Education Loan for B.Tech Students in India
Education loans for engineering are a crucial financial aid for students pursuing a B.Tech, B.E or any engineering degree in India. These loans cover various expenses, including tuition fees, accommodation, and books, making higher education accessible to a broader range of students. The engineering education landscape in India is evolving, with increasing demand for quality education and rising costs.
This article will provide an overview of the eligibility criteria, interest rates, and steps to obtain an education loan for engineering.
Key Takeaways
- Interest Rates: Engineering education loan interest rates in India range from 9% to 15% for banks and 10% to 15% for NBFCs. Banks often provide lower rates for loans under ₹4 lakh, with concessions for female students.
- Accessibility: Students in major Indian cities benefit from location-specific schemes and government subsidies that improve loan availability.
- Loan Types: B.Tech students can avail loans with or without collateral. Secured loans offer higher amounts at lower rates, while unsecured loans are easier to obtain but may carry higher interest rates.
Education Loan for Engineering Students Features
Below is an overview of key features of education loan for engineering. You can consider these when applying for an education loan for a B.Tech program:
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Parameter
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Details
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Average Loan Limit
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- Up to ₹10 lakhs (India)
- ₹20–30 lakhs (for studies abroad)
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Expenses Covered
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- Tuition fee - Examination, library, and laboratory fees
- Books, equipment, uniforms
- Hostel fee
- Travel expenses (if applicable)
- Insurance and other academic-related expenses
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Minimum Interest Rate
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- Secured Loan: 7.5% – 10.5%
- Unsecured Loan: 10.5% – 14%
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Moratorium Period
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Course duration + 6 months to 1 year (grace period after course completion)
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Repayment Duration
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Up to 15 years
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Engineering Courses Covered
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- B.E. / B.Tech (all streams)
- Integrated dual-degree engineering programs
- M.E. / M.Tech (Postgraduate studies)
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Requirements
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Admission must be secured in a recognised college/university through a merit-based or entrance exam process (e.g., JEE, state CETs)
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Concession
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Female students often receive an interest rate concession of 0.5% from many banks (e.g., SBI, Punjab National Bank)
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Security
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- Secured Loan: Requires collateral such as property, fixed deposits, or insurance policies for loans above ₹7.5 lakhs in most cases
- Unsecured Loan: No collateral needed, but interest rates are higher
- Some NBFCs like Propelld, HDFC Credila, and InCred offer unsecured loans without traditional collateral
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Other Benefits
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Income tax benefit under Section 80E for interest paid on education loans
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Processing Time
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Typically 7–15 working days, subject to documentation and eligibility
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Dream College? We’ll Fund It
Education Loan for Engineering Interest Rates
Interest Rates are generally lower for loans below Rs. 4 Lakh and vary with banks.
Many banks in India offer additional interest rate concessions for female students pursuing engineering qualifications.
While banks provide interest rates ranging from 9% to 15%, NBFCs offer from 10% up to 15%, but with much flexible terms and easier processes.
The interest rates also depend on multiple factors like the candidate profile, potential, the college rating etc.
Lets see the interest rates and other details of education loans provided by banks and NBFCs:
Education Loans for B.Tech Interest Rates of Banks
Lets see the interest rates and other details of banks offering education loan for Btech:
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Bank
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Loan Amount
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Interest Rate
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Repayment Period
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Processing Fees
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PNB
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Up to Rs. 10 Lakhs
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4.00% p.a. to 11.85% p.a.
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Flexible
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For Indian Students- Nil
- For studies in Abroad- 1% Minimum Rs.10,000
- For PNB Pravasi Shiksha Loan: 1% of the loan amount, Minimum Rs.10,000
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SBI
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Up to Rs. 20 Lakhs
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7.80% p.a. to 10.35% p.a.
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Flexible
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Loans up to Rs.7.5 lakh- Nil
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Axis Bank
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Up to Rs. 40 Lakhs
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3.50% p.a. to 14.35% p.a.
