Education Loan in India: Everything You need to know about

Created on 13 Jun 2020

Wraps up in 3 Min

Read by 3.5k people

Updated on 10 Jul 2021

The first step towards gaining the knowledge, critical thinking, empowerment, and skills necessary to improve the world is Education. A fulfilling and successful life necessitates a high-quality education. It is no surprise that the expense of education in India and elsewhere is increasing year after year. If you wish to send your child abroad, the expenditures will be significantly higher. In such a situation, parents are almost forced to take out an educational loan in order to avoid burning their lifetime savings to pay for their children's education.

According to the National Sample Survey Office (NSSO), average private education expenditure has increased four-fold to more than Rs. 8,331 per student. While professional courses may range up to Rs. 72,000 per student.

Naturally, that’s not quite affordable for all. In such a situation, an education loan plays a critical function in blurring the lines between the shortage and the required amount.

Here are some things to consider if you're hoping to take out an educational loan for your children's future.

Eligibility for an Education Loan

Students can apply for an education loan to study in India or enhance their education abroad. At the very least, the candidate must have finished his or her higher secondary education. To be eligible for the loan, a candidate must be an Indian citizen, be accepted into a recognized educational institution by a competent authority in India or overseas, and then fill out a government e-form and wait for the loan to be approved.

Full-time, part-time, vocational, graduation, and post-graduation courses in engineering, management, medical, hotel management, and architecture are some of the courses that a bank can approve for the loan.

The maximum amount granted for studies in India and abroad, as well as the maximum loan that can be sanctioned and the loan targets that must be met, differ from one bank to the next. It covers basic tuition fees as well as additional costs not included in the price structure document.

Common problems faced & solutions in getting education loans

  1. Not Knowing which student loan to apply for

Many of us are unaware of what types of loans are available. For this, you'll need to conduct some study to figure out what kind of student loans you have.

  1. Downsized Loan amount

Many times, individuals ask for a loan for a given amount, just to have it drastically downsized because their financial need is only half of what they are applying for. The quick tip here is to plan loan amounts well in advance to avoid such instances.

  1. High EMIs

It should be unsurprising that this is one of the most common issues that student loan borrowers confront. It's been challenging to find solid, high-paying jobs since the global recession, especially for young people. Many recent grads are struggling to keep up with their minimum monthly student loan payments. Well then, what is it which will provide some breathing room while you work towards greater financial stability? In this case, one can adjust their EMI’s as per their repayment capacity & financial goals. Additionally, there are many full / part government as well as private scholarships available, which can lessen the burden of monthly EMI’s.

  1. Uncertain Repayment

Many students are questioning if they will ever be able to pay off their student loans because they are taking on ever-larger sums of debt and then being met by a historically difficult employment market. While non-repayment of loans can seem like a burden and having no suitable source of income may add to the misery. Well, in this case, there are many options available such as temporary suspension of loans, forbearance, delinquency, etc.


You will be better equipped to make decisions about your student loan payments if you understand the various risks and repercussions associated with these scenarios. Whatever you do, keep in mind that it's always best to be proactive and try to reach an agreement rather than allowing your debts to become late - or worse, default.

When applying for an education loan in a private or government bank, the procedures may differ. With private banks, a high-network individual can use his power authority, but this is not the case in government banks. Excessive authority and networking are accompanied by red tape and bureaucracy. It is up to us whether we want to look at the negative side of the coin, where energy can be wasted, or the positive side, where energy can be used for good.

Happy learning!

comment on this article
share this article
Photo of Rishika Mukherjee

An Article By -

Rishika Mukherjee

218 Posts


295 Post Likes


Mukherjee is an avid reader and loves to write as much as read. She is the youngest of all but handles chores like a 50-year-old woman. She takes a lot on her plate and somehow, eerily manages to get the job done. As Hazel Grace stated, she could read a good author's grocery list, and so would Miss Mukherjee. 

Topics under this Article

Share your thoughts

We showed you ours, now you show us yours (opinions 😉)

no comments on this article yet

Why not start a conversation?

Looks like nobody has said anything yet. Would you take this as an opportunity to start a discussion or a chat fight may be.

Under Invest

"A few" articles ain't enough! Explore more under this category.

Share this post
share on facebook


share on twitter


share on whatsapp


share on linkedin


Or copy the link to this post -

copy url to this post