Education Loan Kerala 2025: Interest Rates & Fastest Approvals

Kerala, India’s most literate state, offers some of the best education loan options for students dreaming of higher studies in India or abroad. Whether you’re planning MBBS, engineering, or postgraduate education, leading banks and NBFCs in Kerala provide low-interest, collateral-free loans with quick approvals and flexible repayment.

This guide compares top lenders, latest interest rates, eligibility, and subsidy schemes to help you choose the right education loan in Kerala and fund your academic journey confidently in 2025.

By the end of this blog, you will know

Top lenders for education loans in Kerala and their strengths
Interest rates, secured vs unsecured loan limits, and approval speeds
Best lenders for studying abroad vs India
Subsidy schemes available for Kerala students (CSIS & Dr. Ambedkar)
Documents required and where to apply (banks & Vidya Lakshmi portal)

Understanding Education Loans in Kerala

Education loans in Kerala help students cover tuition, books, accommodation, and other study-related expenses. Repayments usually begin after course completion, allowing students to focus on learning. Kerala offers several loan schemes through public and private lenders. Among them, Tata Capital provides a strong option with collateral-free loans and flexible repayment, ideal for students seeking affordable financial support.

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Best Education Loan Providers in Kerala

Public Banks:

State Bank of India (SBI), Kerala Gramin Bank, Federal Bank, Canara Bank, and Punjab National Bank offer lower interest rates (7.3–13.6%), government subsidies, and long repayment tenures—making them ideal for affordable loans.

Private Banks & NBFCs:

Propelld, ICICI, Axis Bank, and HDFC Credila provide quick processing and flexible eligibility, but usually with a slightly higher rate.

Kerala Gramin Bank:

Up to ₹20 lakh with 10.5–13.6% interest and government subsidy for eligible candidates. Special support for those from OBC/EBC categories and minority communities available via central schemes.

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Which Bank is Best for Education Loan in Kerala For Studies in India

Kerala offers education loans from both public banks and private NBFCs. Public banks like SBI, Kerala Gramin Bank, and Federal Bank offer lower interest rates and longer tenures, while private lenders such as ICICI and Propelld provide faster processing with more flexible eligibility requirements. Following are the best banks for education loan in kerala

Bank Name	Scheme Name	Loan Amount & Collateral	Processing Fee	Interest Rate (p.a.)
SBI	SBI Scholar Loan Scheme	Up to ₹1.5 Crores with collateral	₹10,000 + GST	Starts from 8.35%
IDFC Bank	IDFC Bank Education Loan Scheme	Up to ₹50 Lakhs unsecured	1-2% of loan amount	Starts from 8.5%
Incred	Incred Education Loan Scheme	Up to ₹60 Lakhs (India), ₹75 Lakhs (Abroad)	1-2% of loan amount	Starts from 11%
Avanse	Avanse Education Loan Scheme	Up to ₹60 Lakhs (India), ₹75 Lakhs (Abroad)	1-2% of loan amount	Starts from 11%
Karur Vysya Bank	Education Loan Scheme	Up to ₹1.5 Crores with collateral	₹10,000 + GST	Starts from 10%
Union Bank	Union Bank India Education Loan Scheme	Up to ₹2 Crores with collateral	1-2% of loan amount	Starts from 11.15%
BOB	Baroda Scholar Scheme	Depends on the university	₹10,000 + GST	Starts from 10.60%
ICICI Bank	ICICI Bank Education Loan Scheme	Up to ₹50 Lakhs unsecured	1-2% of loan amount	Starts from 10.5%

If you're comparing loan providers, the IDFC Bank education loan for students in Kerala is worth exploring due to its fast processing and competitive interest rates for higher education.

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Leading Banks for Education Loan in Kerala for Abroad Studies

Bank Name	Loan Amount	Processing Fee
State Bank of India	Up to INR 1.5 cr with collateral	INR 10,000
Axis Bank	Prime A - INR 1 cr Prime B - INR 40 lakh	0.75% on the sanctioned loan amount
ICICI Bank	Up to INR 2 cr (secured) Up to INR 1 cr (unsecured)	Up to 0.75% TO 1% + GST
IDFC First Bank	Up to INR 75 lakh without collateral	Up to 1.5% of the sanctioned loan amount
Union Bank of India	Up to INR 2 cr (secured) Up to INR 40 lakh (unsecured)	INR 5000
HDFC Credila	Up to INR 75 lakh	0.5% - 1%
Avanse	Up to INR 75 lakh	1% - 1.5%
Auxilo	Up to INR 65 lakh	0.5% - 1.5%
InCred	Up to INR 80 lakh	1% - 2%
MPower Financing	Up to 100,000 USD	5% (adjusted in the loan amount)
Prodigy Finance	Up to 100% cost to study	Up to 5%, added to loan amount*

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Which is the Best Bank for Education Loan in Kerala?

