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Edu Loan for MSc Students

Everything You Need To Know About Education Loans For MSc Students

Vaishali Pandey
Updated On:
May 26, 2025

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Education Loan for M.Sc Students

Pursuing a Master of Science (M.Sc.) degree is a popular choice among students aiming to specialize in fields like Physics, Chemistry, Biology, Mathematics, Computer Science, and more. An M.Sc. typically spans 2 years and offers both theoretical and practical knowledge, preparing students for research roles, academic careers, or advanced positions in industry.

In India, the cost of an M.Sc. program can range from ₹50,000 to ₹3,00,000 depending on the institution and specialization. Additional expenses for hostel fees, books, lab materials, and other living costs may bring the total to around ₹1,00,000 to ₹5,00,000 or more. Education loans can play a crucial role in bridging this financial gap by covering tuition fees, accommodation, exam fees, study materials, and even travel expenses in some cases.

Key Points

Loan Types: Collateral loans offer lower interest and higher amounts but need security; no-collateral loans have faster approval with minimal paperwork but slightly higher interest rates.

Eligibility: Strong academic record, admission to a recognized M.Sc. program, and a co-borrower with stable income and good credit.

Repayment: Flexible options with moratorium periods during study, followed by EMIs; repayment tenure can extend up to 15 years.

Interest Rates: Domestic loans range from 7.55% to 10%, while international loans typically have higher rates between 10.5% and 13.5%.

Whether you're studying at home or abroad, education loans can make your MSc more accessible. Be sure to compare options, understand repayment terms, and plan your finances carefully.

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The Ultimate Guide to Education Loans

Top Lenders Offering Education Loan For MSc Students

Choosing the right bank or financial institution for your education loan for MSc students is essential. Each lender offers different education loans for MSc students with interest rates, loan amounts, and repayment options.

Top Banks Offering Education Loan for M.Sc Students

Here's a comparison of the top banks and NBFCs in India:

Bank/Institution

Maximum Loan Amount

Interest Rate (p.a.)

Processing Fees

Repayment Tenure

State Bank of India (SBI)

₹1.5 crore

8.15% – 11.15%

Nil for loans up to ₹7.5 lakh; 1% for loans above ₹7.5 lakh

Up to 15 years

HDFC Bank

₹1 crore (unsecured)

Starting at 10.50%

Nil for loans up to ₹7.5 lakh; 1% for loans above ₹7.5 lakh

Up to 15 years

ICICI Bank

₹1 crore (domestic); ₹3 crore (international)

Starting at 10.25%

Up to 2% of the loan amount

Up to 15 years

Axis Bank

₹50 lakh

13.70% – 15.20%

Up to 2% of the loan amount + GST

Up to 15 years

Top NBFCs Offering Education Loan for M.Sc Students

NBFC/Bank

Interest Rate (p.a.)

Loan Amount

Repayment Period

Processing Fee

Propelld

10.50% – 12.50%

Up to ₹2 crore (unsecured)

Up to 15 years

Varies by profile

HDFC Credila

10.50% – 14.00%

Up to ₹1.5 crore

Up to 15 years

0.75% – 1% + GST

Tata Capital

11.00% – 13.50%

Up to ₹85 lakh (unsecured); ₹2 crore (secured)

Up to 13 years

Up to 2% + applicable taxes

Cent Vidyarthi (Central Bank of India)

8.30% – 11.50%

Up to ₹10 lakh (India); ₹20 lakh (abroad)

Up to 15 years

Nil

Union Education Scheme (Union Bank of India)

9.30% – 11.30%

Up to ₹46.50 lakh (India); ₹150 lakh (abroad)

Up to 15 years

Nil

PNB Saraswati (Punjab National Bank)

9.60% – 12.35%

According to requirement

Flexible

Nil

Education Loan For MSc Students Interest Rate

The interest rate of education loans for MSc students significantly determines how much you'll repay. Here's a breakdown of education loan for MSc students interest rate based on different types of loans:

Loan Type

Interest Rate (p.a.)

