Education Loan Process in India: Step-by-Step Guide 2025

If you want to study further but money is becoming a barrier, an education loan can help you. The education loan process in India is simple if you know the right steps. Many students are not aware of how to apply, what documents are needed, or how much loan they can get. In this guide, we will explain everything step by step so you can plan your higher studies without stress.

At Sukham Microfinance, we help students and families understand loans better. On this page, you will learn what is education loan in India, eligibility, documents, online application process, and even the tax benefits linked to it.

What is Education Loan in India

An education loan in India is money borrowed from a bank or financial company to pay for studies. It can cover tuition fees, books, travel, and hostel expenses. You have to repay this money after completing your studies. Many students take this loan for higher education in India and abroad. When you think about what is an education loan in India, remember it is financial support that makes education possible even if your savings are not enough.

Why Students Take Education Loans

Many students in India dream of studying in good colleges or abroad. But fees are high, and not every family can manage them. With an education loan, you can:

• Pay fees on time
• Focus on studies without worrying about money
• Cover both Indian and foreign education costs
• Get extra support for travel, hostel, and other needs

This is why education loans have become popular for student loans for higher education.

Education Loan Eligibility in India

Every bank and finance company has rules for giving loans. Here are some basic education loan eligibility in India points:

• You should be an Indian citizen
• You must have admission proof from a recognized college or university
• For undergraduate loans, you should have cleared your 12th exams
• For postgraduate loans, you should have completed graduation
• Your parent or guardian should have a steady income to act as co-applicant

Some lenders may also check your academic record before approving.

What Documents Required for Education Loan in India

One of the most common questions students ask is, what documents required for education loan in India. Below is a simple list:

• Admission letter from the college or university
• Mark sheets of previous exams
• Identity proof like Aadhaar, PAN, or Passport
• Address proof such as electricity bill or ration card
• Income proof of parent or guardian
• Bank account statement of last six months
• Passport size photographs

If you are applying for studying abroad, you may also need your visa copy and travel details.

Online Education Loan in India

Today, you don’t always need to visit a bank physically. Many lenders allow online education loan in India. The process is simple:

• Visit the bank or NBFC website
• Fill the loan application form with personal, academic, and financial details
• Upload scanned copies of documents
• Wait for verification
• Get approval and disbursement

This saves time and is more convenient for students living in different cities.

Step-by-Step Education Loan Process in India

Let’s now see the education loan process in India in detail:

• Research lenders – Compare different banks and NBFCs, interest rates, and repayment terms.
• Check eligibility – Ensure you qualify based on course, income, and admission status.
• Collect documents – Keep all necessary papers ready.
• Apply – Submit the application online or offline.
• Loan approval – Lender checks your details and approves if everything is correct.
• Disbursement – Loan amount is sent directly to your college or university account.
• Repayment – After finishing studies and getting a job, you start EMI payments

This is the clear step-by-step student loan process for 2025.

Interest on Education Loan in India

The interest on education loan in India depends on the lender. Generally, it is between 8 percent to 12 percent. Government schemes sometimes offer lower rates. The interest is calculated on the loan amount, and EMIs start after a moratorium period.

Maximum Amount for Education Loan

A big question for students is, how much student loan can I get in India. The maximum amount for education loan depends on where you are studying:

• For studies in India: up to 10 to 20 lakh
• For studies abroad: up to 30 to 40 lakh
• Some lenders may offer even higher loans depending on collateral

Education Loan Tax Benefit

One good thing is that you also get an education loan tax benefit under Section 80E of Income Tax Act. This allows you to claim a deduction on the interest you pay. There is no upper limit on this deduction. Many students and parents also ask about education loan deduction in income tax. Remember, only the interest part is deductible, not the principal.

Best Education Loans for Students in India

While there are many lenders, the best education loans for students in India depend on your need. Some options include:

• Public sector banks with government subsidy schemes
• Private banks with faster processing
• NBFCs with flexible repayment options
• Higher Education Financing Agency for special funding support

At Loan Products by Sukkham Micro Finance, you can explore different student loan options and choose what works best for you.

Student Loan for Higher Education Abroad

Many students take a student loan for higher education in India or abroad. It helps cover large expenses. You do not need to depend only on savings or family income. Loans are available for engineering, medicine, management, and many other courses.

Higher Education Financing Agency

The Higher Education Financing Agency (HEFA) is a joint venture by the Government of India and Canara Bank. It provides loans for infrastructure development in higher education institutions. While it is not a direct student loan, it helps improve facilities in universities where you may study.

Repayment of Student Loans

Repayment usually starts 6 to 12 months after you complete your course or get a job. The period is called a moratorium. You pay in EMIs which include principal plus interest. Choosing the right repayment plan is important so that your monthly budget is not affected.

Why Choose Sukkham Micro Finance for Education Loan

At Sukkham Micro Finance, we make loan application simple. Whether you are applying for a small or big loan, we guide you through every step. You can also reach us directly through our Contact Us page for quick support.

Final Thoughts

Now you know the complete education loan process in India. From eligibility to documents, tax benefits to loan amount, every step is clear. Taking the right loan will support your education and reduce financial stress. If you still have questions, you can always Contact Us for guidance.