cross icon
loan apply banner 2
cross buton

Explore collateral free education loans - check list of banks, eligibility, documents required, how to choose the right loan and get your application approved.

Education Loan at Zero Interest Rate - Is it Possible?

Education is the base for any individual. It is that gift that ensures a person grows personally and professionally. One of the primary requirements for anyone to pursue education is money. 

With the changing times, education loans have emerged as a support for many aspiring students who had to give up on their dreams due to finances. However, it comes with its own cost, in the form of loan interest. It thus becomes a normal question to ask, if I can get an education loan on zero interest. 

Can I Get an Education Loan without Interest?

Unfortunately, obtaining an education loan without interest is not possible.

For those seeking zero-interest loans for students, it's important to understand that student loans operate like other credit products. Therefore, banks or lenders will apply interest charges as usual.

However, education loans offer several advantages, such as a moratorium period that extends until the completion of studies. During this period, only simple interest is levied on the loan amount. You are required to pay only the interest during this period.

Looking for Education Loan? Here to Listen. Dedicated Support. Hassle Free Loans. Apply Now.

Which Bank Gives Interest Free Education Loan?

In India, most banks and NBFCs offer a variety of education loan schemes. You might be searching for an education loan at 0 interest, but no bank in India offers interest free education loans.

However, the top banks and NBFCs you can consider for taking an education loan are -

Bank/Institution Loan Amount Interest Rates
State Bank of India Up to Rs.1.50 Crore Range from 8.20% to 11.15%
HDFC Bank Up to Rs.150 Lakh 9.50% onwards
ICICI Bank Up to Rs.2 Crore 9.85% onwards
Axis Bank Up to Rs.50 Lakh Range from 13.70% to 15.20%
IDFC First Bank Up to Rs.75 Lakh Range from 9% to 15%
Avanse Rs.1 Lakh onwards 14.24% onwards
HDFC Credila Depends on your requirement Credila Benchmark Lending (12.30% current) Rate + Depends on your credit profile, collateral offered, the course undertaken, etc
Auxilo Depends on your requirement 8% onwards

Apart from these, there are NBFCs like Propelld that provide easy education loans with minimum documentation and superfast processing. These new age lenders understand the student requirements, their aspirations and are aligned with them, thus providing hassle free education loans that cover 100% fees. 

Why are Education Loans at Zero Interest Not Available?

While the idea of interest-free education loans seems appealing for students, it poses challenges for the other stakeholders. Finding a balance between affordability for students and sustainability for lenders is a crucial factor in shaping education financing products.

Lets see some of the major reasons why a zero interest education loan might not be a possibility: 

Financial Liability on Lenders

Offering education loans at 0% interest would impose a significant financial burden on lending institutions. These loans incur operating costs, including administrative expenses, loan processing, and overheads. Without interest, lenders would struggle to cover these costs, potentially leading to losses or reduced availability of funds for other borrowers.

Financially Unstable for the Government

Government entities often subsidize education loans to make them affordable for students. However, providing loans at 0% interest would strain government finances, especially in countries with large student populations. It would require allocating substantial funds from the budget, impacting other responsibilities of the government.

Impact on Credit History

Education loans contribute to building credit history for borrowers. Most of these borrowers are first time borrowers as students. By repaying loans with interest, students demonstrate financial responsibility, which positively affects their credit scores. 

Offering loans at 0% interest could diminish the incentive for timely repayments, potentially impacting credit histories negatively. This may hinder students' ability to access credit in the future for other purposes, such as buying a home or starting a business. 

Education Loan at Low Interest in India

As we already discussed, in India, no loan comes without an interest. 

However, usually, there is a moratorium period where the borrower does not have to pay any EMI. Once the period is complete, the person has to start making the payments. 

It is challenging to find an education loan without interest in India, but there are several schemes and initiatives that help students get financial benefits.

There are scholarships and government schemes to reduce the financial burden of aspiring students. 