Loan Amount

Repayment Tenure

Collateral Requirement

Secured Loan

8.00% – 11.50%

Up to ₹2 crore

12 – 15 years

Requires collateral (property, FD, etc.)

Unsecured Loan

10.25% – 13.00%

Up to ₹1 crore

7 – 10 years

No collateral required

Foreign Education Loan

9.00% – 12.50%

Varies by country

10 – 15 years

Collateral required for loans above ₹7.5 lakh

Domestic Education Loan

7.50% – 10.00%

₹10 lakh – ₹30 lakh

7 – 10 years

Collateral may be required for higher amounts

Reasons to Get an MSc Education Loan

Here’s why taking out an education loan can be a smart move for MSc students.

High Costs of MSc Programs

Pursuing an MSc often comes with hefty expenses that go beyond just tuition. Think about laboratory fees, research materials, specialized equipment (especially for STEM fields), living expenses, health insurance, and study supplies. These costs can add up quickly, making financial support a necessity for many students.

Accessing an education loan not only helps cover these expenses but can also make attending top-tier institutions a reality.

Access to Top Universities

Education loans can be the key to studying at prestigious universities that might otherwise feel out of reach financially. These institutions often charge higher tuition due to their cutting-edge research facilities, renowned faculty, and extensive resources. Plus, many employers offer tuition reimbursement, which can ease the financial strain in the long run.

Flexible Payment Options

Education loans come with repayment plans designed to ease the financial burden, offering flexibility to suit different financial situations:

  • Moratorium Period: Postpone repayments until after graduation.
  • Interest-Only Payments: Pay just the interest while you’re still in school.
  • Income-Based Plans: Adjust payments based on your income after graduation.
  • Extended Repayment Terms: Spread payments over a longer period to lower monthly costs.

With thoughtful planning and the right loan terms, pursuing your MSc doesn’t have to feel out of reach financially.

Who Can Apply for MSc Education Loans

To qualify for MSc education loans, applicants must meet specific academic and financial criteria. Here's a breakdown of the key requirements.

Grade Requirements

Lenders prioritize academic achievements over credit scores:

  • A strong undergraduate academic record
  • Admission to an accredited MSc program
  • Consistent performance throughout your educational history

Co-borrower Requirements

Having a co-borrower can boost your chances of approval.

Co-borrower Criteria

Details

Income Proof

Recent tax returns and salary slips

Credit Score

Should demonstrate a stable credit history

Relationship

Parents or close relatives are generally acceptable

Documentation

Valid identity and address proof

In addition to academic and co-borrower qualifications, lenders also consider age and citizenship.

Age and Citizenship Rules

Age Requirements:

  • Applicants must be between 18 and 35 years old. If under 18, a legal guardian must apply on their behalf.

Citizenship Criteria:

  • For domestic loans, the applicant must be an Indian citizen.
  • International students may need a U.S. citizen or permanent resident as a cosigner.
  • Valid ID and residency proof are mandatory.

Lenders aim to simplify the application process, keeping documentation minimal but maintaining high standards.

MSc Education Loan Types

When financing your MSc studies, it's essential to understand the different types of loans available. Here's a breakdown of the main loan categories and their key features, building on the eligibility and repayment details discussed earlier.

Collateral and No-Collateral Loans

Once you've grasped the application requirements, it's time to explore how collateral and no-collateral loans can align with your financial situation. Each option caters to specific needs.

Feature

Collateral Loans

No-Collateral Loans

Maximum Amount

Up to 200,000

Up to 67,000

Approval Time

Up to 20 days

Up to 14 days

Interest Rates

Generally lower

Slightly higher

Moratorium Period

Up to 1 year post-course

Interest payments start the next month

Documentation

Extensive paperwork required

Minimal paperwork

For those seeking quicker approval and reduced documentation, no-collateral loans are an attractive choice, though they may require a creditworthy co-applicant. On the other hand, collateral loans typically offer better terms but demand assets like real estate, fixed deposits, government securities, or insurance policies as security.

