Best Education Loan in India

Education loans in India are vital for students aiming to pursue higher studies domestically or abroad. Here's a quick guide to the top education loan options in 2025:

Key Highlights:

• Interest Rates: Start from 7.55% per annum.
• Loan Amounts: Range from ₹1 lakh to ₹1 crore or more.
• Types of Lenders:
  
• Public Banks: Lowest rates (7.55% - 11%).
• Private Banks: Flexible terms (9% - 14%).
• NBFCs: Relaxed criteria (11% - 16%).

Benefits:

• Moratorium Period: Course duration + 6-12 months.
• Tax Benefits: Interest payments deductible under Section 80E.
• Collateral-Free Loans: Available for select institutions and amounts.

Top Loan Providers:

1. SBI Global Ed-Vantage: Loans up to ₹1.5 crore for international studies with rates starting at 9.15%.
2. PNB Udaan: Need-based loans with added benefits for top-ranked universities.
3. Axis Bank: Unsecured loans up to ₹75 lakh with flexible repayment options.
4. HDFC Credila: Custom loans with academic performance-based rates.
5. Propelld: Fully digital, collateral-free loans up to ₹50 lakh.

Quick Comparison Table:

Each lender has unique benefits, so choose based on your course, institution, and financial needs.

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1. SBI Global Ed-Vantage Scheme

SBI Global Ed-Vantage Scheme provides financial support for students pursuing higher education abroad, offering loans ranging from ₹20 lakh to ₹1.5 crore with interest rates between 9.15% and 11.15%. It covers studies in countries like the USA, UK, Australia, Canada, Europe, Japan, Singapore, and Hong Kong.

The scheme also offers special benefits. Female students get a 0.5% interest rate concession, and those opting for SBI’s Life Insurance scheme (SBI Life Rinn Raksha) receive an additional 0.5% interest rate reduction.

Security Requirements

• Collateral is mandatory for most loans.
• Loans up to ₹50 lakh may be collateral-free for select premier institutions.
• Third-party collateral is also acceptable.

Repayment Terms

During the course and moratorium period, only simple interest is charged. Full repayments begin 6 months after completing the course and can extend up to 15 years through EMIs. However, delays in repayment attract a penalty of ₹500 (plus taxes) and an extra 2% monthly penal interest for loans exceeding ₹4 lakh.

The processing time for the loan is approximately 20-25 days. To expedite the process, students should prepare key documents like admission letters, academic records, income proof, and collateral details in advance.

This scheme is ideal for students enrolled in fields such as science, technology, education, mathematics, management, and medicine at recognized international institutions. Additionally, borrowers can avail of tax benefits under Section 80(E) of the Income Tax Act, making it a well-structured option for financing overseas education.

With its flexible terms and competitive features, the SBI Global Ed-Vantage Scheme stands out as a strong choice for Indian students planning to study abroad.

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2. PNB Udaan Scheme

The PNB Udaan Scheme provides financial support to students pursuing education abroad, offering competitive interest rates and flexible terms. Floating interest rates range from 9.25% to 11.25%, while fixed rates fall between 10.25% and 12.75%.

Security and Margin Requirements

For loans up to ₹7.50 lakh, parents or guardians must act as joint borrowers. Loans exceeding this amount require tangible collateral security equal to 110% of the loan value. This collateral can be provided by either family members or non-family members.

Key Benefits

• A 15% margin applies to loans above ₹4 lakh.
• Students receive a 1% interest concession for regular payments during the moratorium period.
• The repayment holiday extends through the course duration plus one year.
• Additional interest rate concessions are available for students admitted to the top 50 ranked universities.
• Scholarships offered by universities may contribute to the student margin requirement (10-15%).

Fund Disbursement

PNB ensures quick fund disbursement in line with RBI's Liberalized Remittance Systems. Funds can be transferred through various channels, including:

• Forex-authorized branches
• SWIFT transfers
• Direct remittance to institutions
• Foreign Travel Cards

The scheme primarily supports job-oriented professional courses such as MS, MBA, MCA, and specialized programs like CIMA-London and CPA (USA). For aviation and shipping courses, secured employment abroad after course completion is mandatory.

Next, we’ll take a closer look at the Axis Bank Education Loan, which offers another viable option for students planning to study overseas.

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3. Axis Bank Education Loan

Axis Bank offers a well-rounded education loan option, catering to both secured and unsecured needs. Whether you're planning to study in India or abroad, the bank provides flexible loan amounts and competitive rates based on the loan size.

Interest Rate Structure

Axis Bank uses a tiered interest rate system, which depends on the loan amount:

• Up to ₹4 lakhs: 15.20% (Repo Rate 6.50% + Spread 8.70%)
• ₹4 lakhs to ₹7.5 lakhs: 14.70% (Repo Rate 6.50% + Spread 8.20%)
• Above ₹7.5 lakhs: 13.70% (Repo Rate 6.50% + Spread 7.20%)

Eligibility Requirements

To apply, you need to meet these criteria:

• Be an Indian citizen aged 18 or older.
• Have at least 50% marks in your HSC and graduation exams.

