Education Loan

Know about everything starting from the basics of an Education Loan, The process, and Types of Education Loans, etc.

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Table of content

  1. What Is An Education Loan?
  2. Secured vs Unsecured Education Loans
  3. Comparing Education Loans from Different Banks & NBFC
  4. Top 4 Education Loan NBFCs in India
  5. How to Apply for an Education Loan Online?
  6. Documents Needed to Apply for an Education Loan
  7. How to Calculate EMI for Education Loans?
  8. Education Loan Repayment
  9. Education Loan Eligibility
  10. CIBIL Score for An Education Loan
  11. Education Loan Eligible Courses
  12. Education Loan Fees & Charges
  13. Expenses Covered in Education Loan
  14. Types Of Collateral For An Education Loan
  15. Features and Benefits of an Education Loan
  16. Tax Benefits on Education Loan
  17. Education Loan Subsidy Schemes
  18. Tips To Manage Your Education Loan
  19. Education Loan Customer Care Numbers
  20. FAQ's
  21. Need Help? Ask Here!

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What Is An Education Loan?

Education loans are offered to students to finance their higher education in India and Abroad. Multiple financial institutions like Public sector banks, Private banks, and NBFCs offer education loans to students.

  • The funds provided by the education loan will cover the tuition fees, living expenses, cost of books and supplies, etc. 
  • A loan amount between 1 lac to 1.5 cr can be offered with interest rates starting from 8.15% (latest ROI).
  • The general education loan process includes searching for a lender, applying for an education loan, getting your loan sanctioned, disbursement of the amount, and the repayment of your education loan
  • The repayment of education loans starts after the moratorium period in all banks. A moratorium period of around 6 months to 1 year is offered by banks on taking an education loan. 

Moratorium period = Course duration + 6 months/ 1 year (grace period)

Education Loans can primarily be divided into 2 types:

  • Secured Education Loan 
  • Unsecured Education Loan

The loan terms offered by banks further depend on the location (overseas, domestic), and course (undergraduate, postgraduate) the student opts for. These factors decide the Loan amount, interest rate, Moratorium period, and Repayment duration. 

To know clearly about each of these aspects, keep on reading and comment if you have any further queries. 

Secured vs Unsecured Education Loans

What is a Collateral?

Collateral is any form of asset/ property that you pledge to the bank to get your loan. A collateral acts as a security to the bank in case you are unable to repay your loan for any reason. 

1. Secured or Collateralized Education loan

A Secured or Collateralized Education Loan is an education loan where you have to pledge collateral (an asset or security) such as a house or land to receive the loan amount.

The collateral accepted by lenders is of two types:

  • Immovable property: House, flat, or non-agricultural land.
  • Liquid security: Fixed deposits, Insurance policies (term insurance), or Government bonds.

 2. Unsecured or Collateral- free Education Loan

  • An Unsecured or Collateral-free education loan is an education loan where the student can take an education loan without having to offer any security or collateral. 

Comparison of Secured vs Unsecured Education Loan 

Here is the comparison table of various parameters of collateral requirement, loan amount, processing fee, rate of interest, moratorium period, and eligibility criteria 

Parameter

Secured Education Loan  Unsecured Education Loan
Collateral requirement Required minimum of 50% of the loan amount Not required
Loan Amount
  • Up to 1 Cr for India
  • Up to 1.5 Cr for Abroad 
    (Depends on the collateral evaluation)
  • Up to 50 lacs for India
  • Up to 1 Cr for Abroad
Processing fee Zero to max 10,000 rupees + GST 0.75% to 1.5% of the Loan amount
Rate of interest 8.15% to 10.5% 10.5% to 12.5%
Moratorium period
  • Course duration + 6 months
  • No payments are required in the moratorium
  • Course duration + 12 months
  • Partial interest or full simple interest may be asked during the moratorium
Key parameters for loan eligibility
  • Collateral legal and evaluation
  • Student’s profile
  • Parent’s income
  • Student’s profile 
  • Government banks are the best option to go for in case you are trying for a secured education loan and they offer very good interest rates and flexible repayment conditions. They also offer unsecured education loans of up to 7.5 Lakhs under the CGFSEL Scheme
  • Private banks and NBFCs are the best when it comes to an unsecured education loan as they offer a higher loan amount than government banks considering that there is no collateral involved. 

Comparing Education Loans from Different Banks & NBFC

*Note: These interest rates are effective as of Jan 2024. The student loan interest rates may change with changes in RBI repo rate and bank policies.

