Personal Loan for Student

Personal Loan for Students

“An investment in knowledge pays the best interest.” — Benjamin Franklin. Quality education is important for a good and successful life yet expensive in the current age. To avail a high quality education usually needs a good amount of money. And, understanding this need of students, various financial institutions have come up with varied easy-to-avail education loans for students. As in case of personal loans for students in India, it is different from education loan. A personal loan depends on the borrower and can also be taken for a family member. An education loan might fund a part but, personal loan can fund 100% of the expenses.

What is a student loan? Why one should take student loan?

A student loan is generally a loan taken for post-graduation studies and associated fees like tuition, books and living expenses. These loans are different from other loans in the manner because of its low interest rates and deferred payment schedules where the payment doesn’t start while the student is still in college. Student loans generally include tuition and course fee, caution deposit, examination fees, library and laboratory fees and the cost of books, equipment and other study-related materials. Some student loan schemes also include travel expenses for abroad studies, study tours and a cost of a two-wheeler.

What is the interest rate for students personal loan?

Personal student loan rates start from somewhere around 11 %. The rates are usually lower for staff of the financial institutions and employees of reputed organisations. The interest rates are higher for self-employed individuals.

Given below is an example of one of the personal loan rates of SBI

(SBI Student Loan Scheme):


Loan Limit Effective Interest Rate Reset Period
Upto 7.5 lakhs 10.55% 1 Year
Above 7.5 lakhs 10.80% 1 Year
0.50% concession for girl students is available

Eligibility for student loan

Financial institutions in India have got flexible in their procedures for student loans. These are aimed to be granted with lowest of complexities.

Some basic criteria for availing a student loan are listed below:

  1. The candidate must be a resident of India.
  2. A confirmed admission letter must be present from a recognised university of India or abroad.
  3. The applicant should have an admission in an university affiliated by UGC/AICTE/Govt. etc.
  4. The age of the candidate must be within 18-35.
  5. The candidate should have a good academic record in most cases.
  6. He/she must be undergoing  a valid graduate, post-graduate degree or a PG Diploma.
  7. Security demanded is usually a guarantor or tangible collateral depending on the loan amount and source of income.

Loan amount

The loan amount depends on the student’s need and financial condition. It also depends on the fees and costs involved in the educational course. An education loan for skill based courses and expenses, a candidate can avail as low as an amount of Rs. 5000. The maximum limit can reach 1.5 crores too depending on the circumstances. A personal loan can be taken just for travel expenses or relocation even if the cost of course is covered by the student.

For example, SBI offers a loan amount of a maximum Rs. 10 lacs for studies in India and a maximum of Rs. 20 lacs for studies abroad.

* Maximum loan limit for studies in India is based on case-to-case basis.

* SBI Global Ed-Vantage Scheme is considered for higher loan limit for studies abroad.

Tenure (Min to Max)

For personal loans in India, the tenure may vary from 12 months to 60 months depending on the loan type. HDFC offers tenure of 12-60 months with an EMI of as low as about 2 k Rs per month. Student loans have a different tenure.


The documents required by various financial institutions differ, however, the basic ones are listed below:

For a Student-applicant:

  1. Proof of Identity (Any one): Driver’s License/ Voter ID card/ PAN/ Passport
  2. Proof of Residence/ Address (Any one): Electricity Bill/Water Bill/ copy of Passport/ Driving License/ Aadhaar Card/ Recent copy of Telephone Bill/ Piped Gas Bill
  3. Passport: Mandatory to be submitted for Studies Abroad
  4. Academic Record Documents: 10th Result, 12th Result, Graduation Result- Semester-wise (if applicable), Entrance Exam Result through which admission is being taken (GMAT, GRE, TOEFL, JEE, NEET, CET, CAT, CMAT, etc.)
  5. Proof of admission: Official Admission Letter or Offer Letter from the Institution.
  6. Statement of study expenses and costs
  7. Passport-size photographs -2
  8. Any previous loan statements from any other banks/lenders.

