In the era of quality education and a competitive world, you need to have a good education, however, the cost of education often poses a significant barrier for many students.
This is where education loans step in, offering a lifeline that enables aspiring learners to pursue their dreams without being burdened by financial constraints.
Education loans provide the necessary funds to cover tuition fees, books, accommodation, and other educational expenses which would otherwise be very costly.
They serve as a crucial bridge between ambition and achievement, empowering students to access the knowledge and opportunities they need to succeed.
Education loans play an important role in making education accessible. They remove the financial barriers that can otherwise limit educational opportunities for talented individuals.
Education loans open doors to transformative experiences, allowing students to develop skills, expand their horizons, and gain a competitive edge in the job market.
Education loans serve as catalysts for individual growth, societal progress, and economic development.
They enable dreams to take flight and empower students to reach their full potential. In this article, we will discuss Education Loan Interest Rates in 2024, Compare Student Loan Rates, etc.
Table of Contents
Education Loan Interest Rate 2024
| Banks | Interest Rates | Processing Fees |
| Union Bank of India | 8.20% p.a. onwards | Nil |
| State Bank of India | 8.20% p.a. onwards | No charge is required for loan amounts below Rs.20 lakh Loan amount above Rs.20 lakh: Rs.10,000 (plus taxes) |
| Punjab National Bank | 8.55% p.a. onwards | Rs. 250 plus GST |
| IDFC FIRST Bank | 9.00% p.a. to 15.00% p.a. | Up to 1.5% of the loan amount |
| Bank of Baroda | 9.15% p.a. onwards | No processing charges up to Rs.7.50 lakh 1% of loan amount up to Rs.10,000 |
| Canara Bank | 9.25% p.a. onwards | Refer to the bank’s website |
| Bank of Maharashtra | 9.45% p.a. onwards | 0.50% of the loan amount |
| HDFC | 9.50% p.a. onwards | As per the criteria of the bank |
| Indian Overseas Bank | 9.75% p.a. onwards | Contact the bank |
| ICICI Bank | 9.85% p.a. to 15.50% p.a. | Up to 2% plus GST |
| Karnataka Bank | 9.95% p.a. onwards | Contact the bank |
| Tamilnad Mercantile Bank | 11.15% p.a. to 12.40% p.a. | No processing charge for studies in India 1% of the loan amount for studies in abroad |
| Karur Vysya Bank | 11.48% p.a. to 13.98% p.a. | Nil |
| Axis Bank | 13.70% p.a. to 15.20% p.a. | 2.00% of the loan plus GST |
| IDBI Bank | Contact the bank | Contact the bank |
| Bank of India | Contact the bank | No charge required for loan amount below Rs.20 lakh Loan amount above Rs.20 lakh: Rs.10,000 (plus taxes) |
| UCO Bank | Refer to the bank’s website | Refer to the bank’s website |
| Federal Bank | Contact the bank | Contact the bank |
| Kotak Mahindra Bank | Up to 16% p.a. | Nil |
| Kotak Mahindra Bank | Up to 16% p.a. | Nil |
Eligibility Criteria for Education Loan
The following are the eligibility criteria for Education Loan-
- The applicant must be a citizen of India
- Most lenders have a minimum age requirement for loan applicants, usually ranging from 18 to 35 years
- An admission letter or confirmation from the educational institution stating that you have been accepted into the program of your choice
- A guarantor is required for the loan. The lender may request income proof or financial documents to assess their ability to fulfill the loan obligations
- You may need to provide a copy of your passport, I-20 form (for the United States), or visa documents to demonstrate your intention and eligibility to study in the respective country
How to Apply for Education Loan?
The following are the steps that you can take to apply for the Education Loan-
- The very first step is to explore different lenders for loans and Compare interest rates, repayment terms, and other loan features to find the most suitable option for your needs
- Make sure that your review the eligibility criteria set by the lender beforehand
- Now, gather all the documents mentioned below
- After the pre-application process is complete, you’ll have to contact and then initiate the loan application process and fill out the application form
- The lender will review your application, documents, and eligibility criteria. The lenders may conduct a credit check and assess the feasibility of the loan based on your financial profile and the collateral provided (if applicable)
- Upon acceptance of the loan offer, the lender will finalize the loan agreement and disburse the funds to the educational institution or to your account
Documents Required
The following are the documents required to apply for the loan application:
- Fully filled in the application form with passport-size photographs affixed as required
- Admission letter on letterhead of the educational institute
- Academic certificates of the applicant
- Marksheets of entrance examination, if any
- Scholarship document, if any
- A declaration that no loan has been availed from another lender
- Proof of identity such as an Aadhaar card/passport/driving license/Permanent Account Number (PAN Card) card, etc.
- Proof of address or residence such as utility bills/ration card/Aadhaar card/passport, etc.
- Proof of age such as a birth certificate or 10th standard certificate
FAQ
There are two main types: government-backed education loans and private education loans. Government loans are often offered at lower interest rates and have more flexible repayment terms whereas private education loans are higher interest rates.
Education loans can cover various expenses related to education, including tuition fees, living expenses, books, supplies, equipment, and sometimes even travel costs.
Repayment typically begins after the completion of the education program, though some lenders may offer a grace period. The repayment term can vary from several years to several decades or until job of the native is finalized.
Yes, education loans can be used to finance education expenses for studying abroad. However, additional documentation, such as passport, visa, and admission confirmation from an overseas institution, may be required.
I’m Shiv Kumar, a graduate with a passion for finance, marketing, and technology. My journey into finance started with a desire to understand money management and investing.
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