banks, but usually lasts for 6 months to a year. SBI education loan moratorium lasts for the course period plus one year, or 6 months after securing a job.
Loan Tenure
It means the duration of the education loan. In India, the education loan tenures range from 5 to 15 years.
Though a longer tenure means lower EMI, the total interest burden is always greater. Besides, you might not want to drag out repayment of an education until your mid-30s. Therefore, choose after due consideration. If you need help and guidance, our experts at GradRight will be glad to offer you advice.
Guarantor
Banks have to protect their loans. If the primary borrower defaults, they need to have a second applicant who will repay the loan. The guarantor is a financially stable person and usually a parent, guardian, or sibling.
EMI
EMI stands for Equated Monthly Instalment. It is the amount you will pay back to the bank every month. Each installment has a part of the principal (the amount you borrowed) and the interest.
The formula for calculating EMI is quite lengthy,
EMI = [P × R × (1+R)^N] / [(1+R)^N – 1]
where:
P is the principal loan amount
R is the monthly interest rate
N is the loan tenure in months
It is easier to use the GradRight education loan EMI calculator. Simply input the tenure, interest rate, and principal, and the EMI calculator will show you the monthly outgo.
Fixed vs Floating Interest Rate
Fixed interest rates remain constant throughout the loan term. Floating rates vary based on market conditions. Fixed rates are more expensive than prevailing floating rates when you avail the loan. However, they bring certainty. The day you take the loan, you know the exact amount you will be repaying over the next 8 – 12 years. Floating rates will dip and rise each time the Reserve Bank of India changes its repo rate.
What are the Eligibility Criteria and Required Documents for education loans?
To apply for an education loan in India, the applicant must meet the following conditions:
- Must be an Indian national.
- Between 18 and 35 years of age.
- Received admission to a recognised institution in India.
Applicants must submit a completed application form with several documents. Here is a comprehensive education loan document checklist.
| Category | Document Name |
| Academic Records | 1. 10th & 12th Grade Marksheets & Certificates |
| 2. Graduation Marksheets & Degree Certificate (if applicable) | |
| 3. Entrance Exam Scorecards (e.g., JEE, NEET, CAT) | |
| 4. Scholarship Award Letter (if applicable) | |
| Admission & Course | 5. Admission Offer Letter from the University |
| 6. Detailed Course Fee Structure | |
| 7. Schedule of Expenses | |
| KYC (Identity & Address) | 9. PAN Card (Student & Co-applicant) |
| 10. Aadhaar Card (Student & Co-applicant) | |
| 12. Recent Passport-sized Photographs | |
| Financial (Co-applicant) | 14. Income Proof: Last 2 Years ITR with Computation of Income |
| 15. Last 6 Months’ Bank Statements | |
| 16. Salary Proof: Last 3 Months’ Salary Slips & Form 16 | |
| 17. Business Proof: Business License, GST Registration, etc. | |
| Collateral (If Applicable) | 18. Property Documents (Title Deed, NOC from society, etc.) |
| 19. Latest Property Valuation Report | |
| 20. Consent Letter from all owners for mortgaging the property. | |
| 21. LIC Policy Papers / FD Certificates / Other Security Documents | |
| Other | 22. Completed and Signed Loan Application Form |
| 23. Declaration Form / Statement of Assets & Liabilities |
Making the right choice
The current low-interest rate regime makes it easy to take affordable loans and repay them over several years. But the system rewards the informed borrower. For this reason, a platform like GradRight that helps students finance their education is crucial. Using a unique reverse bidding model, more than 15 lenders (including ICICI, SBI, and HDFC Credila) compete to offer the best interest rates and terms. If you need further support, feel free to reach out to us at any time.