Apart from these,  financial institutes, non-profit organizations, and educational institutes also offer initiatives to promote affordable education.

Skip the Wait, Get Your Loan Quick! 10X Faster Education Loans than Banks Higher Approval Rates| Apply Now

Advantages of Interest Free Loans in India

These low interest loans come with multiple benefits and assist youths in higher and technical education. The following are the benefits of an education loan at low interest:

  1. It reduces the financial burden and reduces the overall cost of the loan. It becomes more manageable for a student and offers the borrower ease.
  2. With lower monthly repayments, students handle their financial obligations better. It also gives them affordable responsibilities, unlike loans with interest.
  3. It contributes to inclusivity by offering equal opportunities for students with diverse backgrounds. It bridges the gap between different sects of the society.
  4. It pushes and encourages students to go for education without fearing debt accumulation. It lets them pick a professional path they wish to choose.
  5. Government initiatives, schemes, banks with low interest education loans, and other institutes send a positive message. They emphasize the value of education.
  6. They contribute to youth with better economic outcomes. It also showcases a commitment towards investing in the country's youth.

Eligibility for Interest Free Loans

Before applying for any education loan, you must learn about the eligibility and its needs. 

Any citizen who is a citizen of India is eligible to apply for an education loan. Usually, the age criteria stand between 18 to 30-35 years. 

The applicant must secure admission to recognized institutes in India and must provide the necessary documents for the interest free education loan loan processing. 

The eligibility and needs also change in different institutes, schemes, and initiatives. It varies as per the norms and needs of the provider. Having an insight about it and making a checklist ensures smoother processing. 

 

How to Get an Education Loan at Zero Interest in India?

Now that we know that a 0% interest rate education loan is not possible, let’s see how we can get a cost efficient education loan with a low interest rate. 

  1. Credit Score: A high credit score is essential when you look for an education loan. It speaks of your creditworthiness and helps you have an upper hand. Often, it also helps you secure low interest rates on loans. 
  2. Secured Loans: Go for reputed institutes and opt for a secured education loan. It offers security for both parties and contributes to cost-effectiveness.
  3. Educational Institutes: Get through and secure a position in reputed and renowned institutions. It gives you leverage and offers you better loan options and opportunities.
  4. Subsidies and Schemes: The government and institutions always design schemes, scholarships and initiatives for girl students and various other categories of students. Remain vigilant about these schemes, and you will bag the best.
  5. Plan Well: Paying a higher margin while picking up a loan is safer. It reduces the doubts and gives a better mindmap of your loan payment with time.
  6. Prioritize Loan Payment: Once the payment period starts, always keep your loan payment first. Education loans require timely EMI payment to exempt you from extra interest amounts. 
  7. Avoid Taking Moratorium: Although most lenders provide a moratorium period that is EMI holiday, we would suggest paying the loan as much as possible during that time also. This would avoid the accumulation of interest. 
  8. Pay Extra Whenever Possible: Save and grab every opportunity to pay extra. Thus reducing the tenure and interest accumulation on your borrowed amount.

Loan Approval on 12th Marksheet. Minimum Documentation. Competitive Interest Rates. Apply Now.

How to Repay Your Education Loan

It's not about how to pay your loan, it's how to pay your loan to make it work like a zero interest education loan. If not exactly, we can follow strategies that reduce the interest accumulation on our loan amount.

Understanding loan terms

Always be clear about what your loan terms and conditions say. Read the agreement, including the interest, repayment period, moratorium, etc. It is best to ask the lender if you do not understand.

Make a budget

Even if you have a moratorium period, creating a budget helps. It helps you rule out future liabilities by creating a habit and helping you create an expense pattern. It makes you efficient with money.

Prioritize loan payment

Once the payment period starts, always keep your loan payment first. Education loan without interest require timely EMI payment to exempt you from extra interest amounts. 

Emergency cash fund

When you create a budget, always keep some money handy as a crisis fund. It helps you have a saving and protects you if something unforeseen and unfortunate happens. Reserves are a must-have!

