In India, it is very relevant to education and academic excellence. An educational loan is a loan that allows young men and women to pursue their studies in India or abroad through the provision of a loan to finance their higher education. This is very useful if the child does not have ample funding to pursue higher education. For an undergraduate, a post-graduate, or a Ph.D., an educational loan may be given.

The loan refund is only made after the student finishes his or her class and completes a 6 month to one year’s grace period in which the student can work and start to make money.


  • Good loan amount: As an educational loan for domestic institutes and up to Rs. 1 crore for foreign organizations, a maximum loan sum of Rs. 50 Lakhs is likely. The credit can also be used on the basis of the institution’s tuition fee. In certain situations, living expenses and other education costs such as books, laptops, and more are also covered by the Bank.
  • Flexible tenures: Educational loans will last up to 10 to 15 years. This lowers the student’s EMI burden and can quickly refund the loan balance after the moratorium.
  • Good education: One of the key benefits of taking an educational loan is the student’s effective education which will benefit him/her over the long term by a good career and living. It contributes towards achieving academic excellence which adds to a curriculum vitae that lends one job security and lifetime satisfaction into a well-established business.
  • Tax benefits: In accordance with section 80E of the Income Tax Act passed in 1961, an interest charged by the education loan can be claimed by way of a tax deduction. However, only the interest of the loan, rather than the principal sum, is eligible to obtain the income tax benefit since it is not.
  • Government subsidy: The Indian government has the scheme to help and not deprive the weaker groups in society of education, due to inadequate financial funds. Accordingly, during the whole moratorium, and six months after obtaining work, the Government of India offers full interest subsidies, as early as the next six months.
  • Moratorium period: The refund of the education loan doesn’t start immediately after completing the course. The banks provide a vacation time of 1 or 6 months, called moratorium duration, after completion of courses. Thus, during this one year, you don’t have to pay the loan, but the interest rate applies for the year. This helps the student to get a job to pay off the loan and significantly reduces the student’s burden.
  • Collateral free loans for premier institutions: An significant benefit of an educational loan is that the whole loans which be paid out a collateral-free when the student is admitted to a leading institute such as IIT or IIM. If the college is not a primary institute, only up to 4 lakhs without collateral could be taken. In the majority of cases, credit amounts exceeding 4 lakhs require collateral.


In general, interest rates on education loans start at just 9% and can increase. Most interest rates are set at the lender’s absolute discretion and can vary depending on certain factors.