Indian vs. International Study Loans

Your choice of study destination - domestic or abroad - plays a significant role in determining the loan terms.

Parameter

Domestic MSc Programs

International MSc Programs

Interest Rate

7.55%–10% per year

10.5%–13.5% per year

Processing Fees

0%–1% + GST

0%–1% + GST

Repayment Period

Up to 15 years

Up to 15 years

Tax Benefits

Available under Section 80E

Limited to loans from Indian banks

Visa Requirements

Not applicable

Includes pre-visa disbursement option

International study loans often come with stricter eligibility criteria, such as a GRE score of 300 or higher, a co-applicant with a CIBIL score above 700, and admission to a recognized institution.

Both domestic and international loans cover essential expenses like tuition, accommodation, study materials, and other education-related costs. Selecting the right loan depends on your program's location, your financial resources, and your ability to manage repayments over time.

How to Get an MSc Education Loan

Securing an MSc education loan doesn’t have to be overwhelming. Here's a straightforward guide to help you navigate the process:

Compare Loan Options

When shopping around for loans, focus on these critical factors to make an informed decision:

Comparison Factor

What to Look For

Interest Rate (APR)

Look beyond the basic rate to understand the total cost of borrowing.

Disbursement Timeline

Unsecured loans typically take 2–14 days; secured loans may take 7–42 days.

Repayment Flexibility

Check for moratorium periods and options to prepay without penalties.

Maximum Loan Amount

Ensure the loan covers all your education-related expenses.

Once you've compared your options, gather the necessary documents to speed up the application process.

Required Documents

Having all the required paperwork ready is crucial for a smooth loan approval process. Here's what you'll need:

Academic Documents

  • Undergraduate degree certificate
  • Class X and XII mark sheets
  • Test scores (GRE, GMAT, IELTS, or TOEFL)
  • Admission letter from the university
  • A detailed cost estimate provided by the institution

Financial Documents

  • Bank statements from the last 6 months
  • Co-applicant's income proof
  • A statement of assets and liabilities
  • Tax returns for the past 2–3 years (for the co-applicant)

Identity Verification

  • Government-issued photo ID
  • Proof of residence
  • Recent passport-sized photos
  • Passport copy (especially for international studies)

Approval and Money Transfer

The timeline for loan approval varies. Unsecured loans are typically processed within 2–14 days, while secured loans may take 1–6 weeks. First-time borrowers may need to allow up to 30 additional days for verification.

To avoid delays, submit a complete application with all documents properly self-attested. Stay on top of your loan status by monitoring updates and responding quickly to lender requests. Additionally, confirm details about fund disbursement, including direct transfers to the university and currency conversion for international programs.

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Education Loan for M.Sc Repayment Plans

Before taking an education loan for a Master of Science (M.Sc) degree, it’s important to understand the various repayment plans available. The table below highlights common repayment options, including details about moratorium periods and typical repayment durations.

Repayment Plan

Description

Moratorium Period

Repayment Tenure

Standard Repayment Plan

Fixed monthly EMI payments based on principal and interest.

Course duration + 6 to 12 months

5 to 15 years

Partial Interest Payment

Pay only interest during moratorium, principal repayment starts later.

Course duration + 6 to 12 months

5 to 15 years

Full Interest Payment

Pay full interest during moratorium; principal repayment after that.

Course duration + 6 to 12 months

5 to 15 years

Step-Up Repayment Plan

EMIs start low and increase gradually, aligned with expected income growth.

Course duration + 6 to 12 months

Up to 15 years

Extended Repayment Plan

Longer tenure for lower EMIs but higher total interest paid.

Course duration + 6 to 12 months

Up to 20 years

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Pros and Cons of MSc Education Loans

Following our earlier discussion on loan options and repayment plans, let’s dive into the advantages and challenges of taking out an MSc education loan.