Explore different plans

Always ask your lender about different repayment options when looking for an education loan. It helps you have a better perspective of the plans available and lets you choose among them.

Automate payments

It is one of the best ways and answers when seeking solutions on how to pay education loan without interest. It lets your bank make automated deductions on the EMI amount and keeps you safe from interest.

Pay higher when you can

Once you start to pay off your loan, grab every chance to pay higher than the EMI. It helps you get off the loan as soon as possible. It is best to pay it off when you are capable of it.

Communicate

If you are having trouble with the payment, do not wait. Let the lender know about the issues you are going through. With a good history of EMI payment, some may offer temporary forbearance options.

Refinance your loan

Recheck on the possibility of refinancing your interest free education loan at lower rates. Look for the opportunity, as it can make your monthly payments more manageable and smooth.

Check for employer assistance

Several employers help you ward off your education loan. Such programs come to your assistance in loan repayment. It keeps your mind off debt and functions more efficiently.

Check for tax deductions

Although there is no tax deduction on the principal amount, if you are paying off the EMI of the loan on time, you can expect a deduction of the interest. It, therefore, lets you only pay the amount you borrow.

Avoid defaults

The best advice on how to pay education loan without interest comes with always paying the EMIs on time. Defaulting can have severe consequences, including credit score damage.

Hassle Free Loans Upto 50 Lacs. Repay Your Loan in 120 Months. Moratorium Available. Apply Now.

To make your education journey easier with no financial hindrances, NBFCs like Propelld provide easy education loans. 

Propelld is a leading education financing company in India. We understand the challenges students face in securing funding for their education, and we're here to bridge the gap.

What Sets Propelld Apart?

No Collateral Loans

We believe education is an investment in your future, not a burden. That's why we offer loans without requiring any collateral.

No Co Applicant Required

Get your education financed without depending on any co applicant.

Faster Approvals

Get approved for a loan in as little as 7 days, almost 10 times faster than banks. 

Minimal documentation

Our hassle-free process requires minimum documentation, saving you time and effort.

Complete Online Process

Apply for and manage your loan entirely online, from the comfort of your home.

Tailored Loan Options

We offer flexible loan amounts and repayment plans to suit your individual needs.

Wide Range of Education Financing

We support students across various education segments, from school and college to coaching and skill-up courses.

Don't let financial limitations hold you back from achieving your educational goals. Visit Propelld today to explore our loan options and take the first step towards your brighter future!

Education Loan at Zero Interest Rate - Is it Possible?

Raghuvamshi Kanukruthi
January 9, 2024
memberstack logo
Shivam Bhardwaj
March 15th 2022

Apply Education Loan

Up to Rs. 50 Lakhs for 10 Years.
10X Faster.

Thanks! We will reach out to you shortly.
Apply Now

Education Loan at Zero Interest Rate - Is it Possible?

Education is the base for any individual. It is that gift that ensures a person grows personally and professionally. One of the primary requirements for anyone to pursue education is money. 

With the changing times, education loans have emerged as a support for many aspiring students who had to give up on their dreams due to finances. However, it comes with its own cost, in the form of loan interest. It thus becomes a normal question to ask, if I can get an education loan on zero interest. 

Can I Get an Education Loan without Interest?

Unfortunately, obtaining an education loan without interest is not possible.

For those seeking zero-interest loans for students, it's important to understand that student loans operate like other credit products. Therefore, banks or lenders will apply interest charges as usual.

However, education loans offer several advantages, such as a moratorium period that extends until the completion of studies. During this period, only simple interest is levied on the loan amount. You are required to pay only the interest during this period.

Looking for Education Loan? Here to Listen. Dedicated Support. Hassle Free Loans. Apply Now.

Which Bank Gives Interest Free Education Loan?

In India, most banks and NBFCs offer a variety of education loan schemes. You might be searching for an education loan at 0 interest, but no bank in India offers interest free education loans.

