Can I get an education loan in India?


I am a NRI and I want to help my relative’s children with higher education. Can I get an education loan in India?


Yes you can get an education loan in India for the higher education for your relatives in India. You will however need to be the parent or a guardian of the child. This means you can seek an education loan for your relatives like nephews and nieces. Under an NRI education loan you can seek tuition fee along with any admission fee, costs of books and equipment and other expenses. The margin money for NRI education loan for loans up to Rs. 4 Lakhs is zero while for loans above Rs. 4 Lakhs is 15% of the loan amount. For loans above Rs.4 Lakhs you would need to provide a collateral security or a suitable third party guarantee as per the satisfaction of the bank.


Hi Vishal,

Yes. You can take an Education Loan in India. You can approach any bank for an Education Loan. The interest rate will differ from one bank to another. The interest rate can range between 10% and 14%. Only some loans need collateral. The eligibility criteria might differ. However, some of them are:

• Any individual aged between 18 and 35 years can avail an Education Loan to pursue studies at any approved university in India or abroad.
• Students can get Education Loans for management courses, engineering courses, medicine, and graduate and post graduate degrees, arts, architecture, pure science, hotel management, etc.
• The expenses covered under an Education Loan include tuition fees, exam fees, lab and library fees, caution deposit, travel, books and equipment, projects and study tours.
• Borrowers have to bring in a margin of 5% to 15% for loans taken for foreign studies.
• During the moratorium period, borrowers have to pay the interest with the principal payment starting when the loan tenure begins.
• Education Loans can be repaid in monthly instalments through ECS or via post-dated cheques to the bank.
• Generally, banks sanction Education Loans with tenure to up seven years, inclusive of the moratorium period.
• A co-applicant has to be selected for education loans taken for full time courses. Co-applicants can include siblings, spouse, parents or other family members.
• Banks will sanction a maximum of Rs. 20 lakhs with the moratorium period and up to a maximum of Rs. 10 lakhs for loans without a moratorium period.
• No security has to be submitted for Education Loans taken up to Rs. 4 lakhs. Third party guarantee has to be furnished for loans between Rs. 4 lakhs and Rs. 7.5 lakhs and tangible collateral security is required for loans above Rs. 7.5 lakhs.
• The Central Government has also introduced an interest rate subsidy scheme for repayments done during the moratorium period for the benefit of the poor.

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BB Expert