Dreaming big shouldn’t come with a price tag that holds you back. Education loans in 2025 bridge the gap between ambition and affordability, with interest rates starting as low as 4.00% p.a. Whether you're eyeing for a masters in the United Kingdom, or a diploma in Delhi, this article will guide you through the latest interest rates, loan types, and what you need to know to fund your education.
Highlights for Educational Loan Interest Rates 2025
Feature
Details
Loan Amount
Up to ₹50 lakh (domestic), ₹1 crore (abroad)
Interest Rate (Public/Private)
4.00% – 16.00%
Interest Rate (RRBs)
8.50% – 13.60%
Repayment Tenure
Up to 15 years
Moratorium Period
6 months to 1 year post-course
Tax Benefits
Interest deductible under Section 80E (up to 8 yrs)
Collateral Requirement
Required for high-value loans
Eligible Courses
UG, PG, professional, diploma, skill-based
Education Loan Interest Rates 2025
Bank Name
Interest Rate (% p.a.)*
Bank of Baroda
7.60% to 13.20%
Punjab National Bank
4.00% to 12.35%
Canara Bank
8.10% to 11.50%
Union Bank of India
7.00% to 11.50%
State Bank of India
7.55% to 10.65%
Central Bank of India
8.55% onwards
IDBI Bank
4.00% to 11.50%
Indian Overseas Bank
8.25% to 12.50%
HDFC Bank
10.50% onwards
Axis Bank
9.58% to 12.75%
Federal Bank
11.75% to 15%
ICICI Bank
10.25% to 13.75%
Kotak Mahindra Bank
Upto 16%
Karnataka Bank
9.00% onwards
*Note: These interest rates are applicable as of June 2025 and are subject to change as per the bank’s regulations.
Students who would like to pursue education in India can apply for this loan type. The loan will get approved only if the applicant is admitted to an Indian educational institution and meets all other lender criteria.
Overseas Education Loan
Such loans help students realise their dream of pursuing the course of their desire in a foreign institution. The loan covers the airfare, accommodation, and tuition fee for students who wish to study abroad only if they satisfy the eligibility criteria.
Based on Course
Undergraduate Loans
This type of education loan is provided for students to give financial aid to students so they can complete their undergraduate degrees. An undergraduate degree will usually be a 3 to the 4-year long course under various specialisations. Having an undergraduate degree helps individuals to land a decent job and start earning.
Postgraduate Loans
Many undergraduates would like to continue their education with a postgraduate course, usually a 2-year long course in India. An advanced degree is desired to get more profound knowledge in the area of interest.
Career Development Loans
Many professionals who work for a few years in corporate jobs prefer to pause their career and take up professional courses and training to improve their employment prospects. Such individuals would strive hard to get into reputed business and technical schools to polish their skills and reach greater heights in their career.
Based on Collateral
Loan Against Property, Deposits, and Securities
You can pledge immovable assets, such as agricultural land, residential land, flat, house, and others, fixed deposit certificates, recurring deposits, gold deposits, bonds, debentures, and equity shares to get the necessary financing to pursue education.
Third-Party Guarantee
A guarantee letter from an employee of the bank or a home bank can help the student get an education loan.
Features and Benefits
The loan amount can go up to Rs.1 crore for international students and up to Rs.50 lakh for domestic students.
100% financing available for certain conditions.
The financing covers other expenses, such as student exchange travel expenses and laptop.
Preferential forex rates may be available for international disbursements.
Parents should be joint borrowers for the education loan.
Loan repayment tenure can go up to 15 years.
Loan moratorium period of up to 6-months to 1 year from completing the course.
Tax benefits up to 8 years on the loan interest payment.
List of Expenses Covered under Education Loan
Fees payable to educational institutes.
Examination/library/laboratory fee.
Travel expenses/passage money for studies abroad.
Insurance premium for student borrowers, if applicable.
Caution deposit, building fund/refundable deposit supported by institution bills/receipts (total expense should not exceed 10% of total loan).
Purchase of books/equipment/instruments/uniforms (total expense should not exceed 20% of total loan).
Purchase of computer at a reasonable cost, if required to complete the course (total expense should not exceed 20% of total loan).
Any other expense required to complete the course, such as study tours, project work, thesis, etc. (total expense should not exceed 20% of total loan).
While computing loan required, scholarships, fee waiver, etc., if any available to the student borrower.
List of Courses Covered under an Educational Loan
Graduation and post-graduation courses (professional/technical/diploma) conducted by approved universities or colleges under UGC, IMC, AICTE, government, AICTE, AIBMS or CMR
Regular degree or diploma courses administered by autonomous institutions such as IIM, IIT, IISc, XLRI, NIFT, NID, ICWA, CA, CFA, etc.
Regular degree or diploma courses such as pilot training, aeronautical, shipping, and more approved by the Director General of Civil Aviation, Shipping, other regulatory authority.
Job oriented courses (professional/technical) for graduation, post-graduation or diploma such as MBA/MCA/MS, courses conducted by the Chartered Institute of Management Accountants (CIMA) - London or Certified Public Accountant (CPA) - USA.
Loans for skill development.
Education Loan Eligibility
Loans are granted to approved undergraduate programmes, postgraduate programmes, PhDs, diploma courses of six months or longer duration, job-oriented courses and technical/professional courses.
Applicants should be studying or obtaining admissions in approved recognised institutions, government institutions, professional institutions and international colleges and universities.
Applicants should have completed 10+2 (12th standard) for an undergraduate course and a degree for a postgraduate course.
Documents Required
KYC documents
Mark sheets of 10th, 12th, graduation and entrance exams
Admission letter
Fee structure
Co-applicant KYC and income proof in some cases
Additional documents may be requested in some cases.
Tax Benefits on Education Loan
When you start repaying the education loan, the interest segment you pay towards the loan every month can be used to claim income tax deduction under Section 80E. However, the deduction cannot be claimed on the principal repayments.
Also, there is no limit on the amount you can claim for interest repayment on an education loan. As proof of this, you need to obtain a certificate from the bank. The facility is available only for eight years from the year you start repaying the loan or until the interest is fully repaid, whichever comes first.
Education Loan EMI Calculator
The education loan EMI calculator is a smart tool that calculates your monthly EMI amount payable to the lender. It’s a slider where you enter the values, Principal amount (P), Time duration (N), and Rate of interest (), to find out your EMI and figure out your finances in advance.
How to Apply for an Education Loan
You can either go to the bank of your choice and enquire about the loan process, or you can apply online.
Following are the steps to apply for a educational loan online:
Step 1: Visit the bank of your choice and choose an educational loan scheme.
Step 2: Download the application form from the bank website or click on the ‘Apply Now’ button.
Step 3: Fill the application form, attach the necessary documents, and submit the form.
Step 4: The bank will initiate the process by verifying your documents, evaluating the course of study for which you wish to take the loan, and collateral you can provide.
Step 5: Once the loan is approved, the bank will release the loan amount.
You can even apply for an educational loan offline by visiting the branch of the bank where you wish to apply for a loan. Fill the application form and submit it with the necessary documents. The bank will verify your application and process the loan.
Study Loan Repayment System
Some lenders provide a 6-month to 1 year grace period after completing the course to land a suitable job and start the repayment process. This grace period may vary with the lender. Once you land a job within this period, you may start the repayment process in the form of EMIs.
You can get in touch with the bank officials, and based on your monthly income, the bank officials will suggest a certain EMI. If you agree with this suggestion, you can start making the monthly repayments. Otherwise, you may negotiate with the amount. In any case, the maximum repayment tenure allowed is eight years in general.
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