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Education Loan for Distance Learning

Education Loan for Distance Learning: How to Secure Financing for Online Courses

Written By
Vaishali Pandey
&
Reviewed By
Victor Senapaty
Updated On:
Sep 1, 2025
|
10
mins read
Vaishali Pandey
Updated On:
Sep 1, 2025

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Studying from home or on the go has become the new normal. Distance learning isn’t just about convenience anymore; it’s how millions of students are building their careers. But with course fees rising every year, one question keeps coming up: can you actually get an education loan for a distance learning course?

The good news is, yes, you can. And with an ever-increasing number of online learning customers, projected to reach 57 million by 2027, the right funding is essential.

In this guide, you will get to know who’s eligible, what documents you need, and how to apply, so you can focus on your studies without stressing over money.

By the end of this blog, you will know

  • Loan Options: SBI, HDFC, and Axis Bank provide loans for distance learning with interest rates ranging from 7% to 15% depending on lender and loan amount.
  • Eligibility: Confirm that your course qualifies, meet the bank’s criteria, and prepare required documents before applying.
  • Application Process: Apply online or visit the bank branch for a smoother process with complete KYC and academic documents.
  • Benefits & Challenges: Loans support distance learners but may involve interest accumulation or collateral for higher amounts.
  • Repayment Support: Stay in touch with the lender if facing difficulties. Options like loan restructuring or temporary moratorium may be available.

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What is Distance Learning?

Distance learning allows you to earn degrees, diplomas, or certifications without the need to attend classes physically. Whether you're a working professional or someone located far from educational institutions, distance learning provides a flexible way to study. 

These programs can range from professional certifications to full-fledged degree courses in fields like business, engineering, and healthcare. It's a perfect option for those who need education on their own terms.

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Distance Learning Education Loan Eligibility Requirements

To qualify for an education loan for distance learning, you need to meet specific eligibility criteria, which may vary slightly across lenders. The general requirements include:

  • Admission proof of enrollment in an accredited distance learning program.
  • A satisfactory academic record, like marksheets, with usually a minimum of 50-60% in previous studies.
  • You must be an Indian citizen.
  • Income proof, like a bank statement and evidence of your or your co-applicant's financial stability.
  • The applicants must be at least 18 years old.
  • Some lenders require a co-applicant to secure the loan, particularly for higher amounts.

Ensure that your course is recognised by UGC, AICTE, or other relevant bodies, as some lenders offer loans only for approved institutions.

How to Apply for a Distance Learning Loan?

Understanding the loan application process and meeting the criteria is essential. While requirements vary by lender, most banks prefer a CIBIL score of 700 or higher, especially for unsecured loans. Since many students lack a credit history, lenders often evaluate the credit score of the co-applicant, typically a parent or guardian.

Follow these steps to apply for an education loan for distance learning:

  • Begin by comparing loan products, interest rates, and eligibility requirements from various lenders.
  • Ensure you meet the loan criteria and that your course is eligible for funding.
  • Collect all the necessary documents, including your admission letter and academic records such as marksheets or report cards.
  • Submit your application online or at the bank branch, along with the required documents.
  • The lender will process your application, which may include a credit check and verification of your documents.
  • After approval, the loan amount will be disbursed directly to the institution or you, as per the terms.

By following these steps, you'll be well on your way to securing the funding you need for your education, ensuring a smooth financial journey ahead.

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Documents Required for Distance Learning Education Loan

When applying for the loan, you'll need to provide various documents to your lender. These documents are essential for verifying your identity, eligibility, and course details. Here's a breakdown of the typical documents required:

  • Proof of acceptance, such as an admission letter, into a recognised distance learning program.
  • Course details, including the duration and fee structure.
  • Academic transcripts, like mark sheets or certificates from previous education (e.g., 12th grade or undergraduate).
  • Identity proof, such as a passport, driver's license, or Aadhaar card.
  • Proof of residence, like utility bills, bank statements, or rent agreements.
  • Income proof, such as pay slips, income tax returns, or bank statements from you or your co-applicant.
  • Bank statements, typically for the last 3-6 months.

Having these documents ready will simplify your application process and avoid delays.

Explore different Types of Education loans with Eligibility, Interest Rates, & Benefits to understand which option best suits your needs and repayment capacity.

Top Lenders for Distance Learning Loans

When it comes to financing distance learning programs, students can access loans from a mix of federal programs, private lenders, and Indian banks. The ideal lender depends on factors such as your citizenship, credit history, and the type of program.

Here are some popular lenders offering education loans for distance learning:

U.S. Federal and Private Lenders

Lender

Loan Type / Eligibility

Key Features & Benefits

U.S. Federal Student Aid (FAFSA)

Federal grants and loans for accredited online programs

  • Must complete FAFSA; flexible repayment options, including income-driven plans
  • Direct PLUS loans are available for graduate/professional students with automatic deferment while enrolled at least half-time

Ascent Funding

Private loans for online undergrad & graduate programs

  • Offers cosigned and non-cosigned loans (including DACA students); borrow up to the total cost of attendance
  • Max $200,000 for undergrad, $400,000 for graduate 
  • Flexible repayment, low fees, cash-back rewards on graduation
.

