A Stepwise Guide to Getting an Education Loan in India

India is witnessing a remarkable surge in the demand for higher education. In 2020-21, a total of 4.14 crore Indian students were pursuing higher educational courses aimed at skill development. As the aspirations of students soar and the Indian academic landscape evolves, the cost of pursuing advanced studies has also grown significantly. To bridge the financial gap and enable talented individuals to access quality education, education loans have become invaluable. Whether you’re planning to study in India or abroad, understanding how to get an education loan is essential.

Follow these steps to acquire an education loan and chase your personal horizons:

Step 1: Secure Admission

The first step is to research and choose the educational course and institute you want to attend. Consider factors like tuition fees, living expenses, and the reputation of the institution. Having a clear understanding of your financial requirements will help you determine the loan amount needed.

Step 2: Identify Eligibility Criteria

Different lenders and loan schemes have varying eligibility criteria. However, common factors include:

  1. Indian Citizenship: The applicant should be an Indian citizen.
  1. Age Limit: Most lenders have a minimum and maximum age limit for education loan applicants. Typically, the minimum age is around 18 years, and the maximum age for an education loan can vary but is usually around 35 to 40 years. 
  1. Admission to Recognised Courses: The applicant should have secured admission to a recognized educational institution or course in India or abroad. The course should be approved by relevant regulatory bodies, such as the University Grants Commission (UGC) or the All India Council for Technical Education (AICTE).
  1. Academic Performance: Lenders may consider your previous academic performance, including the marks obtained in qualifying examinations, to determine your loan terms and eligibility.
  1. Credit Score: While some lenders may not emphasize credit scores for education loans, having a good credit score can strengthen your application and may lead to more favorable terms. A credit score of above 750 would be ideal to get the best loan terms available.
  1. Co-Applicant or Guarantor: In most cases, especially if the loan amount is large, education loans require a co-applicant or guarantor, often a parent, relative, or guardian, who shares the responsibility of loan repayment. The co-applicant or guarantor should have a stable source of income and a good credit history. Documents will have to be furnished accordingly.
  1. Collateral (if applicable): For higher loan amounts, lenders may require collateral, such as property, fixed deposits, or other assets. The collateral’s value should cover a certain percentage of the loan amount. You can pledge any of the following assets a collateral for an education loan:
  • House or flat
  • Non-agricultural land
  • Fixed deposits
  • Term insurance policy
  • Government bonds
  1. Loan Amount: The loan amount should be within the maximum limit specified by the lender. Loan limits can vary among lenders and depend on factors like the course’s nature, location, and the institution’s reputation.
  1. Income of Co-Applicant: The co-applicant’s or guarantor’s income should be sufficient to cover the loan’s monthly installments comfortably. Lenders calculate the debt-to-income ratio to assess repayment capacity.
  2. Repayment Capacity: Lenders evaluate the applicant’s ability to repay the loan after completing the course. Some lenders may consider factors like the applicant’s employability prospects and expected income post-graduation.

Step 3: Choose Your Loan and Lender

Explore different lenders, including banks, non-banking financial companies (NBFCs), and government schemes, such as the Vidyalakshmi Education Loan portal. Compare interest rates, loan terms, processing fees, and repayment options. Government schemes may offer lower interest rates and extended repayment periods but may come with stricter restrictions on use.

LenderLoan AmountInterest Rate (p.a.)Tenure
SBI BankUp to Rs. 20 lakhs9.15 -11.15%Up to 15 years
HDFC BankUp to Rs. 150 lakhs9.55% – 13.25%Up to 15 years
ICICI BankUp to Rs. 1 croreFrom 9.85%Up to 12 years
Axis BankRs. 50,000 to Rs. 75 lakh6.50-14.70%Up to 10 years
Bank of BarodaUp to 1 croreFrom 8.55%Up to 15 years
VidyalakshmiUp to Rs. 4 lakhs8.40%15 years

Step 4: Prepare the Paperwork

Prepare the necessary documents required for the loan application, which typically include:

  • Proof of identity (Aadhaar card, passport, or voter ID).
  • Proof of address (utility bills or rental agreement).
  • Admission offer letter from the educational institution.
  • Academic transcripts and certificates.
  • Income proof of co-applicant or guarantor.
  • Bank statements of co-applicant or guarantor.
  • Income tax returns.
  • Credit reports of both applicants.
  • Collateral documents (if applicable).
  • Passport-size photographs.

Ensure that you have both hard and soft copies of these documents.

Step 5: Calculate Loan Amount

Determine the total cost of education, including tuition fees, living expenses, travel costs, and any other relevant expenses. Subtract scholarships, grants, and personal savings to calculate the required loan amount. It’s advisable not to borrow more than what is necessary to avoid excessive debt.
You can always use the free Education Loan EMI Calculator by Finnable to estimate your monthly repayment amount, loan tenure, and interest rate you prefer.

Step 6: Select Your Co-Applicant or Guarantor

Most education loans require a co-applicant or guarantor, often a parent or guardian, who shares the responsibility of repayment. Ensure that your co-applicant or guarantor has a good credit history and a stable source of income.

Step 7: Complete the Loan Application

Fill out the loan application form of your chosen lender. Pay attention to accuracy and completeness, as any errors can delay the approval process. Some lenders offer online application options for added convenience.

Step 8: Loan Approval and Disbursement

Once your application is processed and approved, the lender will issue a sanction letter outlining the loan terms and conditions. After accepting the offer, the funds will be disbursed directly to the educational institution or to your account, depending on the lender’s policies.

Make sure you create a repayment plan that aligns with your post-graduation financial prospects. Most lenders offer a grace period, allowing you to start repaying the loan after completing your studies. Stay in touch with your lender throughout your course to address any concerns or changes in your circumstances.


As the thirst for higher education in India surges, education loans emerge as a lifeline for countless aspiring scholars. Wisely navigate the eligibility criteria to select the right lender. Once your loan is approved, funds will flow directly to your educational institution. 

Crafting a robust post-graduation repayment plan is the ultimate step. Education loans not only bridge the financial chasm but also empower dreams, enabling you to grasp the transformative power of knowledge and envision a brighter tomorrow. By following these steps and being well-prepared, you too can secure the financial support needed to pursue your educational aspirations confidently.


Frequently Asked Questions (FAQs):

Finnable has set a required minimum age for personal loan of 21 years for individuals to be eligible for a personal loan. This ensures that applicants have reached legal adulthood and are capable of entering into a financial agreement.

Yes, Finnable understands the financial needs of young borrowers and offers personalised loan options tailored to their specific requirements. Whether it's financing higher education, purchasing essential items, or starting a business venture, Finnable provides support to young individuals seeking financial assistance.

Borrowers nearing retirement may have unique financial needs, such as retirement planning, medical expenses, or supporting their children's education. Finnable offers personalised loan solutions that consider the specific circumstances of pre-retirement individuals, helping them meet their financial goals.

Unfortunately, no. Finnable does not, at the moment, offer any loans to senior citizens. Currently, 60 is the maximum age for personal loans set by Finnable

Other than personal loan age limits, Finnable considers various other factors for determining loan eligibility. These factors may include the applicant's income, credit score, repayment capacity, and employment stability. By assessing these aspects comprehensively, Finnable ensures that borrowers across different age groups can access the loan products that best suit their financial needs. 


Amit Arora

I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
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