The State Bank of India (SBI) is often considered the best bank for education loans in Kerala, offering low interest rates, flexible repayment options, and government-backed subsidies. Kerala Gramin Bank, Federal Bank, and Canara Bank also provide affordable choices, while ICICI and HDFC offer faster processing and broader eligibility, making them ideal for students prioritizing speed and convenience.

How to Get an Education Loan in Kerala ?

Getting an education loan in Kerala is straightforward if you meet key requirements. Students aged 18–35 must have confirmed admission to a recognised institution, with a parent or guardian as co-applicant if underage. Compare public lenders like SBI and Kerala Gramin Bank with private options such as Propelld and ICICI. Submit ID, admission, academic, and income proofs online or at a branch. After approval, the loan is disbursed directly to the institute, often with moratorium and subsidy benefits.

If you’re planning to study medicine, our Kerala NEET Rank Predictor 2025 can help you estimate your chances of admission before applying for an education loan for MBBS in Kerala.

Eligibility Criteria For Education Loan in Kerala

Admission to recognized institutions in India or abroad, usually via merit-based selection.
Indian citizenship; minors require a parent/guardian as co-applicant.
Clear documentation: ID proof, Aadhaar, admission letter, mark sheets, income proof, and (for secured loans) property papers.
Most banks offer collateral-free loans up to ₹4 lakh.

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Documents Required for Study Loan in Kerala

To apply for an education loan in Kerala, keep these essential documents ready for faster approval:

Online application form filled accurately with course and co-applicant details.
Identity and address proof such as Aadhaar, Passport, Voter ID, or Driving License.
Admission confirmation letter from the recognised institution.
Educational records — 10th, 12th, and graduation certificates.
Income proof — latest three months’ payslips or employer letter, Form 16, and ITR for the past two years.
Financial documents like balance sheet and profit/loss statement for self-employed co-applicants.
Statement for study or work gaps, notarised on a ₹100 stamp paper.

Additional for secured loans:

Co-applicant’s income certificate (if no ITR available).
Property documents — title deed, sale or gift deed, chain of ownership (30 years), and tax or electricity bills.
Approval certificates — conversion or layout plans, and neighbor consent if property access is private.

Having these ready ensures a smooth, timely education loan process in Kerala.

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Education Loan - Min Docs. Max Approval. Min Hassle. Max Tenure

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Education Loan in Kerala: Which Bank Should You Choose?

Quoting a question from Quora, “Which bank is best for an education loan in Kerala?”, former Senior Manager at a nationalized bank, M Chandramouli (1982–2020), shared a practical perspective.

He explained that:

Loans up to ₹4 lakh usually don’t require collateral or surety.

Not all courses are eligible, so applicants must confirm with the bank before applying.

Students can apply through individual bank portals or the Government of India’s Vidya Lakshmi portal, which helps in selecting a preferred bank and branch within their locality.

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Public vs Private Banks for Education Loans in Kerala

Aspect	Public Sector Banks (SBI, Canara Bank, Federal Bank)	Private Banks & NBFCs (Propelld, ICICI, Axis Bank)
Interest Rates	Lower (approx. 7%–13%) with subsidy benefits	Slightly higher (9%–14%) depending on profile
Repayment Tenure	Longer, flexible repayment periods	Moderate, shorter tenures with EMI flexibility
Processing Speed	Slower due to manual verification	Fast, often 100% digital with quick approvals
Documentation	Extensive paperwork and verification	Minimal, simplified and paperless process
Collateral Requirement	Usually required for higher loan amounts	Mostly collateral-free, especially with NBFCs
Eligibility Criteria	Strict, based on institute and course type	Broader, includes more institutes and profiles
Subsidy Schemes	Eligible for CSIS and other government programs	Generally not covered under subsidy schemes
Best For	Students seeking affordability and government support	Students preferring speed, ease, and flexibility