Benefits

MSc education loans come with a range of perks for students aiming to advance their education:

Benefit

Description

Tax Benefits

Interest payments may qualify for a tax deduction under Section 80E.

Credit Building

Regular, on-time payments help establish and improve credit history.

Financial Independence

Encourages responsible financial habits and promotes self-reliance.

Potential Full Coverage

Can cover tuition and related expenses entirely, depending on eligibility.

Flexible Repayment

Offers repayment options, including moratorium periods to reduce repayment stress.

These loans make it possible to pursue quality education without depleting family savings. The added benefit of a moratorium period allows students to focus entirely on their studies before repayment begins.

Challenges

However, MSc education loans come with their share of difficulties:

Higher Interest Rates

Both federal and private loans often come with fixed or variable interest rates, which can be particularly high for unsecured loans. Interest typically starts accruing immediately, leading to a larger total debt. Notably, over 75% of private loans for graduate students require a creditworthy cosigner.

Career Limitations

The pressure of large loan repayments may push graduates toward higher-paying jobs, potentially limiting their ability to pursue career paths that align with their passions or long-term goals.

Limited Relief Options

Private student loans often lack the flexibility of federal loans. For instance:

  • They don’t offer income-driven repayment plans.
  • Financial hardship options are usually restricted.
  • They don’t qualify for programs like teacher loan forgiveness.
  • Discharging them through bankruptcy is nearly impossible.

Consideration

Impact

Interest Accumulation

Immediate interest accrual increases the total repayment amount.

Career Flexibility

Repayment obligations may limit job choices to higher-paying roles.

Financial Freedom

Can delay major life milestones and investments.

Mental Health

Long-term debt can lead to stress and influence career decisions.

While MSc education loans open doors to advanced degrees, they also come with financial responsibilities that require careful planning and consideration.

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Summary

This section highlights the key points about MSc education loans covered earlier. These loans provide critical financial support for pursuing advanced degrees, with the average graduate student debt amounting to 88,220. Below is a quick comparison of loan options and their main features:

Loan Type

Interest Rate

Key Features

Federal Direct Unsubsidized

8.08%

1.057% loan fee, flexible repayment terms

Federal Grad PLUS

9.08%

4%+ loan fee, requires a credit check

Private Loans

Varies

Based on credit score, may need cosigner

When deciding on an MSc education loan, keep these factors in mind:

  • Funding Options: Federal loans often offer advantages like income-driven repayment plans and potential loan forgiveness. You can borrow up to 20,500 annually through these programs.
  • Repayment Flexibility: Look for loans with moratorium periods and repayment structures that align with your post-graduation financial plans.
  • Borrowing Costs: Only borrow what you truly need to reduce the interest burden. Studies show that having a cosigner can boost approval chances by 3.5 times.

While longer repayment terms can make monthly payments more manageable, they also increase the total interest paid over time. Consider your future earning potential carefully when choosing loan terms to ensure your repayment plan is sustainable. For more detailed information on eligibility, loan types, and application steps, refer back to the earlier sections.

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Faqs About Education Loan For MSc Students

What are the pros and cons of choosing a collateral loan versus a no-collateral loan for MSc studies?

When choosing between a collateral loan and a no-collateral loan for your MSc studies, it’s essential to consider the pros and cons of each option carefully.

Collateral loans typically offer lower interest rates and allow you to borrow larger sums, making them a good fit for covering high tuition fees or the costs of studying abroad. They can also be more accessible if your credit score isn’t strong, as the collateral reduces the lender’s risk. However, the major drawback is the possibility of losing the asset you pledged if you’re unable to repay the loan.

On the flip side, no-collateral loans don’t require you to pledge any assets, which can be a relief if you don’t own property or other valuable items. While this removes the worry of losing personal assets, these loans often come with higher interest rates and stricter eligibility criteria, which might be a hurdle for students with limited or no credit history.

The best choice depends on your financial situation, earning potential after graduation, and how comfortable you are with taking on certain risks.

