Education, especially higher education, being a costly affair in present scenario, is pursued by many by taking loans. The enrollment fees for higher education courses range from 4 to 50 lakhs, in various institutes, depending on the course being pursued. For this purpose, taking an education loan is an option explored by many students. One of the main benefit of the education loan is that the loan repayment period starts not before than one year after the end of studies or six months after securing a job, whichever comes earlier. The process of applying for education loan is simpler with only the documentation process being a lengthy affair.

Documentation required:

As per the standard operating procedure, the following documents are needed to initiate the loan application process.

  1. Letter of admission
  2. Recent passport size photographs
  3. Duly filled and signed loan application form
  4. Statement of cost of study
  5. PAN Card, AADHAR card of student and parent/guardian
  6. Proof of identity and proof of residence
  7. IT returns or IT assessment order of previous two years of the co-borrower
  8. Statement of assets and liabilities of parent/guardian
  9. Proof of income of parent/guardian

Additional Read: Education Loan from NBFCs: Pros and Cons


To avail the benefits of the education loan, the applicant must be an Indian national and must have secured admission in an educational institution that is recognized by the bank or financial institution. The loan amount will be disbursed directly to the educational institution or the vendor, as and when there is a requirement.

It might be necessary to submit the HSC and SSLC certificates in addition to the degree mark sheet.

In certain cases, like SBI education loan Insurance covering the life of the borrower with the policy assigned in favor of SBI is mandatory.
The amount of education loan that would be sanctioned depends on the course fees and the down payment that one can afford to pay. For securing admission in Indian institutes, for a loan above Rs 4 lakhs, one needs to pay minimum 5% down payment while for securing admission in foreign universities, the down payment amount increases to 15%.

For studies in India, graduation and post-graduation technical courses (degree and diploma) conducted by colleges approved by UGC, AICTE, IMC and the government of India are covered. Also, teacher training, nursing courses and other diploma courses like pilot training, shipping etc. as approved by the concerned regulatory authority are covered under the loan.

From the personal loan eligibility criteria, it can be understood for wide number of courses, loans are provided across the country, by various lenders Regarding the rate of interest part, it starts from 9%.

The education loan interest is also eligible for tax deduction under the section U/S 80E of the income tax act 1961.

Additional Read: How long does it take to get a Student Visa to Canada?

So, when one can avail so many benefits by taking an educational loan, it is always better to avail the same and take benefits along with getting a degree. Education loans come under the umbrella of personal loans, however they also enjoy great tax benefits.

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