Higher education is getting expensive, both in India and abroad. But here’s the truth: a well-chosen student loan can be the difference between chasing your dream course or giving it up because of money worries.
The right education loan not only funds your degree but also helps you build your credit profile early, manage repayments smartly, and avoid debt traps. In 2025, with multiple banks, NBFCs, and government-backed schemes competing, students (and parents) have more options than ever.
So, which is the best loan for students in India in 2025? Let’s break it down.
1. Education Loan Landscape in India – 2025 Snapshot
Before choosing a lender, here’s what’s trending this year:
- Loan Amounts: Up to ₹10–15 lakh for domestic courses; ₹30–60 lakh for international studies.
- Interest Rates: 8.25% to 13.5%, depending on lender & course.
- Repayment Moratorium: 6–12 months post-course completion.
- Tax Benefits: Section 80E allows tax deduction on loan interest.
- Credit Impact: Timely repayment = strong credit history from a young age.
👉 Lesson: Treat your student loan like a starter credit line. Repay responsibly, and you’re setting up for a higher credit score when you later apply for home loans or credit cards.
2. Best Banks for Education Loans in 2025
🔹 State Bank of India (SBI Student Loan)
- Loan: Up to ₹30 lakh (India) and ₹1.5 crore (abroad).
- Interest Rate: ~9.25% with concessions for female students.
- Repayment: 15 years after course completion.
- No collateral needed up to ₹7.5 lakh.
💡 Best for: Students seeking a trusted PSU bank with nationwide support and fair terms.
🔹 HDFC Credila (Private NBFC Arm)
- Customised loans for abroad study.
- Loan up to ₹50–60 lakh.
- Interest: ~11–13%.
- Covers tuition + living expenses.
💡 Best for: Students going abroad, especially those with high living costs (US, UK, Canada).
🔹 ICICI Bank Education Loan
- Loan amount: Up to ₹40 lakh (domestic) and ₹1 crore (abroad).
- Interest: 9.5–11.5%.
- Flexible repayment up to 10 years.
- Pre-approved loan for select universities.
💡 Best for: Students with top-tier admits needing quick approval.
🔹 Axis Bank Student Loan
- Up to ₹75 lakh.
- Interest rate: ~10–12.5%.
- EMI holiday of course period + 1 year.
- Can cover GRE/GMAT prep expenses.
💡 Best for: Students preparing for competitive exams and foreign universities.
🔹 Punjab National Bank (PNB Udaan)
- Special scheme for studying abroad.
- Loan up to ₹1 crore.
- Interest rate: ~9–10%.
- Moratorium: Course + 1 year.
💡 Best for: Middle-class families looking for lower interest on foreign study loans.
3. Government Schemes – Don’t Miss These
Apart from banks, government-backed schemes offer low-cost loans for students:
- Vidya Lakshmi Portal – One-stop platform to apply for 40+ banks’ education loans.
- Padho Pardesh Scheme – Subsidy for overseas education (for minority communities).
- Dr. Ambedkar Central Sector Scheme – Interest subsidy for OBC/EWS students.
- PM Vidya Loan Guarantee Scheme – No collateral up to ₹7.5 lakh.
👉 These schemes are lifelines for students from modest backgrounds, and worth exploring before private banks.
4. Interest Rate Comparison – 2025
| Bank / Scheme | Loan Limit (Abroad) | Interest (p.a.) | Collateral-Free Limit | Repayment Tenure |
|---|---|---|---|---|
| SBI Student Loan | ₹1.5 crore | 9.25% | ₹7.5 lakh | 15 years |
| HDFC Credila | ₹60 lakh | 11–13% | ₹4–5 lakh | 12 years |
| ICICI Bank | ₹1 crore | 9.5–11.5% | ₹7.5 lakh | 10 years |
| Axis Bank | ₹75 lakh | 10–12.5% | ₹4 lakh | 12 years |
| PNB Udaan | ₹1 crore | 9–10% | ₹7.5 lakh | 15 years |
5. Domestic vs. Abroad – Which Loan Should You Choose?
- Domestic Courses (IITs, IIMs, AIIMS, private universities): PSU banks like SBI/PNB are cheaper and easier.
- Abroad Studies (US, UK, Canada, Australia): Private lenders like HDFC Credila or ICICI offer higher ticket size + fast approvals, but at higher interest.
👉 Rule of Thumb: If your loan is under ₹20 lakh → PSU banks; Above ₹30 lakh abroad → Private/NBFCs.
6. Hidden Costs Students Often Miss
- Processing fees: 0.5%–2% of loan amount.
- Forex markup (if abroad loan).
- Insurance on loan (some lenders bundle this).
- Prepayment penalties (check before signing).
💡 Tip: Always ask for a total cost of borrowing sheet—not just “interest rate.”
7. Smart Repayment Strategies (Protect Your Credit Score)
- Start paying interest during moratorium (if possible) → reduces total burden.
- Set up auto-debit EMIs to avoid missed payments.
- Part-pay early (bonus, side income) to save on compound interest.
- Track your CIBIL score—timely repayments boost your future credit card/loan eligibility.
👉 Internal Link Idea: “Learn how EMIs affect your credit score in our guide on BoostCreditScore.in.”
8. Case Study: Riya’s Abroad Dream
Riya, an engineering student from Delhi, got into a Master’s program in the US.
- SBI offered her ₹30 lakh at 9.25%.
- HDFC Credila offered ₹40 lakh at 11.5%.
She needed ₹35 lakh. So, she took ₹30 lakh from SBI + ₹5 lakh personal contribution, avoiding the higher-cost loan. Result? She saved ₹3–4 lakh in interest over 10 years.
Conclusion & Action Plan
Education loans in India have never been more flexible. Whether you’re targeting IIT Delhi, IIM Bangalore, or Stanford, the right choice boils down to:
- SBI/PNB if you want low rates + PSU trust.
- ICICI/Axis if you need bigger amounts with faster approval.
- HDFC Credila if you’re set on expensive global courses.
- Govt schemes if you want subsidies and collateral-free support.
✅ Action Steps for Students 2025:
- Check eligibility on Vidya Lakshmi portal.
- Compare 3 banks before signing.
- Clarify processing fees + insurance.
- Plan repayment early—protect your credit score.
With smart planning, your education loan becomes not just a financial support, but your first step toward a strong financial future.