Indian Lenders for Domestic & International Distance Learning

Bank / Institution

Loan Programs

Features & Benefits

State Bank of India (SBI)

Education loans for accredited online degree programs

Loan limits and interest rates vary by course; it supports both domestic and international online programs

Bank of Baroda

Digital education loans for approved online institutions

High loan amounts; no collateral required for premier institutes; flexible repayment options

HDFC Bank / Credila

Dedicated loans for online degrees

Competitive interest rates; flexible repayment options; covers domestic and select international programs

Interest Rates on Distance Learning Education Loans

In India, both major banks and NBFCs offer education loans customised for distance learning programs. Public sector banks like the SBI offer education loans starting at 7.50% p.a., with special concessions for female students. 

Private banks such as ICICI and HDFC provide loans with interest rates ranging from 10% to 14% p.a., depending on the course and institution. Here's a comparison of the interest rates from key lenders for distance learning education loans:

Lender

Interest Rate (p.a.)

Max Secured Loan Amount

Max Unsecured Loan Amount

State Bank of India (SBI)

7.50% to 10.15%

₹ 3,00,00,000

₹ 50,00,000

Bank of Baroda

Starting from 7.10%

₹ 2,00,00,000

N/A

ICICI Bank

10.25% to 14.00%

₹ 50,00,000

₹ 1,00,00,000

Axis Bank

3.50% to 13.00%

₹ 2,00,00,000

₹ 1,00,00,000

Punjab National Bank (PNB)

4.00% to 11.85%

₹ 50,00,000

₹ 2,00,00,000

IDFC FIRST Bank

Starting from 9.50%

₹ 50,00,000

₹ 1,00,00,000

Avanse (NBFC)

Starting from 10%

₹ 1,00,00,000

₹ 1,25,00,000

This comparison provides a clear understanding of the available options, allowing you to select the lender that best suits your financial needs and study goals.

Benefits and Challenges of Education Loans for Distance Learning

Education loans for distance learning offer flexible funding options for remote education, but they come with unique challenges, particularly in terms of eligibility and repayment. The loan application process can be more complex than that for traditional campus-based programs.

Let's look at some quick merits and demerits of it:

Benefits of Education Loans for Distance Learning:

  • An education loan can save you from draining your savings for tuition and other expenses, leaving you prepared for unexpected costs.
  • Interest on the loan is tax-deductible under Section 80E, providing additional financial relief.
  • Compared to personal loans, education loans have lower interest rates, saving you money in the long term.
  • Most education loans offer a moratorium period, where repayment begins after course completion or a grace period.

Challenges of Education Loans for Distance Learning:

  • While loans provide initial financial relief, repayments can feel heavy, especially if you're still job hunting after graduation.
  • Some lenders charge interest during the course, leading to a larger loan balance by graduation.
  • Higher loan amounts often require collateral, which may not be feasible for everyone.
  • Education loans often cover tuition fees, but expenses like living costs and study materials may need to be managed separately.

Explore Myths and Facts about Education Loans. Get the real insights before making your loan decisions.

Struggling with a Low Credit Score for an Education Loan? Here's What Students Are Asking!

A low credit score can make securing an education loan challenging, but it’s not impossible. Many students worry about their chances of getting a loan, especially when family financial conditions aren’t ideal. Understanding the loan application process and knowing what to focus on can increase your chances of approval.

Reddit User in r/Indian_Academia shared:
“I’ve cleared JEE Mains with a 94th percentile, but my father’s credit score is poor. I want to apply for a B.Tech loan from a private college, but I'm unsure if I’ll get approval. I don’t want to waste another year.”

Insight: While a poor credit score may raise concerns, lenders assess more than just credit scores. Factors like your academic performance, entrance exam results, and the reputation of the college also come into play. 

If you have a co-applicant (like your father) with a lower credit score, it may affect the loan terms, but the loan can still be approved, especially if you can demonstrate a strong career trajectory post-graduation.

What do we infer from the above case?

Academic Performance: Your high score in JEE Mains can strengthen your application, showing that you're a committed and capable student.

Co-Applicant's Role: A weak credit score from a co-applicant may lead to higher interest rates, but it's still possible to get the loan, primarily if you can provide a solid justification for repayment potential.

Alternative Options: Private banks and NBFCs may be more flexible in their assessment, and there are education loan products specifically designed for students from middle-income families.

Tip: Be transparent with your lender about your family's financial situation. Highlight your academic achievements and your future earning potential.

Education loans for distance learning offer flexible funding options but require careful planning. By understanding loan terms, eligibility, and interest rates, you can choose the best lender for your needs. Make sure to assess repayment terms and ensure your loan aligns with your career goals. With the right approach, you can finance your distance education without the financial strain.