(Keep in mind that these are the applicable interest rates on going through your education loan with WeMakeScholars, which can vary on a case-by-case basis)

Banks Interest rate Processing fees Loan Amount
State Bank of India (SBI) Starts from 8.15% Rs.10,000 + GST
  • Without collateral: 7.5 lacs
    Higher amounts possible for top universities in India
  • With collateral: Up to 1.5 Cr
Bank of Baroda (BOB) Starts from 8.55% Rs.10,000 + GST or 1% of the loan amount whichever is lower
  • Without collateral: 7.5 lacs
    Higher amounts possible for top universities in India
  • With collateral: Up to 1.5 Cr
Canara Bank Starts from 8.60% Rs. 10,000 + GST
  • Without collateral: 7.5 lacs
    Higher amounts possible for top universities in India
  • With collateral: Up to 100% of the loan amount
ICICI Bank  Starts from 10.85% 1 - 2% of the loan amount 
  • Without collateral: 7.5 lacs
  • With collateral: Upto 1.5 Cr
HDFC Credila Starts from 10% 1 - 1.5% of loan amount + GST
  • Without collateral: 50 lacs
  • With collateral: Up to 1 Cr
Axis Bank Starts from 9.99% 1% PF Loan amount + GST
  • Without collateral: 40 lacs
  • With collateral: Up to 1 Cr
Karur Vysya Bank Starts from 9.99% Rs. 10,000 + GST
  • Without collateral: 7.5 lacs
    Higher amounts possible for top universities in India
  • With collateral: Up to 1.5 Cr
Avanse Starts from 11% 1 - 1.5% of loan amount + GST
  • Without collateral: 80 lacs
  • With collateral: Up to 1 Cr

Top 4 Education Loan NBFCs in India

HDFC Credila:

  • Up to 100% finance of i20 value
  • Option of 100% collateral-free student loan
  • Sanction before admission for i20
  • Doorstep service

Avanse:

  • 100% education finance
  • There is no limit to the maximum amount
  • Sanction within 1 day after logging the file
  • Prefers meritorious students
  • Can disburse in 1 installment
  • Doorstep service

Incred:

  • Accepts multi-city co-signers
  • Can cover all the expenses of a student
  • All charges are included in InCred's origination fees
  • Can provide pre-visa disbursal if the situation demands
  • Doorstep service

Auxilo:

  • 1% processing fees
  • 100% Finance
  • Pre-admission student loan
  • Pre-Visa study loan disbursement
  • Fast-track student loan
  • Competitive interest rates

Other NBFCs offering study loans are Aditya Birla Capital, Tata Capital, Bajaj Finserv

Read More

How to Apply for an Education Loan Online?

Let’s go through the application process for an education loan.

Online:

It is possible to start your study loan process online for all Govt. banks, private banks, and NBFCs.

The steps are as below:

  • Step 1: Fill out the WMS Student Loan Common Application form or request a callback 
  • Step 2: You will receive a call from your financial officer, to check your eligibility. Provide all the required information.
  • Step 3: Compare and choose your lender bank from all the lender options as per your eligibility and education loan policies.
  • Step 4: Submit your documents in the bank or upload your documents on the WeMakeScholars secure document portal, as per the documents checklist shared by your financial officer
  • Step 5: After document submission, your file will be logged in. You will receive a decision within 2-6 days for Private banks like Axis, and ICICI and within 15-20 days for Govt. banks.
  • Step 6: After the sanction, you can sign the education loan agreement and collect your sanction letter.

Offline:

If you want to apply for an education loan offline, then you can visit the nearest bank branch and speak to the bank manager.

Maximize your chances of approval - apply for your education loan through WMS and get the support you need.

Documents Needed to Apply for an Education Loan

Section 1: Study Loan Application form 

Bank Application form with 2 passport-size photographs (online copy generated by WeMakeScholars is acceptable)

Section 2: Basic documents for Applicant (student) and co-applicant and/or Guarantor

  1. Proof of identity –PAN Card (and Passport of the student if going abroad)
  2. Proof of Residence – Voter ID Card/  Passport/ Electricity Bill/ Telephone Bill/ Ration card/ Bank account statement/ Aadhar. (2 different proofs if current and permanent residence are different)
  3. Bank account statement for the last 6 months (Personal/ Salary). For co-applicants, it should show the salary credits if salaried or 1-year business transactions if self-employed.
  4. Personal Asset & Liability Statement (assessed by the branch professional)
  5. All the documents should be self-attested.

Section 3: Academic Documents for Applicant

  1. Education mark sheets and certificates- 10th, 12th, Degree
  2. Proof of admission for the course (should be evidencing total duration of the course)
  3. Fee structure
  4. Entrance exam scorecard

Section 4: Income Documents for Co-applicant

If Salaried

  1. Latest Salary slips (for the last 3 months)
  2. Form 16 of the last 2 years.
  3. Employers ID card
  4. ITR of last 2 yrs

If Self-employed

  1. ITR of last 3 yrs
  2. Last 3 years' Balance sheet and Profit & Loss account (only if self-employed)
  3. Proof of Business address

Section 5: Other Documents

  1. Letter stating that leftover expenses, apart from loan amount will be borne by the co-applicant (Format to be provided by WeMakeScholars Financial officer)
  2. Notarised joint affidavit with the student and co-applicant in the Bank’s standard format (Format to be provided by WeMakeScholars Financial officer)

Section 6: Additional docs (if applicable)

  1. Receipts of advance payments made if any.
  2. All loan account statements (1 year) if any pending loans.
  3. Letter explaining the gap if the students had a failure/break in studies on Rs. 100 stamp paper. (Format to be provided by WeMakeScholars Financial officer)

Section 7: Collateral Documents (Optional)

It is only applicable for collateralized study loans. The list of documents for each state is different. 