For full-time courses, a co-applicant is mandatory. The co-applicant must:

• Earn a minimum monthly income of ₹35,000 (free of obligations).
• Have a CIBIL score over 700.
• Maintain a stable income source.

Once these conditions are met, the application process is straightforward, with quick approvals and disbursements.

Loan Processing and Disbursement

Axis Bank typically processes loan applications within 15 working days. After all documents are submitted, disbursement usually takes 7-15 days. The process is faster for students admitted to premier institutions.

Security Requirements

For loans above ₹50 lakhs, collateral security is required. Accepted forms of collateral include:

• Residential flats
• Houses
• Commercial shops

Special Features

Axis Bank's education loans come with several perks:

• 100% tax benefit on interest paid under Section 80(E).
• No foreclosure charges.
• Option to pay simple interest during the course duration.
• Doorstep document collection service.
• Special interest rates for students from premier institutions.
• Zero margin money for prime category students.

This combination of features makes Axis Bank a reliable choice for funding your education dreams.

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4. HDFC Credila Education Loan

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HDFC Credila is a dedicated education finance institution with a strong global footprint. It offers tailored options for both secured and unsecured education loans, catering to a variety of financial needs.

Performance-Based Interest Rates

HDFC Credila provides interest rates influenced by academic performance, particularly for students heading abroad. Here's how GRE scores impact loan terms:

Quick Processing and Disbursement

HDFC Credila ensures a swift process, with initial approval completed in 4-5 working days after verifying documents. Loan disbursement is processed within 24 hours once formalities are finalized. The sanction letter is valid for six months, and tuition fees already paid can be reimbursed.

Special Features

• Zero Margin Money: Students aren't required to make an upfront contribution.
• Flexible Repayment Options: Borrowers can opt to pay partial interest during their study period.
• Insurance Coverage: Credit life insurance is available, with a premium ranging from 1.25% to 1.5% of the loan amount.
• Multiple Disbursement Options: Funds can be sent via wire transfer or forex transfer.

International Loan Terms

HDFC Credila offers competitive rates for students studying in various countries:

• Canada: 11.75% - 12.50%
• UK: 12% - 13%
• Australia/New Zealand: 12% - 13%
• European Countries (Germany, Ireland, France, Italy): 12% - 12.75%

With coverage extending to over 4,600 institutions worldwide, HDFC Credila provides a well-rounded solution for students seeking financial support for their education abroad.

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5. Propelld Education Loan

Propelld has carved out a niche in the education loan market with its digital-first approach, offering a modern alternative to traditional bank loans. It provides collateral-free loans of up to ₹50 lakhs, with a unique focus on academic performance for approval, making it an attractive choice for students.

Propelld’s reliance on digital processes and academic evaluations sets it apart from conventional lenders, offering a fresh perspective on education financing.

A Fully Digital Process

Propelld has simplified the loan application process with a completely digital system. This paperless approach ensures quick verification and disbursement, which is especially beneficial for students facing tight deadlines for fee payments. Compared to traditional banks, this streamlined process is far more responsive and efficient.

Academic Performance as a Key Factor

What makes Propelld especially appealing is its focus on academic merit rather than traditional credit scores. This is a game-changer for students who may lack a strong credit history or substantial family income.

"My exam dates were approaching, and I couldn’t pay my fees because my loan applications were rejected elsewhere. Propelld approved my loan based on my academic performance", says Vanshika, a recent beneficiary.

Flexible Repayment Plans

Propelld offers several repayment options tailored to students' needs, including moratoriums during the study period, income-share agreements, study-now-pay-later plans, and adjustable EMIs. These options give students the flexibility to manage their finances effectively.

Positive Customer Experiences

The platform has received glowing feedback from users, highlighting its simplicity, quick processing, and excellent customer service. Propelld’s partnerships with educational institutions, particularly in technical fields, further reinforce its credibility.

"Choosing Propelld for my student loan was the best decision I made. The platform is easy to use, the process is seamless, and the customer service is outstanding", shares Karamveer, a satisfied user.

With its fast processing, academic merit-based approval, and flexible repayment options, Propelld has become one of the top choices for education loans in India.

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Approval Based on Your 12th Marks. No Co Applicant Required. Check Your Eligibility with Propelld Education Loan

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Features Comparison of Top 5 Education Loans 

Here’s a quick look at how the leading education loan providers stack up in 2025:

Let’s break down what makes each provider stand out:

• SBI Global Ed-Vantage: With a competitive interest rate of 9.65%, zero processing fees for loans up to ₹7.5 lakh, and high loan limits reaching ₹3 crore, this is a solid choice for students planning to study abroad.
• HDFC Credila: Offers both secured and unsecured loan options with interest rates starting at 10.25%. The processing fee ranges from 0.75% to 1.25%, making it a flexible option for students needing tailored solutions.
• Axis Bank: While their interest rates (13.70%-15.20%) and processing fees (up to 2% + GST) are on the higher side, Axis Bank may still appeal to those who prioritize quick approvals.
• PNB Udaan: This plan caters well to domestic students, offering interest rates between 10.75% and 12% and waiving processing fees for Indian students. It strikes a balance between affordability and accessibility.
• Propelld: Designed for students without traditional credit histories, Propelld uses a fully digital process and bases its interest rates on academic performance. The collateral-free approach makes it a great option for those needing fast and hassle-free funding.

