Everything You Need to Know About Student Loans in India for 2025: Your Exciting Path to Higher Education

Introduction to Student Loans in India

Dreaming of pursuing higher education but worried about the costs? A student loan in India can make your academic dreams a reality! Whether you’re aiming for an IIT, studying abroad, or taking a vocational course, banks like SBI, PNB, ICICI, Axis, Bank of Baroda, and Canara Bank offer affordable education loans without collateral for up to ₹7.5 Lakhs. With competitive student loan interest rates in 2025, flexible repayment options, and tax benefits, now is the perfect time to explore your options. This comprehensive guide covers everything about student loans in India—from eligibility to application processes—so you can apply confidently and quickly. Let’s dive in!

Table of Contents

• What Is a Student Loan in India?
• Why Choose a Student Loan in 2025?
• Top Banks Offering Student Loans in India
  • State Bank of India (SBI) Education Loans
  • Punjab National Bank (PNB) – Vidya Lakshmi Scheme
  • ICICI Bank Education Loan
  • Axis Bank Education Loan
  • Bank of Baroda (BoB) Education Loans
  • Canara Bank Education Loans
• Comparison of Best Student Loan Banks in India
• Key Terms You Should Know
• Tax Benefits Under Section 80E
• Eligibility for Student Loans in India
• Application Process for Student Loans
• Documents Required
• Tips for Choosing the Best Student Loan
• Government Schemes and Subsidies
• FAQs About Student Loans in India
• Conclusion: Take the Next Step

What Is a Student Loan in India?

A student loan in India is money you borrow from a bank or financial institution to fund your education. It covers expenses like tuition fees, books, hostel charges, travel (for study abroad), and even laptops or equipment. You don’t start repaying until after your course ends, usually with a grace period called the moratorium period. Banks like SBI, PNB, ICICI, Axis, Bank of Baroda, and Canara Bank offer tailored schemes to make education accessible. In 2025, these loans come with low interest rates and flexible terms, especially for meritorious students.

Why Choose Student Loans in India?

Education costs are rising, but so are opportunities. A student loan helps you focus on studies without financial stress. Here’s why it’s a smart choice:

• Affordable Interest Rates: Student loan interest rates in 2025 range from 7.15% to 12.75% p.a., with concessions for girls and premier institute students.
• No Collateral for Small Loans: Loans up to ₹7.5 Lakhs often require no security, thanks to schemes like CGFSEL.
• Tax Benefits: Deduct interest paid under Section 80E for up to 8 years.
• Flexible Repayment: Repayment starts after a moratorium (course duration + 6–12 months).
• Government Support: Schemes like PM Vidyalakshmi offer subsidies for low-income families.

Top Banks Offering Student Loans in India

Here’s a detailed look at the best student loan banks in India for 2025, covering schemes, interest rates, eligibility, and more.

State Bank of India (SBI) Education Loans

SBI is a top choice for its variety of schemes and student-friendly terms.

• Eligibility: Indian nationals with confirmed admission to recognized institutes. Co-applicant (parent/guardian) required.
• Application Process: Apply online at sbi.co.in or via the Vidyalakshmi Portal. Submit KYC, academic records, and admission proof. Processing takes 15–30 days.
• Key Features:
  • 0.5% interest concession for female students.
  • Repayment tenure up to 15 years.
  • No prepayment penalty.
  • Covers tuition, books, travel, and equipment.

Punjab National Bank (PNB) – Vidya Lakshmi Scheme for Student Loans in India

PNB’s PNB Vidyalakshmi is a government-backed scheme for low-income students.

• Eligibility: Indian students with admission to NAAC/NBA-accredited institutes or CFTIs. Aadhaar mandatory for subsidies.
• Application Process: Apply through the Vidyalakshmi Portal. Upload KYC, income proof, and admission letter. Contact PNB at 1800-180-5555 for support. Processing takes 7–15 days.
• Key Features:
  • 3%–100% interest subsidy during moratorium for eligible students.
  • Covers tuition, hostel, and travel expenses.
  • Fast disbursal for approved courses.

ICICI Bank Education Loan

ICICI offers quick approvals and high loan amounts for both domestic and international studies.

• Eligibility: Indian nationals with confirmed admission. Co-applicant (parents/siblings/spouse) required.
• Application Process: Apply online or at ICICI branches. Submit academic records, KYC, and income proof. Use the EMI calculator on their website to plan repayments.
• Key Features:
  • 100% financing for select institutes.
  • Pre-visa disbursal for study abroad.
  • No foreclosure charges.

Axis Bank Education Loan

Axis Bank provides competitive loans with fast processing.

• Eligibility: Indian nationals with admission to career-oriented courses (e.g., medicine, engineering). Co-applicant required.
• Application Process: Apply online or at branches. Submit academic documents, KYC, and collateral papers (if applicable).
• Key Features:
  • Pre-admission sanction available.
  • No prepayment penalty.
  • Special forex services for study abroad.