When you process your student loan with WeMakeScholars, your financial officer will provide you with a detailed documents checklist, after analyzing your profile.

How to Calculate EMI for Education Loans?

Types of Interest Rates

Let's understand simple interest and compound interest before learning how to calculate education loan EMI:

Simple interest: It is the interest rate calculated on the original principal loan amount taken by the applicant 

Formula: (P × T × R) ⁄ 100

Compound interest: It is the interest rate calculated on the principal loan amount taken by the applicant in addition to the interest accumulated over time.

Formula: P(1+R⁄100)^T − P

Where,
P= Principal amount
R= Rate of Interest
T= Time

Note: For public banks, it is not required for students to pay simple interest in the moratorium period but, private banks may ask for interest payments during this period.
After the Moratorium period ends, students will have to pay the previously calculated EMI to repay their outstanding loan within the repayment period.

Example:

Let’s assume that you have taken a loan of Rs. 15 lakhs for a course period of 24 months. The interest rate is 10.50% per annum and the moratorium period is 12 months. You will not be paying during the study + moratorium period. With a loan tenure of 12 years

Here is how you can calculate the EMI:

Calculate the EMI using the following formula:

EMI = [P x R x (1+R)N]/[(1+R)N-1]

Where,

  • P = Principal amount (loan amount)
  • R = Rate of interest (monthly)
  • N = Tenure (in months)
  • Monthly interest rate = Annual interest rate / 12

Monthly interest rate = 10.5 / 100/ 12 = 0.00875%

EMI = [15,00,000 x 0.00875% x (1+0.00875%)36]/[(1+0.00875%)144-1]

EMI = Rs. 18,362

You can also use our EMI calculator to calculate the EMI for your education loan 

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Education Loan Repayment

Repayment Table

For instance, if you take a student loan of say Rs 40 lacs to pursue higher education at a 9% rate of interest, for a duration of say suppose 15 years, then your EMI repayment schedule will look like this:

  Repayment Cycle

EMI

Interest portion

Principal portion

Loan Outstanding

Start of loan EMI

45135

33375

11760

4438240

End of year 1

45135

32368

12767

4302912

End of Year 2

45135

31170

13965

4142027

End of Year 3

45135

29860

15275

3966050

End of Year 4

45135

28427

16708

3773564

End of Year 5

45135

26860

18275

3563022

End of Year 6

45135

25145

19989

3332730

End of Year 7

45135

23270

21865

3080835

End of Year 8

45135

21219

23916

2805311

End of Year 9

45135

18976

26159

2503940

End of Year 10

45135

16522

28613

2174299

End of Year 11

45135

13838

31297

1813735

End of Year 12

45135

10902

34233

1419347

End of Year 13

45135

7691

37444

987964

End of Year 14

45135

4178

40957

516113

End of Year 15

45135

336

44799

0

 

Pro tip: EMI will be auto-debited from your account after your moratorium period that is course duration plus grace period is over. You may also use Internet banking or Cheque to pay your EMI. So make sure there is sufficient balance in your account and plan your repayment wisely.

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Education Loan Eligibility

In the sections below you can check the applicant and co-applicant eligibility, CIBIL requirements with the acceptable universities and courses:
Applicant:

  • The applicant must be an Indian citizen residing in India or NRI.
  • Overseas Citizens of India (OCI) and Persons of Indian Origin (PIOs) are eligible for student loans to study in India but not for overseas education.

Co-applicant:

  • The co-applicant must also be an Indian citizen residing in India or NRI.
  • Overseas Citizens of India (OCI) and Persons of Indian Origin (PIOs) are eligible for education loans to study in India but not for overseas education.
  • Applicants must have any of their parents/ parent-in-law/ siblings/ spouse as their co-applicants while applying for a student loan

University and course:

  • The applicant should have an admission letter from a recognized School abroad or in India.
  • The applicant must have opted for a full-time or part-time UG/PG program.
  • An exceptional academic record is always beneficial for the process.

What Will Improve My Eligibility for an Education Loan?

Banks carefully assess students' eligibility for financial aid to make sure they qualify. They consider factors like a strong academic record, admission to a reputable university, the financial stability of parents or guardians, potential for future employment, and income generation also play a role in making a student eligible.

Note: However, the specific eligibility depends on your bank and the scheme, under which you are taking the education loan. There is always a possibility of deviation from the usual process.

CIBIL Score for An Education Loan

Credit score or CIBIL score is the measure of the financial credibility of any individual. A person with a good CIBIL score has a greater chance of getting a student loan faster. 

What is a good CIBIL score? 

  • 300-599:
    If your credit score is in the range of 300-590 it is not possible to get an education loan from any other bank except SBI. It would be better to improve your credit score before applying for an education loan.

  • 600-749:
    For credit scores between 600-749, you might qualify for a student loan. However, be aware that the lender could charge a higher interest rate or offer a shorter repayment period.

  • 750 and above:
    A credit score of 750 and above is highly favorable and can lead to instant loan approval with loan terms beneficial to the applicant.