However, the top banks and NBFCs you can consider for taking an education loan are -

Bank/Institution Loan Amount Interest Rates
State Bank of India Up to Rs.1.50 Crore Range from 8.20% to 11.15%
HDFC Bank Up to Rs.150 Lakh 9.50% onwards
ICICI Bank Up to Rs.2 Crore 9.85% onwards
Axis Bank Up to Rs.50 Lakh Range from 13.70% to 15.20%
IDFC First Bank Up to Rs.75 Lakh Range from 9% to 15%
Avanse Rs.1 Lakh onwards 14.24% onwards
HDFC Credila Depends on your requirement Credila Benchmark Lending (12.30% current) Rate + Depends on your credit profile, collateral offered, the course undertaken, etc
Auxilo Depends on your requirement 8% onwards

Apart from these, there are NBFCs like Propelld that provide easy education loans with minimum documentation and superfast processing. These new age lenders understand the student requirements, their aspirations and are aligned with them, thus providing hassle free education loans that cover 100% fees. 

Why are Education Loans at Zero Interest Not Available?

While the idea of interest-free education loans seems appealing for students, it poses challenges for the other stakeholders. Finding a balance between affordability for students and sustainability for lenders is a crucial factor in shaping education financing products.

Lets see some of the major reasons why a zero interest education loan might not be a possibility: 

Financial Liability on Lenders

Offering education loans at 0% interest would impose a significant financial burden on lending institutions. These loans incur operating costs, including administrative expenses, loan processing, and overheads. Without interest, lenders would struggle to cover these costs, potentially leading to losses or reduced availability of funds for other borrowers.

Financially Unstable for the Government

Government entities often subsidize education loans to make them affordable for students. However, providing loans at 0% interest would strain government finances, especially in countries with large student populations. It would require allocating substantial funds from the budget, impacting other responsibilities of the government.

Impact on Credit History

Education loans contribute to building credit history for borrowers. Most of these borrowers are first time borrowers as students. By repaying loans with interest, students demonstrate financial responsibility, which positively affects their credit scores. 

Offering loans at 0% interest could diminish the incentive for timely repayments, potentially impacting credit histories negatively. This may hinder students' ability to access credit in the future for other purposes, such as buying a home or starting a business. 

Education Loan at Low Interest in India

As we already discussed, in India, no loan comes without an interest. 

However, usually, there is a moratorium period where the borrower does not have to pay any EMI. Once the period is complete, the person has to start making the payments. 

It is challenging to find an education loan without interest in India, but there are several schemes and initiatives that help students get financial benefits.

There are scholarships and government schemes to reduce the financial burden of aspiring students. 

Apart from these,  financial institutes, non-profit organizations, and educational institutes also offer initiatives to promote affordable education.

Skip the Wait, Get Your Loan Quick! 10X Faster Education Loans than Banks Higher Approval Rates| Apply Now

Advantages of Interest Free Loans in India

These low interest loans come with multiple benefits and assist youths in higher and technical education. The following are the benefits of an education loan at low interest:

  1. It reduces the financial burden and reduces the overall cost of the loan. It becomes more manageable for a student and offers the borrower ease.
  2. With lower monthly repayments, students handle their financial obligations better. It also gives them affordable responsibilities, unlike loans with interest.
  3. It contributes to inclusivity by offering equal opportunities for students with diverse backgrounds. It bridges the gap between different sects of the society.
  4. It pushes and encourages students to go for education without fearing debt accumulation. It lets them pick a professional path they wish to choose.
  5. Government initiatives, schemes, banks with low interest education loans, and other institutes send a positive message. They emphasize the value of education.
  6. They contribute to youth with better economic outcomes. It also showcases a commitment towards investing in the country's youth.

Eligibility for Interest Free Loans

Before applying for any education loan, you must learn about the eligibility and its needs. 

Any citizen who is a citizen of India is eligible to apply for an education loan. Usually, the age criteria stand between 18 to 30-35 years. 

The applicant must secure admission to recognized institutes in India and must provide the necessary documents for the interest free education loan loan processing. 