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Flexible
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2.00% of the Loan GST
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Bank of Baroda
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Up to Rs. 80 Lakhs
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7.10% p.a. to 13.50% p.a.
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Flexible
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- Baroda Vidhya – Nil
- Baroda Gyan – Nil
- Baroda Scholar – 1% of loan amount up to Rs.10,000
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HDFC
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Up to Rs. 20 Lakhs
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10.5 % p.a onwards
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Flexible
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- Up to loan amount Rs.7.5 lakh- Nil
- Above Rs. 7.5 lakh- 1%
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Kotak Mahindra Bank
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Up to Rs. 1 Crore
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Maximum 16%
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Flexible
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Nil
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Education Loans for B.Tech Interest Rates of NBFCs
Apart from traditional banks, Non-Banking Financial Companies (NBFCs) also play a significant role in providing education loans for B.Tech students.
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NBFC
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Max Loan Amount
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Interest Rate
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Repayment Period
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Avanse
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1.25 crores
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10%–16.5%
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Upto 10- 15 years
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Auxillo
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40 lakhs
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12.7%–14.5%
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Upto 10 years
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HDFC Credila
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50 lakhs
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Starting from 10.25%
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Up to 15 years
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Propelld
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40 Lakhs
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12%- 15 %
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Upto 10 years
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At Propelld, rates typically range from 12–15%, depending on your academic merit, institute category, and repayment capacity.
For top-tier foreign universities, Propelld sanctions up to ₹80L with no collateral.
Engineering Education Loan EMI Calculator
Planning your finances for an engineering course? Use an EMI calculator to estimate your monthly loan repayment. It helps you understand how much you'll need to pay based on your loan amount, interest rate, and tenure.
You can easily estimate your monthly installments using the Education Loan EMI Calculator, which helps you plan repayments based on interest rate and loan tenure.
Eligibility Criteria for Engineering Education Loan
Before applying, it’s important to know whether you qualify for an education loan for engineering (B.Tech/B.E.) in India. Lenders typically check the following:
Residency
The applicant must be an Indian resident with valid proof of address (Aadhaar, passport, voter ID, etc.).
Age Limit
Most banks and NBFCs require applicants to be between 16 and 35 years old.
Admission Proof
A confirmed admission letter from a recognized engineering college or university (in India or abroad) is mandatory.
Academic Records
Previous mark sheets and certificates (10th, 12th, and entrance test results, if applicable) are required.
Co-Applicant
Usually, a parent or guardian acts as co-applicant, sharing responsibility for repayment. Some lenders may also accept close relatives.
Documentation
You will need to submit KYC documents, admission proof, income details of the co-applicant, and other lender-specific forms.
Read our detailed guide on Education Loan Documents to make your application process smoother.
Documents Required for B.Tech Education Loan
Most lenders require the following documents for an Education loan for Btech:
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Document Type
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Details
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Education Certificate
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12th mark sheet or latest educational certificate
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Admission Proof
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Official admission letter from a recognised college with a cost of education
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KYC Documents
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Age, Identity, and Residence Proofs like Passport, Driving License, Voter ID Card, Job Card, Aadhaar card
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Residence Proof
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Passport, Driving License, Voter ID Card, Job Card, Aadhaar card
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Income Proof
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Recent salary slips and Form 16 of the co-applicant. In case of non-salaried, ITR with income computation for 2 years.
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Requirement of documents varies across lenders. Traditionally banks asked for a large number of documents, which, thankfully, the new age NBFCs have minimised.
Minimal Docs, Maximum Approval - Apply Now
How to Get an Education Loan for Btech?
Check Eligibility
Ensure you’ve secured admission to a recognized engineering college and meet the lender’s academic and financial requirements.
Choose the Right Lender
Compare education loan options from banks and NBFCs based on interest rates, repayment terms, and eligibility flexibility.
Explore Government Schemes
Look into options like the Prime Minister’s Scholarship Scheme and other subsidy schemes available for engineering students.