Below are the minimum CIBIL scores accepted by Govt. Banks, Pvt. Banks and NBFCs 

  • State Bank of India (SBI): 591
  • Other Govt. Banks: 685
  • Pvt. banks/NBFCs: 685

Request a callback from your financial officer at WeMakeScholars, to find a way to process your Student loan despite a lower CIBIL score.

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Education Loan Eligible Courses

Here is the List of Course Eligible for an Education Loan:

Graduation courses:

  • BA
  • B.Com
  • B.Sc., etc

Post Graduation courses:

  • Masters
  • Ph.D.

Professional courses:

  • Engineering
  • Medical
  • Agriculture
  • Veterinary
  • Law
  • Dental
  • Management
  • Architecture
  • Computer, etc.

Management courses:

  • Hotel Mgt
  • Hospitality Mgt
  • Event Mgt
  • Mass Communication, etc. 
  • Computer certificate courses of reputed institutes accredited to Dept. of Electronics or institutes affiliated with an approved university.

Courses like:

  • ICWA
  • CA
  • CFA, etc.

Courses conducted by:

  • IIM
  • IIT
  • IISc
  • XLRI
  • NIFT etc.

Regular Degree / Diploma courses like:

  • Aeronautical
  • Pilot training
  • Shipping etc.,

(approved by the Director General of Civil Aviation/shipping or equivalent foreign body)

  • Evening courses of approved institutes.
  • Other courses leading to diplomas/degrees etc. conducted by colleges/universities approved by UGC / Govt./ AICTE / AIBMS / ICMR etc.

Courses like:

  • Teachers Training Course
  • Nursing Course
  • BEd 

For abroad studies:

  • regular Graduate Degree
  • Post-Graduate Degree
  • Diploma/Certificate
  • Doctorate courses in any discipline offered by abroad Institutes

Note: Universities in the USA, UK, Canada, Australia, Singapore, Japan, Hong Kong, New Zealand, and Europe [Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, United Kingdom] will be primarily considered for the education loan. Other countries are acceptable on a case-by-case basis.

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Education Loan Fees & Charges

Here is a list of processing fees and other charges of Banks and NBFCs:

Government Banks include the State Bank of India (SBI), Bank of Baroda (BOB), Canara Bank, and Union Bank of India (UBI), Punjab National Bank (PnB) etc, Whereas Private banks and NBFCs include institutions like Axis Bank, ICICI Bank, HDFC Bank, Avanse and Auxilo 

Government Banks:  Rs.10,000 + GST

Private Banks:  1% of the loan amount + GST

NBFCs: 0.75% to 1.5% of the loan amount + GST

Note: Collateral Legal and Valuation charges between Rs. 7500 to Rs. 10,000. Only applicable to secured loans.

WeMakeScholars is a government-funded non-profit organization, supported by the Ministry of Electronics & Information Technology under the Digital India Campaign. We do not ask for any service charges or fees from students to process their loans. All our services are free of cost.

Expenses Covered in Education Loan

Here is the list of expenses covered in an education loan :

  • Tuition fees- The tuition fee is covered in all education loans as it is the primary expense that students have to pay. The tuition fee is mentioned in your offer letter or admit card provided by your university. It is disbursed directly into the university's bank account.  

  • Living expenses- This includes the accommodation costs, food, and travel expenses that you would need while studying abroad. The student must carefully calculate their living costs and request the living expenses accordingly. The disbursement of living expenses is different in each financial institution.

  • Health insurance- Many lenders include health insurance in the expenses as part of an education loan, but it has become an optional expense ever since the COVID-19 pandemic.

  • Travel tickets- A two-way flight ticket once per year is provided for students. Banks don't automatically give you money for airplane tickets. If you can't afford to pay for your travel, you need to ask the bank to include the cost of air tickets in the list of expenses they cover for you. Most banks are willing to help with the cost of air tickets.

Pro tip: Getting a degree comes with costs like buying books, a laptop, course materials, project work, and study trips. These expenses are not part of the tuition fees and need extra money. Some banks include them when deciding how much loan you can get. If your study costs aren't covered by the loan, you can ask your bank to add them to the list.

  • Books & Stationery cost - Books & stationery expenses incurred during the entire course of study.

  • Laptop & Computer cost -  If required for the course, students can use the money from their study loan to purchase a laptop or computer.

  • Cautionary deposit- The amount of up to 10% of the amount can be used as a cautionary deposit.

  • Miscellaneous expenses- Any other expenses incurred towards field visits or projects.

Note:  Before applying for an education loan, it is crucial to consider various important points to avoid complications after approval. Once the loan is sanctioned, no changes can be made to the application, so accuracy is key.

  • First, applicants should calculate the correct costs of accommodation and other expenses, and make sure that the costs are accurate to avoid any future issues.
  • Additionally, carefully reviewing the list of expenses covered by the chosen financial institution is important.
  • If necessary, applicants should request adjustments to align with their specific requirements.
  • Another important consideration is the availability of part-time job options in the country of relocation; if uncertain, it's advisable to factor in living expenses accordingly. 
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Types Of Collateral For An Education Loan

Immovable Property:

An immovable property is something that cannot be moved or shifted from its original place and whose quality, quantity, or shape would change on moving. A few examples of immovable property would be Houses, Flats, and Land. 