The eligibility and needs also change in different institutes, schemes, and initiatives. It varies as per the norms and needs of the provider. Having an insight about it and making a checklist ensures smoother processing. 

 

How to Get an Education Loan at Zero Interest in India?

Now that we know that a 0% interest rate education loan is not possible, let’s see how we can get a cost efficient education loan with a low interest rate. 

  1. Credit Score: A high credit score is essential when you look for an education loan. It speaks of your creditworthiness and helps you have an upper hand. Often, it also helps you secure low interest rates on loans. 
  2. Secured Loans: Go for reputed institutes and opt for a secured education loan. It offers security for both parties and contributes to cost-effectiveness.
  3. Educational Institutes: Get through and secure a position in reputed and renowned institutions. It gives you leverage and offers you better loan options and opportunities.
  4. Subsidies and Schemes: The government and institutions always design schemes, scholarships and initiatives for girl students and various other categories of students. Remain vigilant about these schemes, and you will bag the best.
  5. Plan Well: Paying a higher margin while picking up a loan is safer. It reduces the doubts and gives a better mindmap of your loan payment with time.
  6. Prioritize Loan Payment: Once the payment period starts, always keep your loan payment first. Education loans require timely EMI payment to exempt you from extra interest amounts. 
  7. Avoid Taking Moratorium: Although most lenders provide a moratorium period that is EMI holiday, we would suggest paying the loan as much as possible during that time also. This would avoid the accumulation of interest. 
  8. Pay Extra Whenever Possible: Save and grab every opportunity to pay extra. Thus reducing the tenure and interest accumulation on your borrowed amount.

Loan Approval on 12th Marksheet. Minimum Documentation. Competitive Interest Rates. Apply Now.

How to Repay Your Education Loan

It's not about how to pay your loan, it's how to pay your loan to make it work like a zero interest education loan. If not exactly, we can follow strategies that reduce the interest accumulation on our loan amount.

Understanding loan terms

Always be clear about what your loan terms and conditions say. Read the agreement, including the interest, repayment period, moratorium, etc. It is best to ask the lender if you do not understand.

Make a budget

Even if you have a moratorium period, creating a budget helps. It helps you rule out future liabilities by creating a habit and helping you create an expense pattern. It makes you efficient with money.

Prioritize loan payment

Once the payment period starts, always keep your loan payment first. Education loan without interest require timely EMI payment to exempt you from extra interest amounts. 

Emergency cash fund

When you create a budget, always keep some money handy as a crisis fund. It helps you have a saving and protects you if something unforeseen and unfortunate happens. Reserves are a must-have!

Explore different plans

Always ask your lender about different repayment options when looking for an education loan. It helps you have a better perspective of the plans available and lets you choose among them.

Automate payments

It is one of the best ways and answers when seeking solutions on how to pay education loan without interest. It lets your bank make automated deductions on the EMI amount and keeps you safe from interest.

Pay higher when you can

Once you start to pay off your loan, grab every chance to pay higher than the EMI. It helps you get off the loan as soon as possible. It is best to pay it off when you are capable of it.

Communicate

If you are having trouble with the payment, do not wait. Let the lender know about the issues you are going through. With a good history of EMI payment, some may offer temporary forbearance options.

Refinance your loan

Recheck on the possibility of refinancing your interest free education loan at lower rates. Look for the opportunity, as it can make your monthly payments more manageable and smooth.

Check for employer assistance

Several employers help you ward off your education loan. Such programs come to your assistance in loan repayment. It keeps your mind off debt and functions more efficiently.

Check for tax deductions

Although there is no tax deduction on the principal amount, if you are paying off the EMI of the loan on time, you can expect a deduction of the interest. It, therefore, lets you only pay the amount you borrow.

Avoid defaults

The best advice on how to pay education loan without interest comes with always paying the EMIs on time. Defaulting can have severe consequences, including credit score damage.