Prepare Your Documents
Keep key documents ready—admission letter, fee structure, academic records, ID proof, income proof, etc.
Apply Online or Offline
Submit your application through the bank’s website, NBFC portal, or centralized platforms like Vidya Lakshmi.
Get Co-Applicant Details in Place
Most lenders require a parent/guardian as co-applicant. NBFCs may offer more flexibility here, especially if there’s no collateral.
Wait for Sanction & Disbursement
Once approved, the loan amount is disbursed directly to the college/university as per the fee schedule.
How to Apply for an Education Loan for B.Tech?
Below is a step-by-step guide on how to apply for an education loan for B.Tech
Application Process Tabs
Online Process
Offline Process
Online Process
- Go to the official website of the bank or NBFC where you want to apply for the loan. Look for the section dedicated to education loans.
- Select the option to apply for a loan online. This is usually labeled as “Apply Now” or “Education Loan Application.”
- Enter the student’s and co-applicant’s details, course information, institute name, loan amount required and other data.
- Input all necessary financial and academic details such as marksheets, admission offer, co-applicant’s income, etc.
- Upload all required documents and attach scanned copies of documents.
Offline Process
- Visit the nearest branch of your chosen bank or NBFC.
- Request the education loan application form.
- Fill in all required details manually.
- Attach photocopies of all supporting documents.
- Submit the form and documents to the loan officer.
- Cooperate during verification or additional queries.
- Receive a sanction letter upon approval and proceed with disbursement.
After submission, the lender will review your application. If required, they may contact you for verification or additional documents.
What is the Process of Education Loan Disbursement?
Once your education loan is approved, the lender releases (disburses) the loan amount, usually in installments. The funds are most often sent directly to the college or university to cover tuition and other official fees, ensuring transparency. In some cases, a portion may also be transferred to the student’s account for living or travel expenses.
Here’s how the disbursement process works:
How to Apply
Step 1 – Submit Required Documents
Admission letter, detailed fee structure, collateral papers (if applicable), and KYC documents.
Step 2 – Verification by Lender
The bank or NBFC verifies documents and confirms admission details with the institution.
Step 3 – Disbursement of Funds
Payment is released directly to the institution as per fee schedule, or partly to the student’s account (for living/travel costs).
Step 4 – Tracking & Timelines
Each installment follows the institution’s payment cycle. Staying updated on timelines helps avoid delays.
Why It Matters: Understanding the disbursement process helps students and parents plan finances better, avoid last-minute surprises, and ensure smooth continuation of studies.
With Propelld, you can get loan sanctioned and disbursed in as little as 72 hours—10x faster than banks.
How to Foreclose/Prepay Your Education Loan?
Foreclosing or prepaying your education loan means clearing the outstanding balance before the scheduled tenure ends. This can save you significant money on interest.
Steps to Foreclose/Prepay Your Education Loan:
Contact Your Lender
Inform the bank/NBFC about your decision to foreclose or prepay.
Request a Foreclosure Statement
Get a detailed statement with the outstanding principal, interest, and any charges.
Verify Prepayment Charges
Some lenders may levy a small penalty, while many waive it for education loans.
Make the Payment
Pay the amount via net banking, cheque, or direct transfer.
Collect NOC (No Objection Certificate)
Once closed, obtain the NOC and loan closure letter for your records.
Update Credit Records
Ensure your CIBIL/credit score reflects the loan closure correctly.
Pro Tip: Compare long-term savings before foreclosure, as early repayment reduces interest burden but may impact liquidity.
Propelld allows easy prepayment/foreclosure without hidden penalties, letting you save on interest if you repay early
Expenses Covered Under Education Loan for Engineering Students
An education loan for B.Tech is designed to cover not just tuition but the overall cost of pursuing engineering. Knowing what’s included helps you plan better and avoid financial gaps.
Tuition Fees
Complete or partial coverage of academic fees charged by your engineering college/university.
Living Expenses
Hostel/PG rent, mess charges, and day-to-day living costs.