"My exam dates were approaching, and I couldn't pay my fees because my loan applications were rejected elsewhere. Propelld approved my loan based on my academic performance", says Vanshika, a recent beneficiary.

"Choosing Propelld for my student loan was the best decision I made. The platform is easy to use, the process is seamless, and the customer service is outstanding", shares Karamveer, a satisfied user.

These comparisons highlight the unique strengths of each provider, helping students find the best match for their financial and academic needs. Whether you’re looking for low rates, high loan limits, or a quick digital process, there’s an option for everyone.

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Summary and Recommendations

Based on the detailed comparison above, here's a streamlined guide to help you pick the right education loan for your needs.

For domestic studies, SBI offers a competitive 10.65% interest rate on loans up to ₹7.5 lakh without collateral. PNB provides another solid option with rates ranging from 8.65% to 10.35%. If you're planning to study abroad, the SBI Global Ed-Vantage program stands out with loans up to ₹3 crore at 9.65% interest - perfect for students heading to countries like the UK, Australia, or New Zealand, offering visa-friendly secured loans. For larger amounts, HDFC Credila funds up to ₹80 lakh with rates between 11.5% and 13.5%. Need fast, collateral-free funding? Propelld offers a digital platform with merit-based approvals for loans up to ₹50 lakh.

The table below summarizes the best options for different student profiles:

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FAQs on Best Education Lone in india

1. What is a collateral-free education loan?
A collateral-free education loan is a loan provided without the need to pledge any asset or security. These loans are offered based on the applicant’s academic profile, the institution’s reputation, and the co-applicant’s financial strength.

2. How much can I borrow without providing collateral?
Public sector banks generally offer up to ₹7.5 lakhs without collateral. NBFCs and private lenders may approve higher amounts—up to ₹50 lakhs or more—based on course, country, and borrower profile.

3. Which lenders in India offer unsecured education loans?
Key lenders include SBI, PNB (for loans up to ₹7.5L), and NBFCs like HDFC Credila, InCred, Auxilo, and Propelld, which may approve higher limits for premium institutions.

4. Can I get a collateral-free education loan for studies abroad?
Yes. Many NBFCs and banks provide unsecured loans for studying abroad, especially for countries like the USA, UK, Canada, Germany, and Australia, and for courses in reputed universities.

5. Is a co-applicant mandatory for unsecured education loans?
Yes, in most cases a co-applicant is required—typically a parent or guardian. Some NBFCs may waive this requirement for strong profiles or fully-funded courses.

6. Does the institute’s ranking affect loan approval?
Absolutely. Lenders prefer top-ranked or government-recognized institutions, as these are seen to offer better placement opportunities and reduce risk.

7. Do collateral-free loans cover living expenses and other costs?
Yes. These loans generally cover tuition fees, living expenses, travel, insurance, and other academic-related costs like books or laptops, subject to the sanctioned amount.

8. Can I get an unsecured loan for diploma or certificate programs?
Yes, select NBFCs and lenders like Propelld offer unsecured loans for skill-based or professional diplomas—especially when the institution has strong placement support.

9. What is the repayment schedule for unsecured education loans?
Repayment typically starts after the moratorium period (course duration + 6–12 months). The loan can be repaid over a period of 7 to 15 years, depending on the lender.

10. What interest rates apply to collateral-free loans?
Rates for unsecured education loans usually range from 10% to 14%, depending on the borrower's profile, co-applicant, and institution/course selection.

11. Can academic performance impact the interest rate?
Yes. Lenders like Propelld and HDFC Credila may offer lower rates to students with high academic scores, strong entrance exam results, or admission to high-ROI courses.

12. Are there processing fees for unsecured loans?
NBFCs and private banks usually charge processing fees (ranging from 0.5% to 2% of the loan amount). Public banks may charge minimal or no fees for smaller loans.

13. What happens if I am unable to find a job after graduation?
Repayment is still required, but many lenders offer flexible options such as extended moratoriums, EMI restructuring, or grace periods in such situations.

14. Can I prepay my unsecured education loan early?
Yes, most lenders allow early repayment. Some may charge a small penalty, while others—like Propelld—often waive prepayment charges.

15. Can I transfer my secured loan to an unsecured loan later?
Some NBFCs offer balance transfer options if your profile improves, allowing you to switch from a secured to an unsecured loan with better terms.

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