Education loan

• Tuition and university fees for the full course
• Living costs, including accommodation and food, as assessed by the lender
• Travel costs, usually an economy airfare
• Health insurance required by the university or visa
• Books, equipment and a laptop where needed for the course
• Visa fees, deposits and sometimes caution money

A secured loan is backed by collateral, such as a residential property, a flat, a fixed deposit or an insurance policy. Because the lender's risk is lower, secured loans usually carry lower interest rates and allow higher amounts. Public sector banks generally ask for collateral on larger loans; under the model scheme many of them follow, loans above ₹7.5 lakh typically need tangible security, while smaller loans may need only a guarantor or a co-borrower.

An unsecured loan has no collateral. It is offered mainly by NBFCs, private banks and some international lenders, based on the university, the course, your academic record and your co-applicant's income. Unsecured loans can be sanctioned faster and for strong admits can run into several tens of lakhs, but interest rates and processing fees are usually higher.

• Public sector banks: usually the lowest rates for secured loans, with longer processing times and more paperwork
• Private sector banks: faster processing, secured and some unsecured options
• NBFCs specialising in education: flexible on collateral, quicker sanction, generally higher rates
• International lenders: some lend without an Indian co-applicant or collateral for selected universities and courses, often in foreign currency

• Interest rate, and whether it is fixed or floating and linked to a benchmark such as the repo rate
• Processing fee, and whether it is refundable if you do not take the loan
• Margin money: the share of costs you must fund yourself, often 5 to 15 per cent for study abroad
• Moratorium period: usually the course length plus six to twelve months before repayments begin
• Whether simple interest must be paid during the moratorium
• Repayment tenure, often up to 10 to 15 years
• Prepayment and foreclosure charges
• Disbursement schedule and whether funds go directly to the university

Interest paid on an education loan from a bank or approved financial institution can be deducted from taxable income under Section 80E of the Income-tax Act, 1961, carried into the Income-tax Act, 2025. There is no upper limit on the interest amount. The deduction can be claimed for up to eight years from the year repayment starts, by the person who repays the loan: the student, or a parent or spouse who has taken the loan for them.

The deduction applies only to interest, not principal, and is available under the old tax regime, not the new default regime. Confirm your position with a chartered accountant.

When money for education is sent abroad from a loan taken from a specified financial institution, no tax is collected at source (TCS). This makes a loan-funded remittance simpler than sending the same amount from savings, where TCS may apply above the yearly threshold. See our money transfer guide for the current rates.

• Offer letter and fee structure from the university
• Student's academic records and English or aptitude test scores
• KYC for student and co-applicant: PAN, Aadhaar and passport
• Co-applicant's income proof: salary slips, Form 16 or income tax returns for two to three years
• Bank statements for six to twelve months
• Collateral documents, such as title deeds and a valuation report, for secured loans

Moksh has no tie-ups with any lender and earns nothing from your loan. We help you estimate how much you need, prepare the document set, and compare offers from banks and NBFCs on the same terms. You choose the lender and sign directly with them.