Books & Study Materials
Textbooks, reference guides, journals, and stationery.
Travel Costs
Train/air tickets for commuting to and from the institution.
Study Aids & Equipment
Laptops, lab tools, or any essential learning devices.
Other Academic Fees
Exam fees, lab charges, library fees, and project work expenses.
Check with your bank or NBFC about any limits or exclusions as coverage can vary across lenders.
Propelld funds up to 100% of tuition + living expenses for select universities, with flexible add-ons for laptops, travel, and insurance.
By knowing what expenses are included in the loan coverage, you can better manage your finances and ensure that you have the necessary support to pursue your B.Tech education without financial constraints.
Why to Get Student Loan for B.Tech?
Education loans for engineering serve a vital purpose in providing financial assistance to students who cannot afford the high costs of engineering education in India. These loans enable students to pursue their dreams of becoming engineers and contributing to the country's technological development. According to Reserve Bank of India (RBI) data, the spurt in education loans was the highest in the last five years. The growth registered in the comparable period was 12.3 percent in FY23 and (-) 3.1 percent in FY22.
For a deeper insight into why this shift is happening, explore why education loans matter more than ever in India’s growing economy.
Here are some of the key benefits of taking an education loan for B.Tech:
1. Covers Full Education Cost – Tuition fees, hostel charges, books, travel, and other academic expenses.
2. Moratorium Period – Repayment starts after course completion plus 6 months to 1 year. So you can repay the loan once you have the job.
3. Low Interest Rates – Especially from government and public sector banks.
4. Flexible Repayment Tenure – Typically ranges from 5 to 15 years.
5. Improves Credit Score – Timely repayment helps build a strong financial profile.
Propelld offers moratorium covering the course + up to 1 year, so repayment starts only after you’re job-ready
Education Loan for Engineering Students in India
Lets see the details on education loan for engineering students in some of the major cities of India:
Education Loan for Engineering Students in Bangalore
Many national and commercial banks in Bangalore offer education loans to students pursuing engineering programs, covering tuition, dormitory, and other related expenses. Banks like Bank of Baroda, HDFC Bank, Bank of India, and Federal Bank are popular choices for education loans in Bangalore.
Education Loan for Engineering Students in Mumbai
Students who have admission in undergraduate (B.E./B.Tech) or postgraduate (M.E.) engineering courses in recognized colleges in Mumbai can easily get an education loan. The loan tenure typically ranges from 5 to 7 years, with EMI payments starting after the moratorium period or once the student gets a job.
Education Loan for Engineering Students in Pune
Engineering students in Pune can easily secure education loans from banks like SBI, HDFC, and ICICI for courses like B.Tech and M.Tech. Loans of up to ₹10 lakh are offered, with interest rates ranging from 7% to 12%. Repayment terms usually span 5 to 7 years, starting after the moratorium period.
Education Loan for Engineering Students in Telangana
In Telangana, engineering students can get education loans through various banks and government schemes. The Vidya Lakshmi Portal simplifies applications to multiple banks. Telangana Grameena Bank and Telangana State Co-operative Apex Bank offer loans up to ₹10 lakh (8.40% interest rate) and up to ₹20 lakh for abroad studies (12% interest rate). Government schemes like the Chief Minister’s Overseas Scholarship and Dr. Ambedkar Central Sector Scheme provide interest subsidies for SC, ST, and OBC students.
Education Loan for Engineering Students in Tamil Nadu
Tamil Nadu has some of India’s best engineering colleges like CEG and IIT Madras. Students who get into these colleges can easily apply for education loans. Many colleges also work with banks to help students get loans faster.
Education Loan for Engineering Students in Delhi
Students who have admission in a recognized engineering college in Delhi can apply for an education loan of up to ₹4 lakh under the Delhi Government scheme. The amount depends on the student’s course and repayment ability. These loans cover fees, hostel, books, and project costs.