What steps can international students take to improve their chances of getting an education loan for studying abroad?

International students aiming to secure an education loan for studying abroad can improve their chances by focusing on a few important factors:

  • Build a solid credit profile: A credit score above 700 can make a big difference, not only in getting approval but also in securing better interest rates.
  • Opt for well-regarded programs and universities: Lenders are more inclined to approve loans for programs with strong career potential and universities with a good reputation.
  • Organize all necessary documents: Make sure you have your academic records, financial statements, and any other paperwork the lender might require.
  • Include a co-signer if possible: A co-signer with a strong credit history can significantly improve your chances of getting approved, especially for international students.

Focusing on these areas can help students present a stronger application to lenders and increase the likelihood of loan approval.

What repayment options are available for MSc education loans, and how do they affect financial planning after graduation?

Repayment Options for MSc Education Loans

When it comes to repaying your MSc education loan, you’ll generally have three main options: standard repayment plans, graduated repayment plans, and income-driven repayment plans.

  • Standard repayment plans come with fixed monthly payments spread over a set term, typically ranging from 10 to 30 years.
  • Graduated repayment plans start with smaller monthly payments that gradually increase over time, making them a good fit if you expect your income to grow in the near future.
  • Income-driven repayment plans adjust your monthly payments based on your income and family size, bringing more flexibility to your financial commitments.

Each repayment plan can have a big impact on your post-graduation financial strategy. For instance, income-driven plans can help ease the burden during the early stages of your career, giving you breathing room to build savings or make investments. On the flip side, standard repayment plans might require more disciplined budgeting, but they often allow you to pay off your loan faster - potentially freeing you up to focus on milestones like buying a home or preparing for retirement.

Can I apply for an MSc education loan before receiving my university admission letter?

Some lenders may allow conditional pre-approval, but most require the official admission letter from the university as a mandatory document. If you're still applying, focus on preparing the rest of your documentation and shortlist potential lenders to speed up the process later.

What expenses beyond tuition can be covered by an MSc education loan?

Education loans typically cover a range of costs, including:

  • Tuition and academic fees
  • Living expenses (rent, food, utilities)
  • Travel and visa expenses (for international students)
  • Laptop and study materials
  • Health insurance and exam fees
  • Always check the loan’s cost coverage breakdown to avoid surprises.

Is it possible to refinance my MSc education loan later for a better interest rate?

Yes. Many borrowers refinance after graduation when their credit profile improves or when they start earning. Refinancing with a lower rate can significantly reduce your interest burden, but be cautious — doing so may cause you to lose federal loan benefits if you’re refinancing from federal to private.

Can I get a loan for an MSc if I already have an existing student loan from my undergraduate degree?

Yes, but lenders will evaluate your existing debt-to-income ratio, academic history, and repayment behavior. Having an existing loan doesn’t disqualify you, but managing multiple loans requires careful planning to avoid over-borrowing or repayment difficulties.

What happens if I decide to drop out or defer my MSc program after taking a loan?

You must immediately inform your lender. Dropping out typically triggers early repayment terms, and the moratorium period might end sooner. Some lenders may allow temporary deferment or restructuring options, but these are case-specific and may impact your credit.

Are MSc education loans available for part-time or online degree programs?

It depends on the lender. Many private lenders and banks prefer full-time, accredited, on-campus programs — especially for international loans. However, some newer fintech lenders now support online or hybrid MSc programs if they’re from recognized institutions.

Can international students apply for an MSc education loan without a co-signer?

While difficult, it’s not impossible. Some lenders, especially international education loan providers (like Prodigy Finance or MPower Financing), offer loans without requiring a co-signer or collateral, but the interest rates may be higher. Your eligibility will depend on factors like your program, university, and future income potential.

Does taking an education loan affect my visa approval chances?

In most cases, a sanctioned education loan strengthens your visa application because it shows proof of funds and financial planning. However, make sure the loan disbursement timelines align with your visa processing schedule.

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