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Education Loan Benefits in Kerala from Banks and NBFCs

Covered Expenses: Education loans in Kerala usually cover tuition fees, examination fees, study tours, project work, and other college or university-related expenses. They also include living expenses like housing and meals, ensuring that all aspects of education are financially supported.
Moratorium Period: Banks and NBFCs offer a moratorium period of 6 months to 1 year after course completion, giving students time to secure a job before loan repayment begins. This grace period eases the financial burden on students transitioning into the workforce.
Loan Margin: The loan margin, which is typically around 5%, is the percentage of the total loan amount that the borrower pays from their own funds. This ensures that borrowers have a stake in the loan, while lenders manage risk.
Collateral Margin: The collateral margin, often required by lenders, is the percentage of the total loan amount backed by an asset pledged as collateral. This asset serves as a guarantee for the loan, minimizing risk for the lender in case of non-repayment.

Education Loan Benefits in Kerala from Banks and NBFCs Covered Expenses: Education loans in Kerala usually cover tuition fees, examination fees, study tours, project work, and other college or university-related expenses.

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Education Loan Subsidy Schemes for Students in Kerala

Embarking on a journey of higher education often comes with financial challenges, but the Government of India has introduced several interest subsidy schemes to ease this burden for students from Kerala. These schemes aim to provide financial assistance or interest subsidies to eligible students pursuing education in India or abroad. Here's a glimpse into some of these beneficial schemes:

Central Govt. Interest Subsidy Scheme (CSIS): This scheme offers an interest subsidy during the moratorium period of an education loan, providing significant relief to students.

Padho Pardesh Scheme: While currently inactive since April 1, 2022, this scheme previously provided an interest subsidy to students from minority communities, including Muslims, Christians, Sikhs, Buddhists, Jains, and Zoroastrians, with an family income or yearly gross parental income up to Rs. 6.00 lakhs.

Dr. Ambedkar Scheme for OBC and EBC: Geared towards students from Other Backward Classes (OBCs) and Economically Backward Classes (EBCs), this scheme offers a 100% interest subsidy during the moratorium period, making education more accessible.

If you're unsure what this means, here's the education loan moratorium period explained in detail to help you understand how it impacts your repayment timeline.

These schemes, along with others launched by the Kerala government, serve as a beacon of hope for students seeking financial support to pursue their educational aspirations.

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Securing the right education loan in Kerala is essential for transforming academic ambitions into reality, without financial strain. With a variety of options available, from public banks offering lower interest rates and government subsidies, to NBFCs like Propelld providing quick, collateral-free loans, students can choose solutions tailored to their needs. Understanding eligibility, comparing interest rates, and leveraging subsidy schemes can make loan repayment manageable. Propelld’s streamlined process and expert support help students navigate their education financing confidently in 2025 and beyond.

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FAQs

What is an education loan in Kerala and how can I get one?

An education loan in Kerala is a financial product offered by banks and NBFCs to help students cover tuition, living, and other education-related expenses. To get one, you need to apply through banks like SBI, Kerala Gramin Bank, or NBFCs by submitting admission proof, identity documents, and financial details of a co-applicant, usually a parent or guardian.

How to apply for an education loan in Kerala step-by-step?

First, confirm your admission to an approved institution. Next, gather required documents such as ID proof, admission letter, income proof, and collateral documents if needed. Choose a bank or NBFC, fill out the application online or offline, submit documents, wait for verification and sanction, then receive loan disbursement directly to your college or your account.

Which bank is best for education loan in Kerala with lowest interest rates?

Public sector banks like SBM (State Bank of India) and Kerala Gramin Bank generally offer the best interest rates on education loans in Kerala, often between 8.3% to 10%. They also provide government-backed interest subsidy schemes, long repayment tenures, and collateral-free loans up to certain limits.

What is the best bank for education loan in Kerala for MBBS studies?

For MBBS education loans, banks such as SBI, ICICI Bank, and Axis Bank are popular for offering high loan limits (up to ₹1 crore for Indian courses and higher for abroad studies), competitive interest rates, and flexible repayment options tailored for medical education.

Can I get an education loan for MBBS in Kerala, and what are the eligibility criteria?

