Education Loan in India: Eligibility, Documents and Repayment Basics

Key takeaways

You usually need a confirmed admission and a co-applicant, typically a parent or guardian.
Repayment starts after a moratorium (course period plus a grace period), but interest may keep building.
Paying interest during the course reduces the total cost.

Who can apply

An Indian student with a confirmed seat in a recognised course in India or abroad can apply, along with a co-applicant whose income supports repayment. Lenders look at the course, the institute’s reputation and the co-applicant’s credit score.

What an education loan covers

Tuition and examination fees.
Hostel and living costs.
Books, equipment and laptops.
Travel for study abroad, in many cases.

Collateral

Many banks lend smaller amounts without collateral and ask for security above a limit, often around ₹7.5 lakh. Rules differ by lender and by the institute. Some central government schemes, such as PM-Vidyalaxmi, and the Vidya Lakshmi portal help students compare and apply; check their current eligibility before you rely on them.

Documents commonly required

Admission letter and fee structure.
KYC of the student and co-applicant.
Marksheets of previous qualifications and entrance test scores.
Co-applicant’s income proof and bank statements.

Moratorium and repayment

The moratorium usually covers the course period and 6 to 12 months after it. In this phase you may pay only the interest, or nothing at all, depending on the loan. If you pay nothing, the unpaid interest is added to the principal and you repay more later. Paying even simple interest during the course keeps the final EMI lower.

Interest on education loans has traditionally been eligible for a tax deduction, but tax rules change, so check the current provisions or ask a tax professional.

Tips

Compare interest rates, processing fees and whether the rate is floating or fixed.
Borrow only what you need: estimate the EMI with the EMI calculator.
Keep your credit clean: see what a CIBIL score is.

Explore education loan options and study abroad loans.

This article is for general information only and is not financial, legal or tax advice. Interest rates, fees and rules change, so confirm current terms with the lender or the regulator before you decide. Examples use illustrative figures. Last reviewed: October 2026.