Type

Value considered for the loan

Documents required

House, Flat, Land

75% to 100% of the property's realizable value

All property papers including title deed, sale deed, link document, and property tax copy are required.

Liquid Security:

Liquid Security or assets are a type of property that can easily be converted into cash while still retaining its market value. A few examples of liquid assets would be government bonds, FD, LIC policies, etc. 

Type

Value considered for the loan

Documents required

Fixed Deposit

Upto 100% of the principal value

FD online or physical receipt

LIC or other insurance policies

Upto 90% of the principal value

Surrender value certificate and insurance receipt

Bonds

Upto 100% of the face value

Bond certificate

Mutual funds or shares

Upto 50% of the current value- Max loan limit 20 lacs

Shareholding certificate or purchase proof

 

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Features and Benefits of an Education Loan

A few features and benefits offered by education loans are very low-interest rates, collateral-free loans, education loans without an i20, pre-visa disbursement, and much more, TCS on foreign remittance, and income tax deductions under section 80E. 

Know more: Top 9 Advantages Of Education Loan You Need To Know

Tax Benefits on Education Loan

  1. Under section 80E of the Income Tax Act 1961, the complete interest amount of a student loan can be claimed as a tax-free expense which means up to your effective interest rate will be 30% less than quoted.
  2. Under section 80C of the Income Tax Act 1961, an individual can claim an interest portion of up to 1.5 lacs from the total taxable income.
  3. TCS on foreign remittance: When you send money abroad, you need to pay TCS on foreign remittance. TCS is 5% if you are sending money from your account and it is 0.5% only if money is coming through an education loan, so there is a saving of 4.5% on foreign remittances.

Education Loan Subsidy Schemes

Central Scheme for Interest Subsidy (CSIS)

The scheme was announced by the MHRD, now the Ministry of Education, to grant interest subsidies on study loans to students belonging to the EWS section of society. 

Eligibility criteria for CSIS 

  • The annual family income of the student should not exceed Rs 4.5 lacs per annum.
  • Students should have mandatory proof of belonging from the EWS section of society.
  • Students must secure admission in approved courses of study in India only

Benefit: Under the scheme, in the moratorium period, eligible students need not pay any interest for their student loans taken to study in India.

Padho Pardesh Scheme

The interest subsidy scheme was launched by the Ministry Of Minority Affairs, GOI to benefit meritorious study-abroad aspirants belonging to economically weaker sections of notified minority communities.

Note: The Padho Pardesh scheme has been discontinued from 2022-2023 

Dr. Ambedkar Interest Subsidy Scheme for OBC and EWS Students

The interest subsidy scheme was launched by the Ministry of Social Justice and Empowerment, for students belonging to OBC and EBC sections of the society, on the interest payable within the moratorium period. This scheme is for eligible abroad study aspirants.

Note: Dr. Ambedkar Interest Subsidy Scheme for OBC and EWS Students scheme has been discontinued from 2022-2023 

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Say goodbye to confusion and delays caused during education loan disbursement

Tips To Manage Your Education Loan

Follow the following tips to effectively manage your education loan 

Choose the right repayment plan:

  1. Your lender will provide various repayment options, so pick the one that aligns with your budget.
  2. Consider the length of your moratorium period.
  3. Also, think about your expected income from your first job.
  4. Without proper planning, you may end up with a higher EMI that could strain your finances.

Opt for a shorter loan tenure:

  1. An effective strategy for handling student loans is opting for a shorter repayment tenure.
  2. While shorter tenures may mean higher monthly payments, they also result in significant interest savings over the loan's duration.
  3. Be mindful not to choose unaffordable EMIs, but rather select the shortest tenure you can manage.
  4. Use an education loan EMI calculator to understand the monthly payments within your means.

Set up automatic payments:

  1. It's crucial to avoid missing loan payments as it can affect your CIBIL significantly.
  2. Late payments can impact your credit score and lead to additional fees.
  3. Prevent this by setting up automatic debits from your savings account.
  4. Regular, on-time payments contribute to maintaining a healthy credit report, which proves beneficial for future loan applications.

Pay off interest during the moratorium:

  1. Initiate payments toward the interest on your education loan during the moratorium period, even though the full repayments begin after this phase.
  2. The moratorium typically lasts for 6 months or 1 year after completing your course.
  3. Starting early payments on the interest accrued while studying can result in substantial savings overall.
  4. Consider securing a part-time job during college to contribute to paying off this interest, potentially turning a hobby into a source of income.

Make extra payments towards your loan:

  1. If you come into extra cash, whether through a work bonus or a gift, consider making larger payments toward your student loan.
  2. This approach helps alleviate the overall repayment burden and may even lead to early loan closure.
  3. However, check with your lender for any pre-payment penalties before proceeding.