Don't let financial roadblocks slow down your global education dreams. With Propelld, you get quick digital approvals, study loans up to INR 50 lakhs, and zero collateral hassles. Plus, enjoy flexible repayment options designed to fit your journey. Propelld makes financing simple, so you can focus on achieving your goals.

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Important FAQs About Education Loan for Distance Learning

Can I apply for an education loan if I am pursuing a distance learning course from a non-traditional university?

Yes, as long as recognised bodies like UGC or AICTE accredit the institution, you can apply for a loan. However, not all lenders may offer loans for non-traditional or newer programs, so checking the course's eligibility with the bank is essential.

How do I prove that a distance learning course is accredited for a loan application?

Lenders usually require the course to be accredited by a recognised body such as UGC, AICTE, or equivalent. You can request the institution to provide proof of accreditation or course approval when applying for the loan.

Do I need to provide collateral for an education loan for distance learning?

For loans up to ₹10 lakh, many lenders may offer unsecured loans, but if the loan amount exceeds this limit, you might need to provide collateral, such as property or fixed deposits, to secure the loan.

How flexible are repayment options for distance learning loans?

Repayment options vary by lender, but most education loans offer a moratorium period where you don't have to start repaying until after your course ends. Some banks also provide income-based repayment schemes that offer flexibility based on your earnings.

Can I get an education loan for distance learning if I already have an existing student loan?

Yes, you can apply for a new loan even if you have an existing student loan. However, the lender will assess your overall debt and repayment ability. It's essential to have a clear repayment plan for both loans to avoid financial strain.

What happens if I don't have a co-applicant for my distance learning education loan?

While having a co-applicant can improve your chances of loan approval, some lenders may allow you to apply for a loan without one, especially if you meet other eligibility criteria, such as a good credit score or sufficient income to support repayment.

Are there any special education loan schemes for working professionals pursuing distance learning?

Some lenders offer loans specifically designed for working professionals, often with flexible repayment options and loan amounts tailored to part-time courses. Check with banks or NBFCs for products intended for professionals balancing work and study.

How does my credit score impact my eligibility for a distance learning loan?

A good credit score (typically above 750) increases your chances of getting approved for an education loan at favourable terms. If your credit score is lower, you might face higher interest rates or require a co-applicant with a stronger financial profile.

Are there any tax benefits for education loans for distance learning?

Yes, the interest paid on your education loan is eligible for tax deduction under Section 80E of the Income Tax Act. This deduction is available for both traditional and distance learning loans, provided the loan is taken for higher education.

What if I want to apply for a loan to study distance learning abroad?

You can apply for an education loan for distance learning programs abroad if the program is accredited. Be sure to provide additional documents such as the university's accreditation, fee structure, and proof of admission to meet lender requirements.

Can I switch lenders if I am not happy with my distance learning loan terms?

Yes, you can switch lenders by refinancing your loan to get better terms. However, be mindful of any fees, penalties, or paperwork involved in the transfer process. It's wise to compare different lenders before committing.

What if I face financial difficulties during the repayment of my distance learning loan?

If you encounter financial difficulties, contact your lender immediately to discuss options like loan restructuring or a temporary moratorium. Providing evidence of your situation can help you secure a more manageable repayment schedule.

Vaishali Pandey
Content Marketer
Check out full profile

A banker turned content marketer with expertise in growth-focused content strategies for the finance and digital sectors.  She currently drives data-backed content initiatives at Propelld, through high-impact storytelling.

Before moving into content marketing, Vaishali spent nearly a decade in banking, across their asset and lending divisions and spent almost a decade in finance. An MBA in Marketing and a writer at heart, she finally took up content marketing and now simplifies money talks for the readers.

She is also a certified digital marketer (MICA), combining data-driven insights with creative storytelling to deliver measurable business growth.

Beyond work, Vaishali is a handcrafted brand founder, avid reader, and travel & food blogger, blending creativity and strategy in everything she does.

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Victor Senapaty
Co Founder, Propelld
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Victor Senapaty is the Co-Founder of Propelld, a pioneering fintech platform revolutionizing education financing in India. An IIT Madras and FMS Delhi alumnus, Victor brings a rare blend of investment banking expertise, startup leadership, and financial innovation to the education lending space.

He is a serial entrepreneur with ventures spanning edtech, hyperlocal commerce, and consumer experiences, and an ex-Deutsche Bank investment banker with deep expertise in financial modeling, valuation, and strategic growth. At Propelld, Victor focuses on unlocking financial access for students by creating future-potential-based lending models, helping thousands pursue higher education without traditional credit barriers.

A National Maths Olympiad gold medalist, FRM Level 1 certified professional, an avid traveler and football enthusiast, Victor is passionate about building products that meaningfully impact lives and transform access to education in India.

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