Latest Trends for Education Loans in 2025 That Students Should Know About

Education loans have become the tools that bridge the financial gap between students and their dream of studying in a well-recognized university. According to recent student loan debt statistics data by the Reserve Bank of India (RBI), the number of education loans offered by banks increased by 23% in the last year. This surge indicates the growing demand for education loans in India. Apart from this, the education loan sector in India has gone through many changes in the past year.

Students should be aware of the latest education loan trends and changes before applying for one. In this article, we will discuss the latest trends of education loans in India that you should know about while taking a student loan to fund your education.

Latest Education Loan Trends in India

The recent trends of education loans in India include:

1. Growing Demand for Education Loans

With the rising cost of education all over the world, the demand for education loans in India has rapidly increased in recent years. Education loans have become the primary source of funding for many students to pursue their higher education, especially for international studies. According to a recent report by the RBI, the total student loan debt in India has crossed ₹90,000 crores in the last year, indicating an annual growth rate of 15%.  

2. Increasing Popularity of Abroad Education

One of the major study loan trends in 2025 is the increasing popularity of education loans for abroad studies. Pursuing higher education from well-reputed foreign institutes has become very popular in recent years. Due to the high quality of education and diverse employment opportunities offered by studying overseas, the number of students going to foreign universities for education has significantly increased.

However, the cost of pursuing education abroad can get very expensive, considering the tuition fees, the living expenses, and other expenses associated with studying abroad. Hence, many students rely on education loans to fund their study abroad plans, increasing the demand for education loans for abroad studies in India. 

3. NBFCs and Fintech Companies

Applying for an education loan through major NBFCs and fintech companies has become a popular study loan trend in 2025. The rising demand for education loans has created opportunities for NBFCs and fintech companies in India. These companies revolutionized the education loan sector by adopting the latest technologies to automate the student loan process and increase the convenience of the students.

• Getting an education loan through these companies has become very popular because of their fast loan approvals and personalized solutions for individuals.
• These companies are known for providing transparent information and helping students in the loan process.
• The introduction of fintech companies in the education loan sector increased the efficiency of the student loan process, making them a popular option for education loans among students.
• NBFCs have become a popular option for securing a non-collateral education loan with high loan amounts and flexible terms.

4. Digitalization of the Loan Process

With the rising demand for student loans in India, many lenders have digitized their education loan application process. This is one of the major trends of education loans in India that most lenders have integrated into their loan process. Students can now apply for an education loan simply by visiting the website of most lenders. This minimizes the effort and time for both students and lenders. Students can also submit the basic documents through the website of the lenders.

This also enables the lenders to fulfill the needs and requirements of students from various regions. It can also help lenders to easily assess the student profile, including their academic history, credit score, and co-applicant eligibility, ultimately leading to faster loan approvals. 

5. Specialized Education Loan Schemes

Lenders started offering specialized education loan schemes to meet the diverse needs and requirements of the students. They prioritize STEM courses, i.e., Science, Technology, Engineering, and Mathematics, and Master’s courses while offering education loans. These courses often offer a higher salary and employability opportunities, reducing the risk of loan default.

Lenders offer better loan terms, such as higher loan amounts, lower interest rates, moratorium period, and repayment terms, for STEM and Master’s courses. They believe that students pursuing these courses have a high chance of repaying the loan.

6. Covers a Wide Range of Expenses

Pursuing education from a university abroad can be quite expensive, considering the tuition fees, living expenses, and other course-related expenses. Abroad education loans are specifically designed to cover the expenses associated with studying in a foreign university. Hence, banks started offering education loans with wide coverage of expenses.

Education loans help students cover the entire education cost, including:

• Tuition fees, 
• Living expenses, 
• Purchase of course-related expenses, 
• Purchase of a laptop, 
• And course-related equipment.

7. Utilizing Scholarships and Government Schemes

This has become another popular study loan trend in 2025. The government of India provides various schemes on student loans to make education more affordable for students. The Central Sector Interest Subsidy Scheme (CSIS) and Dr. Ambedkar Scheme of Interest Subsidy offer a subsidy on the interest of education loans upon meeting the eligibility criteria.  

Apart from these government schemes, students also use partial scholarships along with an education loan to cover a part of the principal amount and reduce the overall education loan cost. Many students utilize these government schemes and scholarships along with student loans to reduce the overall repayment cost of the education loan.

Latest Education Loan Updates

Now that we have understood the latest student loan trends in 2025, let’s look at the key changes in the education loan sector in the past year:

1. Reduction  in Tax Collected at Source (TCS)

   As of April 1st, 2025, the government of India has reduced the Tax Collected at Source (TCS) on education loans from 0.5% to 0%. This means that there will be no TCS charged on education loan funds transferred to cover the expenses of the students while studying abroad. However, for any other source, the TCS remains to be 5%. 

2. Unsecured Education Loan from SBI

   The State Bank of India has recently started offering unsecured education loans under its Global Ed-Vantage scheme. Students can now get a non-collateral education loan from SBI, upon meeting the eligibility criteria for the loan.

3. GIC Requirement for Canada

   Earlier, students needed to create a GIC to secure a Canadian student visa. But, as of 8th November, 2024, GIC is no longer necessarily required to study in Canada. However, providing proof of funds for living expenses is still mandatory to acquire a Canadian study visa.

Conclusion

The demand for education loans in India has significantly increased in the last decade. Many students use education loans as a primary source of funding for both domestic and international studies. This growing demand for education loans has created an opportunity for NBFCs and fintech companies in India. They revolutionised the education loan sector in India, offering fast approvals and personalised solutions to individuals. Students need to be aware of the latest education loan trends and updates while planning to take an education loan for their studies.

This article covers the latest education loan trends that can help students when applying for a student loan. WeMakeScholars has also covered the information about the recent changes in the education loan sector to help you make an informed decision while taking an education loan.