Education Loan Repayment Tips:

  1. Check your outstanding loan amount through Internet banking in your student loan account
  2. Issue a cheque to your bank for the due amount.
  3. Fill out the study loan closure form via online or offline mode
  4. While issuing a cheque for the outstanding amount, keep a little extra amount, in case the manager closes your loan the next day, there shouldn’t be an additional outstanding amount.
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Education Loan Customer Care Numbers

We are a dynamic team of expert individuals, who are determined to fulfill your dream of abroad education, and that is why, we are always available to resolve all your doubts and queries at any stage of your student loan sanctioning process. You can reach out to us by:

  • By calling your assigned financial officer during office hours or by calling our support team at +919393344424.
  • Alternatively, you can drop an email to the customer support team of WeMakeScholars at hello@wemakescholars.com.

Feel free to reach out to us at any stage of your student loan process, we will try our level best to resolve your concern as soon as possible.

Education Loan FAQs

  • How does Education Loan work?

    Education loan is the financial aid offered by public banks, private banks, and NBFCs in India to students who lack proper financing to pursue their higher education in India or even abroad, as per their eligibility and requirements. The lenders charge interest on the offered education loan and have certain repayment policies according to which a student will have to repay the loan amount within the repayment duration.

  • What is the best way to repay an education loan?

    All the ways through which a student loan is repaid as early as possible is the best way to repay an education loan. Generally, students have to pay EMIs to repay the loan within the stipulated repayment duration which is generally 10 to 15 years, but there are certain methods to repay the loan even before the repayment period. Those are: Pre-payment or Part payment, Reducing the repayment period, Consider transferring the study loan

  • Can I get an interest-free education loan?

    You will surely get an education loan at the cheapest rate of interest, than from anywhere else, if you process it with WeMakeScholars, but banks do not offer interest-free study loans. However, you can apply for fully-funded scholarships through our website to arrange funds for your higher education.

  • What happens if an education loan is not paid?

    If an education loan is not paid by the borrower, banks will recover their lended money by selling off the collateral pledged by the borrower if it is a collateralized student loan. In the case of non-collateralized study loans, the banks after sending multiple notices to the applicant and guarantor regarding the same will declare the lended loan as default. After which the credit score of the applicant will take a serious hit, and the borrower may not be able to take loans further.

  • Can we cancel the education loan after approval?

    Yes, an education loan can be canceled even after approval, but for that a student will have to write a request to the banks, stating the reason for the same, if the lender bank finds the reason satisfactory, it will cancel the loan. But the processing fees incurred while the loan sanctioning process will not be refunded.

  • How much education loan can we get without collateral?

    You can get upto Rs 75 lacs without pledging any collateral with the banks, but in order to get such a high amount, your financial co-applicant must be earning well and you should satisfy the other eligibility criteria of the lender banks. A higher amount may also be offered depending on the student's loan profile, speak to your financial officer to know about the possible lender options.

  • Who is eligible for an education loan?

    All the students who satisfy the eligibility criteria of the lender bank can get an education loan. The criterias are different for different banks and their loan schemes. However, the basic eligibility criteria include, academic scores, applied course, applied college or university, preferred country, financial co-applicant’s income, etc. You can check your education loan eligibility by filling out the eligibility check form.

  • Who can be a guarantor for an education loan in India?

    A guarantor is a person who owns the property that is being pledged to take an education loan. Usually the primary co-applicant, mostly parents owning the collateral, are considered as a guarantor, but if the co-applicant is not pledging any property as collateral then the candidate's immediate family. For e.g., uncle, aunt, friends of the candidate can be the guarantor for a collateralized education loan in India.

  • What is the current education loan interest rate?

    The current rate of interest for an education loan with collateral is between 9-11%, while for an education loan without collateral it is 11-13%. Usually, it is suggested to take collateralized education loans from public banks as they charge cheaper interest rates comparatively.

  • Can a student get an education loan without parents?

    Yes, a student can get study loan without parents, they can have their siblings or if married, their parents-in-law or spouse as their co-applicants. A student can get an education loan without a financial co-applicant but having any one of the above-mentioned relatives as a primary co-applicant is mandatory to get an education loan.

NEWS

Education Loan Disbursements Surge by 33.8% in FY 2023-24 Quarter

The desire among Gujarat's students to study abroad is surging, evident in a notable 33.8% increase in education loan disbursements during the second quarter of fiscal year 2023-24. As per the State-Level Banker's Committee (SLBC) Gujarat, banks allocated Rs 511 crore for education loans this quarter, compared to Rs 383 crore in the corresponding period of FY 2022-23.

Bank officials attribute this rise to the growing ambition among students to pursue undergraduate and postgraduate courses overseas. The aspiration isn't merely about attaining a foreign degree; it extends to seeking employment and settling abroad.

According to banking sources, a considerable 6,384 students applied for loans in the second quarter alone, underscoring the increasing trend. Foreign education consultants highlight the relaxed bank norms and heightened awareness as key factors propelling this growth.

Bhavin Thaker, founder of a consultancy firm, notes a shift towards undergraduate courses abroad, previously dominated by postgraduate pursuits. Banks, in tandem, are actively promoting their education loan products, leveraging incentives like nominal interest rates and no mortgage requirements, especially for admissions to prestigious universities.

Furthermore, students are diversifying their academic interests, exploring fields beyond traditional engineering and management to encompass psychology, humanities, mass communications, and public policy. This evolving landscape reflects a broader international educational outlook among Gujarat's youth.