For a co-applicant::

Proof of Identity (Any one): Driver’s License/ Voter ID card/ PAN/ Passport

  1. Proof of Residence/ Address (Any one): Electricity Bill/Water Bill/ copy of Passport/ Driving License/ Aadhaar Card/ Recent copy of Telephone Bill/ Piped Gas Bill
  2. Passport-size photographs -2
  3. Any previous loan statements from any other banks/lenders.
  4. Income Proof for Guarantor or Salaried Co-applicant such as  Bank account statement for last 6 months (of Salary Account), copy of IT Returns for last 2 financial years, copy of Form 16 for last 2 years, Salary Certificate of last 3 months or Salary Slips.
  5. Income Proof for Guarantor or Self-Employed include Bank account statement for last 6 months or Certificate of qualification, IT returns for last 2 years or Business address proof.

Note: All the documents must be self-attested.

Is personal loan different from student loan and education loan different from student loan.

Education loan is a loan for the costs and fees of the educational course involved. It can vary from a minimum of 5000 Rs to 1.5 crores Rs depending on the course. Some skilled based courses demand a low amount and that can be availed from banks and other financial institutions.

Student loan may or not may not be guided by government rules of education and can be provided by various private lenders. The repayment schedules and tenure of such loans may vary from that of education loan.

On the other hand, personal loan depends on the borrower or the guarantor. It can be taken by parents or can cover other family expenses for the student such as relocation expenses, travel expenses, etc.

Interest rates for education loans are generally lower and easy to get for a student even with low or no security as compared to personal loans.

What is education loan and what all courses covered under education loan or student loan

  • Courses offered by recognized universities in India and abroad and listed under ll courses listed here- , and are eligible for education or student loans.
  • Professional courses including B.A/B.Com/M.A/M.Com/MCA/MCM etc., Engineering and Medicine, Management courses (both full time and part time), ICWA, CA, CFA etc., Courses by IIMs, IITs, IISc, XLRI. NIFT,NID etc., Distance learning programs and online certifications, studies such as SAP , ERP , GNIIT , Air Hostess Training programmes, Architecture, Agriculture studies, Fine Arts and Designing, Hotel and Hospitality courses, degree/Diploma courses like Aeronautical, pilot training, shipping, etc.,, courses by reputed institutes that assure employment and are Govt. certified and others in India by reputed and certified foreign universities are all applicable for loans in India.

Student loan schemes and details from SBI, HDFC, ICICI.

SBI Loan Schemes include term loan granted to the citizens of India for pursuing higher education in India or abroad. The courses covered include courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. Etc, regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc and training and professional courses by reputed organisations and so on in India and abroad. The expenses covered include the normal course, hostel and examination fees and related fees. It also includes cost of a Two-wheeler upto Rs. 50,000. The maximum loan amount by SBI in India is 10 lakhs and 20 lakhs for abroad however, it depends on every case and regulatory guidelines for abroad studies.

HDFC student loan apply online feature helps you apply for a loan from practically anywhere.

Some features of HDFC education loans include an age limit of 16-35, loan amount with unsecured loans up to Rs.7.5 lakhs and secured loans up to Rs.10 lakhs, choice of collateral where HDFC offers a range of options such as Residential Property, LIC Policy or HDFC Bank Fixed Deposit, etc. It also has a processing fee of as low as 1% of the loan amount.

ICICI offers education loans for both undergraduate and postgraduate courses with loans up to Rs 50 lakh in India and up to Rs 1 crore for overseas.

FAQs about Student loan.


Can I get an education loan at the age of 40?

It depends on the financial institution. Some do not have any age restrictions. But, many have an age limit of 18-35 for availing an education loan.

Does education loan have tax benefits?

Education loans do not provide tax benefits immediately. But, there is exempt on taxes for the interest accrued while repayment.

When should I take personal loan and when education loan?

Education loan is taken for the course and course-related fees while personal loan can be taken for other expenses if you have a good guarantee or some financial security.

What are the things to look for in a financial institution while applying for an education loan?

While applying for an education loan, check the repayment schedule, tenure, interest rates, processing fees, etc. to avail the best loan.

What are the criteria for applying for a student loan online?

The criteria and documents for applying for a student loan online remains the same as above.

What are the other expenses covered by education loan?


Books, equipment, examination fees, laboratory fees, instruments, building fund, caution deposit, hostel fees, etc. are included in the expenses.


How does the Financial Institution track my progress academically during the course?

The applicant must submit progress reports or mark sheets periodically. All documents must be duly signed by a college authority.


Student loan is a much needed one for those who look for higher education and who aim for a great career. We are here to help you out.



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