Interest Rate
7.5% to 13% p.a. depending on the course, institution ranking, and whether collateral is provided. Government schemes offer concessional rates for EWS/OBC students.
Education Loan — Fund Higher Studies Without Draining Family Savings
Don't let your child's education suffer because of existing debt pressure. Education loans offer moratorium periods, low interest rates, and tax benefits — a far better option than borrowing from app loans to pay college fees.
- Covers tuition, hostel, books, and living expenses — up to ₹1.5 crore for abroad studies
- Moratorium period: No EMI during course + 6-12 months after graduation
- Tax deduction on entire interest paid under Section 80E — no upper limit
Education Loan at a Glance
Key numbers for planning your child's future.
Loan Amount
Up to ₹20 lakh (India) without collateral. Studies abroad can get up to ₹1.5 crore with collateral from top-tier institutions.
Moratorium Period
No EMI during course duration + 6 to 12 months after completion. This grace period lets the student find employment before repayment begins.
Repayment Tenure
Up to 15 years after the moratorium ends. Longer tenure keeps monthly EMI manageable on starting salaries. Some lenders offer step-up EMI plans.
Eligibility Criteria
- Student Age: 18+ years with confirmed admission to a recognized institution
- Co-Applicant: Parent, guardian, or spouse with stable income (mandatory)
- Co-Applicant CIBIL: 700+ preferred; some lenders accept 650+
- Collateral: Required for loans above ₹7.5 lakh (property, FD, or other assets)
- Courses Covered: UG, PG, Professional (engineering, medical, MBA), and vocational courses from recognized institutions
- Academic Record: Consistent academic performance expected by most lenders
Documents Required
Student: Aadhaar + PAN, marksheets, admission letter, fee structure
Co-Applicant: PAN + Aadhaar, 6 months salary slips, bank statements, ITR
Collateral (if applicable): Property documents, valuation report
Course: Prospectus, fee schedule, scholarship details (if any)
Other: Passport photos, passport copy (for abroad studies)
Check EligibilityWhy Education Loans are Better Than App Loans for Fees
Never use predatory app loans for education expenses.
EMI-Free Study Period
Unlike app loans demanding repayment in 7-30 days, education loans give you the entire course duration + grace period before first EMI. Zero financial pressure during studies.
Unlimited Tax Deduction
Section 80E allows full interest deduction with no upper limit for up to 8 years. On a ₹10 lakh loan, this can save ₹50,000-1,00,000 in taxes over the repayment period.
Government Schemes Available
Central Sector Interest Subsidy (CSIS), Vidyalakshmi Portal, and state-level schemes offer interest subsidies for economically weaker sections — making education practically free for eligible students.
Covers Everything
Tuition, hostel fees, books, laptop, travel expenses, exam fees, library deposits — all covered under a single loan. No need to arrange funds from multiple sources.
India & Abroad
Finance courses in India (IITs, IIMs, AIIMS, NLUs) or top institutions abroad (USA, UK, Canada, Australia, Germany). Higher amounts available for globally ranked universities.
Builds Student's Credit
An education loan in the student's name starts building their credit history from day one. Timely repayment after placement creates a strong CIBIL foundation for their future financial needs.
Frequently Asked Questions
My parent has low CIBIL due to app loans. Can I still get an education loan?
This is challenging since most lenders check the co-applicant's (parent's) CIBIL. However, options include: (1) using the other parent or a relative as co-applicant, (2) providing collateral to offset credit risk, (3) applying to government banks which are more flexible with education loans, or (4) exploring government subsidy schemes that have relaxed credit requirements.
What is the difference between collateral and non-collateral education loans?
Non-collateral loans (up to ₹7.5 lakh) require no asset pledge but have higher interest rates and stricter CIBIL requirements. Collateral-backed loans (₹7.5 lakh+) accept property, FDs, or insurance as security and offer lower rates (7.5-9% vs 10-13%). For higher education abroad, collateral is almost always required.
When does repayment start?
Repayment begins after the moratorium period ends — which is typically course duration + 6-12 months grace period. For example, a 4-year engineering degree means you start EMI payments about 5 years after the loan is disbursed. Some lenders allow interest payment during the course to reduce total cost.
Can I get a loan for part-time or distance learning courses?
Most mainstream education loans are for full-time courses from recognized institutions. However, some NBFCs and fintech lenders offer loans for part-time MBA, online courses from top platforms (Coursera, edX), and skill development programs. Amounts are typically lower (₹50,000-5 lakh).
What happens if the student doesn't get placed after graduation?
Lenders may extend the moratorium period or restructure the loan. However, default will affect both the student's and co-applicant's CIBIL score. It's advisable to start partial repayment even with freelance or part-time income to avoid default status.
Do you handle the entire education loan process?
MudraTrust Finance guides you through lender selection, documentation, and application submission. We compare offers from banks, NBFCs, and government schemes to find the best rate and terms for your specific course and institution. All loans are processed by the respective financial institutions.