If you’re planning to study abroad for Fall 2025, probably you must have already received admission offers or must be waiting for them. Either way, one big question on your mind may be: “How do I pay for my education?” Don’t worry, this blog will help you understand everything about an education loan—what does it cover, who can apply, and how to get one. Let us break it down!

What does an education loan cover?

An education loan helps you pay for:

1. tuition fees
2. living expenses (rent, food, transport, etc.)
3. health insurance
4. other study-related costs (books, laptop, etc.)

Who provides an education loan?

You can apply for an education loan from:

1. Nationalised Bank like State Bank of India, Canara Bank
2. Private Bank like HDFC Bank, ICICI Bank
3. Cooperative Bank like Cosmos Bank, Saraswat Bank
4. NBFC (Non-Banking Finance Corporation) like Credila Financial Services, InCred finance

Who is eligible for an education loan?

Each bank has different rules, but the common requirements are as below:

If you need guidance on the best universities in USA and Germany or need overseas education consultants, reach out for expert advice.

• The applicant and co-applicant (usually parents/guardian) should be citizens of India and over 18 years of age.
• Student should have a confirmed admission from an accredited and recognised overseas university.
• The co-applicant should have a regular source of income and security to offer if it is a secured loan
• The co-applicant should have a good CIBIL score, generally 750 and above.

What is the maximum amount of loan one can avail of?

The maximum loan amount you can avail of depends on several factors, including:

• Your profile
• The university you are applying to
• Your financial background

That being said:

• Secured loans (with collateral): Many lenders offer loans without an upper limit if you provide sufficient collateral.
• Unsecured loans (without collateral): The maximum loan amount typically ranges from Rupees 45 to 50 lakhs.

It is important to note that these amounts can vary depending on the lender and other specific conditions.

If you are applying for Fall 2026, read this blog to know more about how to building a strong profile.

What is the tenure of a student loan? 

The tenure of an education loan typically ranges from 10 to 14 years, depending on the lender and the loan amount. In addition, most of the loan providers offer a moratorium (or grace) period of about 2 to 3 years, during which you are not required to repay the loan, often allowing you time to complete your studies and settle into your career.

How much time is required for processing an education loan?

Under normal conditions, student loans are processed in 15 to 30 days.

Documents required for applying for an education loan:

1. Duly filled application form
2. Passport-sized photographs of the applicant and the co-applicant
3. Photo ID: PAN/ Passport/ Driving License/ Aadhaar Card of the applicant and co-applicant
4. Proof of Residence.
5. Academic documents:
   • HSC Mark sheet
   • Mark sheet of subsequent years of graduation
   • Mark sheet of entrance exams like GRE, IELTS, TOEFL etc. 
   • Scholarship documents (if applicable) 
6. Proof of admission: Printed admission letter/I-20 form received from the college or university
7. Bank statements of co-applicant: Usually statements of the last 8 to 12 months 
8. Income proof of co-applicant:
   • For a salaried person:
     • The last three salary slips
     • Form 16 of the last two years
   • For a self-employed person:
     • Income Tax returns of the last two years
     • Financial statements of the last two years certified by CA
     • Proof of office (Lease deed, a Title deed, Utility bill etc.) 
9. Collateral documents:
   • Property title deed
   • 7 / 12 extracts in case of land
   • Registered sale deed.

The list above is for reference purposes only. Requirements may vary depending on the financial institution. Therefore, it’s always a good idea to verify the specific requirements with an authorized representative of the institution in question.

Frequently Asked Questions:

Can I apply for a loan even if my admission is yet to be confirmed? 

Yes, you can! Most banks accept loan applications even if your university admission is yet to be confirmed or is still in process. This is called Pre-Sanction of loan Here’s how it typically works:

• Application assessment: The loan application will be evaluated based on your overall student profile, which includes:
  • Academic performance
  • Other factors such as the credit profile of your co-applicant
• Approval process: The bank may approve the loan and issue a sanction letter, but it will typically include the condition that:
  • Admission must be confirmed before the loan is disbursed.

This way, you can proceed with your loan application even before your admission is finalized.

Is there any tax benefit on availing of student loans? 

Yes, there is! Under Section 80E of the Income Tax Act of India, 1961, individuals can claim a tax deduction on the interest paid on student loans. This benefit applies if the individual is filing their Income Tax Return only under the old tax regime.

What is acceptable as collateral?

Collateral can be classified into two categories:

• Movable Assets:
  • Financial assets such as fixed deposits in the respective bank.
• Immovable Property:
  • Flat, house, or non-agricultural land.

These are the common forms of collateral that banks typically accept when securing a loan.

Final Thoughts

An education loan can make studying abroad possible, even if you don’t have all the funds right now. The key is to apply early, compare options, and be prepared with all documents. Wishing you all the best for your studies and future!

As India’s leading Study Abroad Consultant, Dilip Oak’s Academy offers a comprehensive suite of services, including TOEFL, IELTS, GRE coaching, as well as GRE Self Prep. Furthermore, our admission counseling services can guide you through the entire process, from Shortlisting Universities to Visa Counseling. With our expertise, we have successfully sent 32,000 students to various prestigious American universities like MIT, Stanford, Cornell, and Carnegie Mellon. To enroll in our comprehensive overseas education consultancy services, book a free consultation or call us at 91-20-67444222.