Last Updated - 25/01/2024

Tata Capital introduces education loans for studying abroad, offering 100% financing without requiring collateral, with a maximum loan amount of up to Rs 75 lakh.

Tata Capital Ltd, a leading financial services firm under the Tata Group, has introduced Education Loans for higher education in India, the USA, Canada, the UK, Australia, New Zealand, Germany, Singapore, and Dubai (UAE). Available for Undergraduate, Postgraduate, or Masters programs in STEM, Management, and Vocational courses, these loans offer up to Rs 75 lakhs without collateral and up to Rs 200 lakhs with collateral or total educational expenses coverage. Pre-admission sanction letters expedite application processes. Competitive interest rates and flexible repayment plans ease financial burdens during studies.

Vivek Chopra, Tata Capital's Chief Operating Officer, emphasizes a commitment to trust and transparency, offering comprehensive support covering tuition, travel, and medical expenses. The focus remains on facilitating access to higher education, transcending socioeconomic barriers, and empowering students to pursue academic goals.

Last Updated On - 25/01/2024

Education Loans Surge by 20.6% to ₹1.1 Lakh Crore, Marking Record Growth!

Education loans surged by 20.6% to ₹1,10,715 crore in the current fiscal year until October, marking a record high compared to ₹96,853 crore in the previous year. Reserve Bank of India (RBI) data highlights this as the steepest growth in five years, contrasting with a 12.3% rise in FY23 and a 3.1% decline in FY22.

Several factors are fueling this surge. The revival of offline courses both domestically and internationally, coupled with a low base, has spurred fresh demand for education loans. Foreign education loans, averaging ₹40-60 lakhs, constituted 65% of disbursed loans over the past year.

Furthermore, recent RBI measures tightening credit elsewhere haven't affected education loans, potentially bolstering credit flow to this sector in the upcoming months. Notably, loans for education in the US are notably high, supported by a record issuance of student visas, further boosting bank portfolios.

The ease of loan application and disbursal processes is also contributing to this growth, with some NBFCs, like HDFC Credila, offering collateral-free loans up to ₹50 lakhs with digitized procedures, including Video KYC, ensuring quick disbursals within a week.

Rating agency data underscores NBFCs' significant role, with education loans witnessing a remarkable 100% growth in Assets Under Management in FY23 compared to the preceding year.

Last Updated - 25/01/2024

Haryana and Punjab Lead Surge in Higher Education Loan Applications

Haryana and Punjab lead in applications for higher education loans in both public and private sector banks over the past five years, as per data presented in Parliament. In 2018-19, Haryana had 4,716 applications, while Punjab had 4,297. The following year saw a rise of 23.4% in Haryana and 29.7% in Punjab. However, the Covid-19 impact in 2020-21 led to a decrease of 6.7% in Haryana and 18% in Punjab. Yet, in 2021-22, there was a significant surge in applications in both states: a 47.1% increase in Haryana and 60% in Punjab.

In 2022-23, Haryana had 11,133 applications, a rise of 39.4%, while Punjab had 10,414, a rise of 42.3%. Maharashtra led the nation with 78,694 applications, followed by Kerala and Tamil Nadu.

According to Minister of State for Finance Bhagwat Karad, scheduled commercial banks adhere to the Indian Bank Association’s Model Education Loan Scheme, offering collateral-free loans up to Rs 7.50 lakh for higher education. Public sector banks, with an 83% share in educational loans in 2022-23, also provide collateral-free loans exceeding Rs.7.50 lakh for premier institutes based on their policies.

Last Updated- 29/01/2024

Financial Relief for Students: Indian Banks Seek RBI Approval to Ease Education Loan Burdens

Indian banks have put forth a proposal to the Reserve Bank of India (RBI) suggesting a reclassification of students' first unpaid education loans as 'standard' if they apply for a second loan. This move aims to extend repayment periods and offer students more flexibility in gaining work experience before pursuing higher education.

Currently, when borrowers partially repay an education loan, it's labeled as 'restructured,' leading to higher interest rates for subsequent loans. Typically, loan repayments start after a one-year moratorium period, with options for restructuring if borrowers wish to defer payments for further studies, albeit at the cost of affecting their credit rating.

The proposed change would maintain the standard classification for the initial loan, easing financial burdens on students early in their careers. It's seen as a win-win for both banks and students, curbing overdue loans and ensuring a steady flow of funds for education.

This initiative coincides with a projected 40% surge in education loans by non-banking financial companies (NBFCs), driven by increased overseas education pursuits. Notably, public sector banks offer education loans at lower interest rates with no prepayment penalties, encouraging borrowers to consider early repayment to minimize overall loan costs.

Last Updated- 29/01/2024

Our Education Loan team will help you with any questions

29 Comments

  1. Praveen Thomas

    Please give a description about unsecured loan
    07 Feb, 2024 at 09:41 PM REPLY
    1. Dammannagari Harish

      Hey Praveen,

      Unsecured loans are loans that are not backed by collateral. This means that the lender relies solely on the borrower's creditworthiness to determine whether to extend the loan. Because there is no collateral involved, unsecured loans typically have higher interest rates compared to secured loans. We encourage you to get in touch with your Financial Officer, they'll evaluate your profile and check your eligibility from the leading 15+ public and private banks in India.