Bank of Baroda (BoB) Education Loans

BoB offers tailored schemes for different educational needs.

• Eligibility: Indian nationals with confirmed admission. Co-applicant required.
• Application Process: Apply online at bankofbaroda.in or via Vidyalakshmi Portal. Submit KYC, academic records, and collateral documents (if needed).
• Key Features:
  • 0.5% concession for female students.
  • No collateral for loans up to ₹7.5 Lakhs under Baroda Gyan.
  • Repayment tenure up to 15 years.

Canara Bank Education Loans

Canara Bank offers affordable loans with government-backed subsidies.

• Eligibility: Indian nationals or NRIs with valid passports. Admission to recognized institutes required.
• Application Process: Apply online or at branches. Submit KYC, academic records, and income proof. Contact Canara Bank at 1800-1031 for grievances.
• Key Features:
  • Interest subsidy under CSIS for low-income students.
  • Fast-track loans for premier institutes.
  • No prepayment penalty.

Comparison of Best Student Loan Banks in India

Here’s a table comparing the best student loan banks in India for 2025:

Key Terms You Should Know

Understanding these terms will help you navigate loan agreements:

• Collateral: Assets like property, fixed deposits, or LIC policies pledged to secure the loan. Many banks offer education loans without collateral up to ₹7.5 Lakhs.
• Moratorium Period: The grace period (course duration + 6–12 months) before EMIs start.
• EMI (Equated Monthly Installment): Fixed monthly payments to repay the loan.
• Subsidy: Government support to reduce interest, like the CSIS scheme for low-income students.
• Co-applicant: A parent, guardian, or spouse who co-signs and is responsible for repayment.

Tax Benefits Under Section 80E for

Under Section 80E of the Income Tax Act, you can deduct the interest paid on a student loan in India from your taxable income. Key points:

• Eligibility: Loans for higher education (self, spouse, or children).
• Duration: Deduction available for up to 8 years or until interest is fully paid.
• Scope: Only interest (not principal) qualifies.

Example: If you pay ₹50,000 in interest annually, you can reduce your taxable income by that amount, saving on taxes.

Eligibility for Student Loans in India

To qualify for a student loan in India, you typically need to meet these criteria:

• Nationality: Indian citizen or NRI with a valid passport (for some banks).
• Admission: Confirmed admission to a recognized institute (India or abroad).
• Course: Graduate, postgraduate, or vocational courses (e.g., engineering, medicine, MBA).
• Co-applicant: Parent, guardian, or spouse with stable income or credit history.
• Age: Usually 16–35 years, though varies by bank.
• Academic Record: Good academic performance (some banks require minimum marks).

Note: For government schemes like PNB Vidyalakshmi, family income should be ₹4.5L–₹8L for subsidies.

Application Process for Student Loans

Applying for a student loan in India is straightforward if you follow these steps:

1. Research Banks: Compare SBI education loan, PNB Vidyalakshmi, ICICI, Axis, BoB, and Canara Bank based on interest rates and terms.
2. Check Eligibility: Ensure you meet the bank’s criteria (admission, co-applicant, etc.).
3. Gather Documents: Prepare KYC, academic records, admission proof, and income documents.
4. Apply Online: Use bank websites (e.g., sbi.co.in, icicibank.com) or the Vidyalakshmi Portal .
5. Submit Application: Upload documents and pay any processing fees (if applicable).
6. Verification: Banks verify your documents and may call for a discussion.
7. Loan Disbursal: Funds are sent directly to the institute or vendor. Processing takes 7–30 days.

Important Links:

• Vidyalakshmi Portal: vidyalakshmi.co.in
• SBI: sbi.co.in
• PNB: pnbindia.in
• ICICI: icicibank.com
• Axis: axisbank.com
• BoB: bankofbaroda.in
• Canara: canarabank.com

Documents Required

Here’s what you’ll need to apply:

• Identity Proof: Aadhaar, PAN, passport, or voter ID.
• Address Proof: Utility bill, rental agreement, or Aadhaar.
• Academic Documents: Class 10/12 marksheets, admission letter, course fee structure.
• Income Proof: Co-applicant’s salary slips, IT returns, or bank statements.
• Collateral Documents (if applicable): Property papers, FD certificates, or LIC policies.
• Others: 2 passport-size photos, loan application form.

Tip: Keep digital copies ready to speed up the process.

