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All You Need to Know About Getting a Student Loan in India

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January 11, 2023


What’s Inside

If you’ve considered studying further or were planning it for a child, then you’re probably aware of the cost of higher education. It also means you are familiar with student loans and might have even tried to find out how to get a student loan.

If you wish to get a student loan for yourself or for your child, here’s what you need to know. 

What do student loans cover?

A student loan is a sum of money borrowed specifically to cover the cost of one’s graduation, post-graduation or higher education courses in India or abroad. It covers your tuition fees, accommodation charges, books, supplies, travel and miscellaneous expenses related to the course. However, these particulars and the extent of coverage may vary from lender to lender.   

Features of a student loan 

Before applying for a student loan, it is important to understand a few details about these loans.


You can apply for a student loan without collateral if the loan amount is less than ₹7.5 lakh. However, if the borrowed amount exceeds this threshold, you will need to provide a third-party guarantor and collateral. 

For loans below ₹4 lakh, no guarantor or collateral is needed. If you borrow a sum between ₹4  lakh to ₹7.5 lakh, the loan must be secured by a third-party guarantor. 

Margin money

Loans issued for courses in India come with a 5% margin requirement, while those issued for studies abroad attract a 15% margin requirement. However, if the loaned amount is less than ₹4 lakh, you won’t need to make a margin down payment. 


Student loans don’t need to be repaid immediately as repayment only starts six months to a year after the course has ended. The repayment period for a student loan varies from 5-7 years, with some lenders extending this window up to 15 years. 

Interest rate

Student loan interest rates vary based on the loan amount, selected course and institution, tenure, and a list of other factors. Depending on the lender’s base lending rate and all these factors, student loan rates in India can vary from 7.95% to 16%.

Fees and charges

Apart from the loan EMI and interest payments, there are processing fees, late fees and prepayment charges applicable on student loans. Each of these add-on expenses will vary depending on the lender you pick. 

Tax exemption

The applicant or co-signer of a student loan can claim tax rebates on interest paid under Section 80E of the Income Tax Act. 

Documents and Eligibility 

To get a student loan in India, you will have to meet certain eligibility criteria and produce valid documents to verify your application. Here’s an eligibility and documents cheatsheet you should keep handy if you want to apply for a student loan.

Eligibility Criteria

  • The applicant should be an Indian citizen aged 18-35 years when applying for the loan.
  • The applicant should have secured admission to the selected course before applying for the loan.
  • The applicant should have completed her/his higher secondary education. 
  • Your co-applicant's monthly income should match the minimum income parameters of the lender.
  • A good academic record is a bonus.

While these are the general eligibility criteria, they can vary from lender to lender. For instance, some lenders don’t have an age cap on education loans, while some grant loans, even before the study application is approved by the selected University or college. 

Documents Needed

  • KYC documents, including identity and address proofs of the applicant 
  • College admission letter
  • Income proof (ITR, salary slips, bank statements) of the co-signer 
  • A document outlining the course fee structure

This list will vary depending on your lender’s guidelines. Check the lender’s website for eligibility and document details. 

Where to get a student loan in India?

All government and private banks in India offer education loans. Most applicants prefer government banks, given the subsidised rates of interest offered by such lenders. 

You can also approach an NBFC. However, the interest rates and processing fees might be higher than the ones offered by banks. 

Some lenders also have a list of pre-approved institutions covered by their loan facility. Make sure you review this list before applying for the loan. 

Once all that’s done and dusted, you proceed to the application stage. There are primarily two ways of applying for a student loan - online and offline channels. 


You can visit the bank or NBFC’s website to apply for a student loan online. Simply fill out the online application form and upload the necessary documents. Most financial institutions also offer virtual assistance for online applications. 


You can visit the nearest bank branch and apply for the student loan in person. This will entail filling out a physical application form and submitting the required documents. 

If your application is approved, you will receive a loan approval letter that needs to be duly signed and submitted. 

You can also apply for and track student loan applications in India through the government-regulated Vidya Lakshmi portal.

Getting a student loan in India is a hassle-free process as education loans have been classed as priority products under the RBI’s directive. You can get a seamless application process, easy terms and comfortable repayment windows. However, it is still important to do your due diligence and compare terms before selecting a lender. 

Frequently Asked Questions

1. What do you need to qualify for a student loan?

You need to be a student willing to pursue an educational course -either in India or abroad- to qualify for a student loan. You will need to produce certain documents to prove this eligibility, including KYC papers, course approval letter, fee structure, income proof of your co-signer, etc. 

2. Can I get a student loan easily?

Yes. Getting a student loan in India is quite easy as all government and private banks and NBFCs offer such loans. The eligibility criteria and document list for such loans are basic to ensure that the application process is simple. 

3. How much loan can a student get?

The loan amount generally varies depending on the selected course and the lender’s policies. The maximum loan amount can range up to ₹1.5 crore. 

4. What is the fastest way to get a student loan?

You can apply for an NBFC education loan. Doing so will help cut down on the time needed for processing the application and disbursing the loan amount. Generally, education loans take up to 15 days to be processed. However, NBFCs offer faster processing benefits, although the fees and interest rates might be higher than banks. 


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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