Yes, you can get an education loan for MBBS. Eligibility requires successful admission in a recognised medical college, Indian citizenship, usually age between 18-35, and a co-applicant with stable income. Collateral may be required for loans above ₹7.5 lakhs.

What are the documents required for an education loan in Kerala?

Common documents include Aadhaar card, PAN card, admission letter from the college, mark sheets (10th, 12th, graduation if applicable), income proof of co-applicant, identity and address proof, and collateral documents if applicable.

How much education loan can a student get in Kerala?

Loan amounts vary from ₹50,000 up to ₹3 crores depending on the course, institution, and collateral. Collateral-free loans usually go up to ₹7.5 lakhs, while higher amounts require property or fixed deposit security.

How to Apply for an Education Loan in Kerala?

To apply for an education loan in Kerala, start by securing admission to a recognized course. Gather key documents like admission proof, identity proof, academic records, and income proofs of you and your co-applicant. You can apply online on bank websites or portals such as Vidya Lakshmi, or visit the bank branch. After document verification and approval, the loan amount is disbursed directly to your institution or account. Many banks also offer government interest subsidies and moratorium periods to ease repayment.

Are there any government subsidies or schemes for education loans in Kerala?

Yes, the Kerala Government offers education loan repayment subsidy schemes that cover a significant part of the loan repayment in the first few years. Central government interest subsidy schemes are also available for eligible economically weaker sections.

What is the eligibility criteria to get an education loan in Kerala?

You must be an Indian resident with admission to a recognised full-time course in India or abroad. Applicants below 18 require a co-applicant. A stable income co-applicant is usually mandatory, and the institution and course must be bank-approved.

Is collateral required for education loans in Kerala or are collateral-free loans available?

Loans up to ₹7.5 lakhs generally do not require collateral. For higher amounts, banks ask for collateral like property documents or fixed deposits equal to 100-150% of the loan amount.

How to get a study loan in Kerala for Indian and abroad education?

Apply with admission proof, required documents, and a co-applicant. Study loans cover tuition, accommodation, travel, and living expenses for courses in India and overseas. Check bank or NBFC policies for eligibility and processing.

Which banks provide the fastest education loan approval in Kerala?

Private banks and NBFCs like Axis Bank, ICICI, Propelld, and Credila typically offer quicker loan approvals, often within 15-30 days, compared to public sector banks which may take longer due to formalities.

How to check the list of pre-approved universities for education loans in Kerala?

Most banks provide the list on their official websites or customer care. Some portals like Vidya Lakshmi also display approved universities for education loans.

What expenses does an education loan cover in Kerala?

Education loans cover tuition fees, hostel charges, examination fees, library and laboratory fees, books and equipment, travel expenses, and sometimes living expenses.

Can students from Kerala get education loans for study abroad?

Yes, many banks and NBFCs offer loans for overseas education expenses under study loan schemes. Loan amounts and terms may vary and collateral is usually required for higher amounts.

What is the typical interest rate on education loans in Kerala?

Interest rates typically range between 8.3% and 14% depending on the lender, loan amount, collateral, and credit profile of the borrower.

What is the moratorium period offered on education loans in Kerala?

Most banks offer a moratorium during the course duration plus an additional 6 months to 1 year after course completion before the repayment starts.

How to get an education loan in Kerala without income proof?

Some banks and NBFCs offer loans without stringent income proof under specific schemes or with higher interest rates and collateral. Consult lenders individually for options.

Are there special education loan schemes for reserved categories or economically weaker sections in Kerala?

Yes, there are government schemes offering interest subsidies and relaxed terms for students from reserved categories and economically weaker sections.

Can minor students apply for education loans in Kerala, and what is the process?

Minors (under 18) cannot apply independently. A parent or guardian must apply as a co-applicant or co-borrower and take financial responsibility.

How to repay an education loan in Kerala and what are the repayment options?

Loans can be repaid via equated monthly installments (EMIs) after the moratorium. Early repayment options are available without prepayment penalties in most banks.

What are the best NBFC options for education loans in Kerala besides banks?

NBFCs like Propelld, Credila, and Avanse offer education loans with faster processing, flexible collateral policies, and competitive interest rates.

Education Loan in Kerala 2025: Best Banks, Schemes & Options

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