Tips for Choosing the Best Student Loan

1. Compare Interest Rates: Check student loan interest rates 2025 across banks. PNB’s 7.50% and SBI’s 7.15%–7.90% for premier institutes are among the lowest.
2. Opt for No-Collateral Loans: Choose education loans without collateral up to ₹7.5 Lakhs to avoid pledging assets.
3. Look for Concessions: Female students get a 0.5% discount with most banks.
4. Check Moratorium Periods: Ensure the repayment holiday suits your course duration.
5. Use EMI Calculators: Banks like SBI and ICICI offer online calculators to plan repayments.
6. Avoid Delays: Late EMIs hurt your credit score. Set reminders to pay on time.
7. Read Agreements: Understand terms like prepayment penalties or processing fees.

Government Schemes and Subsidies

The government supports students through these schemes:

• Central Sector Interest Subsidy (CSIS): Full interest subsidy during moratorium for families with income up to ₹4.5 Lakhs. Applies to technical/professional courses in NAAC/NBA-accredited institutes.
• PM Vidyalakshmi: Offers collateral-free loans up to ₹7.5 Lakhs for 860 premier institutes, with 3% interest subvention for incomes up to ₹8 Lakhs. Apply at vidyalakshmi.co.in.
• Dr. Ambedkar Interest Subsidy Scheme: For OBC/EBC students studying abroad.
• Padho Pardesh: Interest subsidy for minority communities studying abroad.
• Credit Guarantee Fund Scheme for Education Loans (CGFSEL): Guarantees loans up to ₹7.5 Lakhs without collateral or third-party guarantee.

Contact: For CSIS/PM Vidyalakshmi grievances, reach Canara Bank at 080-22533876 or hoel@canarabank.com.

FAQs About Student Loans in India

How long does loan approval take?
Approval takes 7–30 days, with private banks like ICICI (7–10 days) being faster than public banks like SBI (15–30 days).

What is a student loan in India?
A student loan is money borrowed from a bank to pay for education expenses like tuition, books, hostel, and travel, repaid after a moratorium period.

What expenses does a student loan cover?
It covers tuition fees, hostel charges, books, equipment, travel (for abroad studies), laptops, and sometimes uniforms or other course-related costs.

Can I get an education loan without collateral?
Yes, loans up to ₹7.5 Lakhs are often collateral-free under schemes like CGFSEL or PM Vidyalakshmi.

What are the student loan interest rates in 2025?
Rates range from 7.15% (SBI Scholar Loan) to 12.75% (Axis Bank), depending on the bank, course, and collateral.

Who can be a co-applicant for a student loan?
Parents, guardians, siblings, or spouses with a stable income or good credit score can be co-applicants.

How long is the repayment period for a student loan?
Up to 15 years after the moratorium period (course duration + 6–12 months).

Are there subsidies for low-income students?
Yes, schemes like CSIS and PM Vidyalakshmi offer 3%–100% interest subsidies for families with incomes up to ₹4.5L–₹8L.

Can I apply for a loan before admission?
Some banks like Axis and ICICI offer pre-admission sanctions, but final disbursal requires admission proof.

How do I apply for a student loan?
Apply online via bank websites (e.g., sbi.co.in, icicibank.com) or the Vidyalakshmi Portal with KYC, academic, and income documents.

What is the moratorium period?
It’s the grace period (course duration + 6–12 months) before you start paying EMIs.

Can I get a student loan for studying abroad?
Yes, schemes like SBI Global Ed-Vantage and ICICI’s abroad loan offer up to ₹3 Crore for international studies.

Do female students get any benefits?
Yes, most banks like SBI, BoB, and Canara offer a 0.5% interest rate concession for female students.

What is the Vidyalakshmi Portal?
It’s an online platform (vidyalakshmi.co.in) to apply for education loans from multiple banks and access government subsidies.

What happens if I miss an EMI payment?
Missing EMIs can lower your credit score, incur penalties, and affect future loan eligibility.

Can I prepay my student loan?
Yes, most banks like SBI, ICICI, and Axis allow prepayment without penalties, but check the loan agreement.

What documents are required for a student loan?
You need Aadhaar, PAN, marksheets, admission letter, income proof, and collateral documents (if applicable).

Can NRIs apply for student loans in India?
Yes, NRIs with valid passports can apply through banks like Canara or SBI, but terms may vary.

Are vocational courses eligible for student loans?
Yes, schemes like SBI Skill Loan and BoB’s Baroda Vidya cover vocational and skill-based courses.

What is the tax benefit under Section 80E?
You can deduct the interest paid on a student loan from your taxable income for up to 8 years.

Conclusion: Take the Next Step

A student loan in India is your ticket to a brighter future. Whether you’re eyeing an SBI education loan, PNB Vidyalakshmi, or options from ICICI, Axis, BoB, or Canara Bank, there’s a scheme for every dream. Compare the best student loan banks in India, check student loan interest rates 2025, and apply early to secure funding. Visit the Vidyalakshmi Portal or bank websites to start your application. Don’t let finances hold you back—your education is worth it! Got questions? Drop them below, and we’ll help you navigate your loan journey.