Hassle Free Loans Upto 50 Lacs. Repay Your Loan in 120 Months. Moratorium Available. Apply Now.

To make your education journey easier with no financial hindrances, NBFCs like Propelld provide easy education loans. 

Propelld is a leading education financing company in India. We understand the challenges students face in securing funding for their education, and we're here to bridge the gap.

What Sets Propelld Apart?

No Collateral Loans

We believe education is an investment in your future, not a burden. That's why we offer loans without requiring any collateral.

No Co Applicant Required

Get your education financed without depending on any co applicant.

Faster Approvals

Get approved for a loan in as little as 7 days, almost 10 times faster than banks. 

Minimal documentation

Our hassle-free process requires minimum documentation, saving you time and effort.

Complete Online Process

Apply for and manage your loan entirely online, from the comfort of your home.

Tailored Loan Options

We offer flexible loan amounts and repayment plans to suit your individual needs.

Wide Range of Education Financing

We support students across various education segments, from school and college to coaching and skill-up courses.

Don't let financial limitations hold you back from achieving your educational goals. Visit Propelld today to explore our loan options and take the first step towards your brighter future!

Fund your College Fees with Education Loan

Loan up to Rs. 50 Lakhs for 10 Years

Thanks! We will reach out to you shortly.
Apply Now

Join our Whatsapp Channel to know more info on JEE and NEET

No Collateral Low-Interest Education Loan

Join Now!
Available in all top Coaching Institutes
Get Loan

FAQs on Education Loans at Zero Interest

What is an interest-free education loan?

An interest-free education loan is a financial aid where borrowers do not pay any interest on the principal amount borrowed during the specified period. It reduces the overall cost of the loan.

How can I qualify for an interest-free education loan?

Eligibility criteria for interest-free education loans vary depending on the lender. Academic performance, financial need, age, and field of study are primary factors.

Are education loan at 0 interest available for all courses and levels of study?

The availability of interest-free education loans may depend on the specific loan program. It is mainly for higher and technical education, but the best is to contact your lender and understand their terms.

Do I need a co-signer to get an interest-free education loan?

The need for a co-signer varies among loan programs and lenders. Some may require a co-signer, Others do not, especially if it is by government initiatives.

How is an interest-free education loan different from a traditional education loan?

Education loan without interest do not charge interest on the borrowed amount. It is more affordable for borrowers. Traditional education loans typically accrue interest, increasing the overall repayment amount.

Can I repay an interest-free education loan early without any penalties?

You do not have to pay the EMIs of the loan during the moratorium period. Later, if you pay the EMIs on time, you waver the interest. You can always pay extra and higher to get rid of the loan.

Is there a grace period before I need to start repaying the loan?

The moratorium is often the grace period given by the institute or banks with zero interest education loans. It is often different for different loan amounts and educational backgrounds. After its completion, the borrower must start making payments.

Are there income-based repayment options for interest-free education loans?

Many institutes let you go for refinancing your loan options. Employers also offer you to go for a plan where they help you waver the loan and offer assistance. Knowing tax deduction schemes also helps an individual have lesser payables.

Where can I find information about available interest-free education loans?

Government agencies, educational institutions, and financial institutions like banks with zero interest education loans offer genuine and accurate information. Relevant authorities or using online resources also help.

0 Comments

Active Here: 0
Be the first to leave a comment.
Loading
Someone is typing
Commentor dp
No Name
Set
This is the actual comment. It's can be long or short. And must contain only text information.
(Edited)
Your comment will appear once approved by a moderator.
No Name
Set
This is the actual comment. It's can be long or short. And must contain only text information.
(Edited)
Your comment will appear once approved by a moderator.
2 years ago
0
0
Load More
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Load More
comment loader
Your monthly EMI is

0 Rs.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
empezar aplicación
Subscribe to our newsletter!
We run a regular newsletter with information around the state of education in India.  
Will you be keen to join?
Great! You are added to our newsletter!
Oops! Something went wrong while submitting the form.
Join Group for JEE & NEET Updates