Education Loan for Engineering Students in Karnataka
Karnataka Bank Education Loan is a prominent option offering loans with competitive interest rates and flexible repayment terms. For engineering students, loans up to Rs.7.5 lakh attract an interest rate of about 10.73%, while loans above Rs.7.5 lakh have a higher rate of 12.23%. These loans cover tuition fees, hostel charges, books, and other academic expenses.
Vidya Lakshmi Portal for Education Loan for Btech
The Vidya Lakshmi portal was launched by the Ministry of Education, Department of Financial Services, and Indian Banks Association.
It helps students connect with multiple banks to apply for education loans easily.
Students can apply to several banks, track their applications, and get loan details all in one place.
Students who are pursuing BA, B.COM and BSC, as well as those with postgraduate qualifications like Masters and PhDs, along with professionals in fields such as Engineering, Medicine, and Agriculture, can apply for education loans through the Vidya Lakshmi portal.
Types of Education Loans for B.Tech Students in India
Here are key details on types of education loans for B.Tech students.
Loan Types Tabs
Secured Education Loan
Unsecured Education Loan
Secured Education Loan
A secured education loan requires collateral like property or FDs, usually for amounts above ₹7.5 lakhs. The Interest rates range from 7.5% to 10.5% and if the borrower defaults their collateral can be seized.
Unsecured Education Loan
In an unsecured education loan, no collateral is needed, it is based on creditworthiness and future income. The loan amount is offered up to ₹7.5 lakhs, with higher interest rates ranging from 10.5% to 14%.
Secured (vs) Unsecured Education Loan for Btech Students
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Feature
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Secured Education Loan
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Unsecured Education Loan
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Interest Rate
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Potentially Lower (7.5% - 10.5%)
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Typically Higher (10.5% - 14%)
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Collateral Requirement
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Yes (House, Flat, Land)
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No Collateral Required
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Eligibility
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Based on collateral value and creditworthiness
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Based on academic record and co-applicant's financials
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Loan Amount
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Typically higher loan amounts offered
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Lower loan limits compared to secured loans
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Processing Time
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May take longer due to collateral valuation
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Generally faster processing time
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Secured (vs) Unsecured Education Loan options help students understand the difference between loans with and without collateral. For those looking to study abroad without pledging any security, there are several banks that give education loans without collateral for abroad, making higher education more accessible and stress-free.
Co-Applicants and Strong Financial Profile: Why It Matters for Education Loans?
Co-applicants, usually parents or guardians, play a crucial role in your education loan journey. Their stable income and strong credit history not only show financial reliability but also improve the chances of loan approval at lower interest rates. In many cases, lenders may even ask co-applicants to provide collateral or a guarantee to strengthen the application.
But what happens when the co-applicant’s financial profile is weak?
A student on Reddit shared: “I cleared JEE Mains with 94 percentile but my father’s credit score isn’t strong. With two siblings already in college and a middle-class background, I’m worried about whether any bank will approve my loan. Do I have to drop a year?”
This is a common concern for many students. While traditional banks heavily depend on the co-applicant’s financials, NBFCs take a more flexible approach. Many NBFCs look beyond just the co-applicant’s credit score. They consider:
Your academic performance (e.g., a solid JEE percentile)
Future earning potential after completing your degree
Overall repayment capacity rather than just current income stability
This means students from middle-class families, even with a co-applicant having a weak credit history, still have a fair chance of securing a loan without losing precious academic years.
If your bank application gets rejected due to a co-applicant’s profile, consider NBFCs that specialize in education loans—they may be more aligned with your academic merit and future career path.
Did you Know? With Propelld, Relatives can be your Education Loan Co-Applicant too!
Pursue Your B.Tech Dreams with Propelld's Streamlined Education Loans
Equip yourself with the knowledge and skills to become a future engineering leader. A B.Tech degree opens doors to exciting career opportunities, and Propelld is here to bridge the financial gap and make your engineering aspirations a reality.
Education loans for B.Tech students in India are key to funding higher studies. With secured and unsecured options available, it's important to compare lenders, understand terms, and plan repayment wisely.
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