Education Loans for Studying in India: Banks, Loan Limits, Interest Rates and Eligibility

Higher education in India has become increasingly expensive, particularly for professional programmes such as MBBS, BTech, MBA and law. To ease this financial burden, many students opt for education loans that cover expenses like tuition fees, hostel accommodation, books, laptops and other academic costs. Leading banks, including SBI, ICICI Bank and Bank of Baroda, provide education loans for studies in India, with loan amounts varying according to the course, institution and bank policy.

The Interest Rate For Education Loans

The interest rate on an education loan is not the same for every student. It depends on factors such as the course chosen, the institution, the loan amount and whether the loan is secured or unsecured. For example, ICICI Bank offers secured education loans for engineering and management courses at select institutes starting from 8.50 per cent, while unsecured loans begin at 9.25 per cent. For medical courses, secured loans start from 8.75 per cent, whereas unsecured loans begin at 9.50 per cent.

Students planning to apply for an education loan can choose from several public and private sector banks. SBI provides education loans of up to Rs 1 crore, with collateral generally not required for loans up to Rs 7.5 lakh. Bank of Baroda offers loans of up to Rs 1.5 crore under selected schemes, while ICICI Bank provides education loans of up to Rs 1 crore in India and up to Rs 3 crore abroad, depending on the course, institution and the applicant’s eligibility.

Major Banks Providing Education Loans In India

SBI Education Loan Highlights

SBI offers a range of education loan schemes designed for students pursuing different courses at recognised institutions across India. The loan amount, interest rate and collateral requirement vary depending on the scheme and the student’s academic profile.

Loan Limit, Interest Rate

Under the PM Vidyalakshmi scheme, SBI offers interest rates ranging from 6.90 per cent to 8.40 per cent, depending on the applicable category. The SBI Student Loan Scheme provides loans of up to Rs 7.5 lakh at an interest rate of 9.90 per cent, generally without the need for collateral. For loans between Rs 7.5 lakh and Rs 10 lakh, the interest rate is 9.40 per cent with collateral. Loans above Rs 10 lakh also carry an interest rate of 9.40 per cent, and collateral is mandatory.

SBI also runs a Scholar Loan Scheme for students admitted to select premier institutions. Under this scheme, interest rates range between 6.90 per cent and 7.65 per cent, making it one of the bank’s more affordable education loan options.

For detailed schemes of educational loan, refer to the official website sbi.bank.in/web/personal-banking/loans/education-loans. 

Bank of Baroda Education Loan Highlights

Bank of Baroda Loan Schemes According To Course Level

Loan Amount, Eligibility

Among its various schemes, the Baroda Gyan education loan offers financial assistance of up to Rs 1.25 crore. Students enrolled in graduation, postgraduation or professional programmes such as engineering, medicine, agriculture, veterinary science, law, dentistry, management, architecture and computer science can apply. The eligibility requirements may differ depending on the loan scheme.

Interest Rate

For the Baroda Gyan scheme, loans up to Rs 7.5 lakh carry an interest rate of 9.90 per cent, while loans above Rs 7.5 lakh are offered at 9.80 per cent. Under the Baroda Yodha Education Loan Scheme, children of defence personnel can avail education loans at an interest rate of 9 per cent.

Students can check the complete list of education loan schemes and eligibility criteria on Bank of Baroda’s official website bankofbaroda.bank.in/loans/education-loan.

ICICI Bank Education Loan Highlights

ICICI Bank provides education loans of up to Rs 3 crore, depending on factors such as the country of study, course, institution and the applicant’s eligibility. The bank also offers an online education loan calculator to help students and parents estimate the eligible loan amount and applicable interest rate.

Interest Rates by Course

ICICI Bank’s education loan interest rates generally start at 9 per cent for secured loans and 10.25 per cent for unsecured loans. However, the applicable rate varies according to the course and institution.

For engineering and management programmes at select institutes, secured loans start at 8.50 per cent, while unsecured loans begin at 9.25 per cent. For other eligible institutions, secured loans start at 9 per cent, whereas unsecured loans carry interest rates from 9.75 per cent. For medical courses, secured loans begin at 8.75 per cent, while unsecured loans start at 9.50 per cent.

A secured education loan requires collateral and generally comes with lower interest rates and higher borrowing limits. An unsecured education loan does not require collateral and is approved based on factors such as the applicant’s and co-applicant’s income, repayment capacity and credit profile.

CGFSEL Collateral-Free Loans

The Credit Guarantee Fund Scheme for Education Loans (CGFSEL) supports students by providing credit guarantees for collateral-free education loans of up to Rs 7.5 lakh. The scheme aims to help students, especially those from economically weaker sections, access financial assistance for higher education. It follows the margin norms prescribed under the IBA Model Education Loan Scheme.

Indian Banks’ Association (IBA) Model Education Loan Scheme

The IBA Model Education Loan Scheme is a common framework developed by the Indian Banks’ Association (IBA) in line with RBI guidelines to make education loans more transparent and accessible for students pursuing higher education in India and abroad.

Under the revised provisions, no margin is applicable for education loans up to Rs 7.5 lakh that are covered under the credit guarantee scheme. For loans beyond this limit, banks may require a 5 per cent margin, depending on the applicable loan scheme and bank policy.

Who Can Apply For Educational Loans?

• Must be an Indian citizen.
• Must have secured admission to a recognised institution in India.
• A parent, guardian or spouse generally acts as a co-applicant.
• A good academic record may improve loan approval chances.
• Additional eligibility may vary across banks.

How Much Time Students Get To Repay These Loans?

Banks generally do not require students to start full EMI payments immediately. Most offer a moratorium period that includes the course duration plus an additional period (commonly one year after course completion). After this, repayment begins and can extend up to 15 years depending on the loan scheme. 

Documents Commonly Required

Students should keep these documents ready before applying:

• NEET, JEE, CUET, CLAT or other entrance exam scorecard (if applicable)
• Admission letter from the institution
• Fee structure issued by the college
• Aadhaar Card and PAN Card
• Address proof
• Passport-size photographs
• Parent or guardian’s income proof
• Bank statements
• Collateral documents (if applicable) 

Education loans have become an important source of financial support for students pursuing higher education in India. Public sector banks such as SBI and Bank of Baroda generally offer competitive interest rates and longer repayment tenures, while private banks like ICICI provide customised loan options based on the student’s profile and institution. Before applying, students should compare the interest rate, maximum loan amount, collateral requirement, repayment period and processing charges to choose the option that best fits their needs.