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.
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.
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:
In Kerala, several banks offer education loans to students pursuing higher studies in India or abroad. You may want to consider exploring the offerings of these banks to find the best fit for your education loan needs.
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.
Kerala Gramin Bank Education Loan Scheme
Kerala Gramin Bank offers an Education Loan Scheme aimed at providing financial assistance to students who aspire to pursue higher education after completing their bachelor's degree. This scheme is designed to support Indian Nationals in their educational endeavors, whether in India or abroad. Below are the details for this scheme:
Loan Limit: The loan amount ranges from Rs. 10 to 20 Lakhs.
Interest Rate: The interest rates range from 10.50% to 13.60%.
Loan Margin: A margin of 5% to 10% is applicable, depending on the country of study.
Kerala Government Education Loan Subsidy under the Kerala Gramin Bank Education Loan Scheme helps eligible students reduce their repayment burden through interest subsidies and financial support.
Eligibility Criteria
To avail of this education loan scheme, certain eligibility criteria must be met:
- A parent or guardian must act as the representative for minor students.
- The loan amount will be in both the student's and the parent/guardian's names.
- The student must have gained admission to reputable institutions in India or overseas for higher education through a selection process based on merit.
Best Banks for Education Loans in Kerala
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.
Public vs Private Banks in Kerala
Public Sector Banks (SBI, Canara Bank, Federal Bank, etc.)
- Offer lower interest rates and government subsidy benefits.
- Suitable for students seeking affordable loans with longer repayment tenures.
Private Banks & NBFCs
- Known for faster processing and flexible options.
- Typically charge higher interest rates compared to PSBs.
Key Takeaway
For students in Kerala, public sector banks remain the most affordable choice for education loans, especially for courses within India. However, those prioritizing speed and convenience may find private banks or NBFCs more suitable despite the higher cost.
ile private banks and NBFCs are often preferred for faster processing, albeit at higher rates.
Propelld: Your Ultimate Solution for Education Loan
Propelld is an NBFC that specializes in financing education in India. The organization's loan process is 10X faster than banks, with no collateral loans, moratorium available, and a complete online process with no physical verification. Here are some key pointers about Propelld's education loan scheme:
- Propelld, an NBFC, has a vast customer base of over 2 lakh individuals, including both parents and students, and has disbursed over 2000 Crores in education loans.
- Propelld collaborates with prominent institutions such as Upgrad, Allen, BITS Pilani, and others, covering skill-up, coaching, and college financing segments.
- In the college segment, Propelld offers a tranche facility for disbursements, higher approval rates, and an effortless application process.
- For skill-up courses, loans are disbursed within hours, accompanied by no-cost EMI options at partner institutions.
- In the coaching segment, Propelld provides no-cost EMI, reframing loans as installments for better understanding.
- Propelld focuses on domestic education loans, covering a wide range of courses from kindergarten to post-graduation and beyond.
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.
Documents Required for Education Loans in Kerala
To apply for an education loan in Kerala, you'll need to provide certain documents. Here's a summary of the basic documents required for both unsecured and secured education loans:
Basic Documents Required:
- Online Application Form
- Identity Proof (Aadhaar Card, Voter ID, Passport, Driving License, etc.)
- Address Proof (Aadhaar Card, Voter ID, Passport, Driving License, etc.)
- Confirmation of Enrollment (Official Admission Letter)
- Educational Records (10th, 12th, and Graduation Certificates)
- Proof of Income for the Last Three Months (Pay Slips or Company Letter)
- Form 16 for the Past Two Years
- Income Tax Return (ITR) filed for the Previous 2 Years
- Financial Documents (Balance Sheet and Profit/Loss Account for Self-employed Co-applicants)
- Official statement addressing any breaks in academic or employment history, duly stamped on a Rs. 100 stamp paper.
Additional Documents for Secured Loans:
- Co-applicant's Basic Income Certificate (if no income tax returns available)
- Proof of Collateral Pledged (Property Title Deed, Sale Agreement, Gift Deed, Will, etc.)
- Munnadaram and Conversion Certificate (if applicable)
- Acceptance from Neighboring Property Owners (if property has private road access)
- 30 Years of Ownership Transfer Documents or Earlier Chain of Sale Deeds
- Latest Property Tax and Electricity Bills
- Municipality-Approved Building Plan or Plot Layout Copy
Ensure you have all these documents ready to expedite your education loan application process.
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.
Why Choose Propelld For An Education Loan In Kerala?
If you're a student in Kerala looking to fund your education, you're likely facing some significant challenges. With so much of the state comprising wetlands and non-serviceable areas, securing an education loan can be a daunting task. Fortunately, there's a solution that can help you overcome these obstacles - Propelld.
As a trusted partner of the Government of India under the Digital India Campaign, Propelld has established partnerships with a wide range of public and private banks, making it easier than ever to secure an education loan in Kerala. By working with us, you'll enjoy a range of benefits designed to make the process simple, efficient, and stress-free.
Our expert Financial Officers will guide you through every step of the process, providing you with the support you need to succeed. From negotiating lower interest rates to managing complex cases involving multiple parties, we have the expertise and experience to help you get the loan you need to finance your education.
Moreover, our commitment to transparency means that you'll always know what's happening with your application and what to expect next. And with no service fees to worry about, you can focus on your studies and your future, knowing that Propelld has your back.
Choose Propelld for your education loan in Kerala, and let us help you achieve your dreams. We're committed to providing you with the support, guidance, and expertise you need to succeed, no matter what challenges you may face.
*Note: The information provided in this article is based on data available as of 2024. Interest rates, eligibility criteria, and other details may be subject to change. Readers are advised to verify the latest information from respective banks or financial institutions before applying for an education loan in Kerala.
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