      May I know if you've initiated your loan process?

      08 Feb, 2024 at 05:21 PM REPLY
  1. Joseph Thomas

    Why I have not received a call back yet?
    12 Feb, 2024 at 11:43 AM REPLY
    1. Dammannagari Harish

      Hello Joseph Thomas,

      I apologize for the minor delay. I trust that your financial officer, Ananthu, has contacted you to discuss your eligibility for an education loan. Please reach out to him for any updates regarding the progress of your loan application.

      16 Feb, 2024 at 12:14 PM REPLY
  1. Afua Antwiwaa

    Are other citizens aside Indians eligible
    24 Feb, 2024 at 12:26 AM REPLY
    1. Sam Cleopas

      Hello Afua Antwiwaa,

      Greetings! There are around 26,000+ scholarships offered on our website. Please explore the scholarships based on your nationality, medium degree, field of interest, and the country you want to pursue your education. Check the eligibility and proceed with the application process. Hope that helps!

      26 Feb, 2024 at 03:40 PM REPLY
  1. D N Dilip Kumar

    I am not able to contact my financial officer anuhya, kindly help me other officer please
    04 Mar, 2024 at 10:40 AM REPLY
    1. Dammannagari Harish

      Hello Dilip,

      Kindly contact the support team to raise a request and inform them regarding the concern. They will assist you with the necessary information.

      05 Mar, 2024 at 12:32 PM REPLY
  1. Satish Kumar M

    Hi there, I would like to transfer my education loan from Auxilo to a different bank due to a need to modify the primary co-applicant. I need your assistance with this. Thankyou
    07 Mar, 2024 at 11:29 AM REPLY
    1. Dammannagari Harish

      Hello Satish,

      Certainly! You'll receive a call soon from your financial officer, Naveen Kumar. He is the designated person who will assist you with any concerns you may have regarding education loans, and you can discuss the queries with him.

      07 Mar, 2024 at 12:55 PM REPLY
    1. Satish Kumar M

      Thankyou for your prompt response
      07 Mar, 2024 at 12:57 PM REPLY
  1. Arvind Kumar -

    Dear Team I want to know how much time is taken by for the loan disbursement. I don't have any guarantor from my first blood relatives. My father is no more so can I make co borrower to my nephew?
    10 Mar, 2024 at 10:32 AM REPLY
    1. Dammannagari Harish

      Hello Arvind,

      Generally, the processing time for an education loan varies depending on the bank and the type of loan, typically taking around 8-10 working days on average. I recommend discussing with our financial officer to address your queries regarding the education loan, as this will provide you with accurate information on your specific query. Additionally, I advise you to check the eligibility for an education loan.

      12 Mar, 2024 at 03:38 PM REPLY
    1. Arvind Kumar -

      How can I contact with financial officer?
      12 Mar, 2024 at 04:01 PM REPLY
    1. Dammannagari Harish

      Hi Arvind Kumar,

      No worries. You can expect a call from your financial officer, Piyush Kaul, within 24-48 working hours. You can discuss it with him.

      12 Mar, 2024 at 06:11 PM REPLY
  1. D N Dilip Kumar

    I need to get new financial officer in my case as my financial officer Anuhya is not at all responsive kindly please help with other financial officer
    10 Mar, 2024 at 02:16 PM REPLY
    1. Dammannagari Harish

      Hey Dilip,

      I apologize for the inconvenience caused. I believe that Anuhya has communicated with you over the phone, and I hope that your queries have been resolved.

      12 Mar, 2024 at 03:44 PM REPLY
  1. Muhammed Nabeel

    I am seeking financial assistance for pursuing a Master's in Computer Science and am in need of an education loan against my land, which does not have any buildings on it. I have contacted the SBI bank near me, and they informed me that a loan against land without buildings might face rejection. They cited a previous instance where a similar application was declined. Additionally, they mentioned that the pre-visa disbursement would cover only 50% of the tuition fee, while I would be responsible for paying the remaining balance, including the GIC. The bank assured me of reimbursement post visa approval. I also received a call from KVP through WeMakeScholar, and they confirmed that pre-visa disbursement is not feasible. I am seeking guidance and assistance in navigating these loan terms and conditions. Your support in clarifying this matter would be highly appreciated.
    13 Mar, 2024 at 02:00 PM REPLY
    1. Dammannagari Harish

      Hello Nabeel,

      It's advisable to talk with your financial officer, Ananthu Mohan, who can assist with the loan terms and conditions. Feel free to reach out to him with any queries you may have regarding your education loan.

      13 Mar, 2024 at 06:19 PM REPLY
  1. Muhammed Nabeel

    I need education loan for masters in Canada and i need arround 45 lakhs,I need education loan against collateral which is land without building under grampanchayat Kerala. When I contacted nearest sbi branch for loan the person in branch told the approval chance for loan against land without building very less because earlier when they apply it was rejected and also they told pre-visa disbursement will only 50% of tution fee Balance fee and gic amount i should pay after getting the visa they reimburse it but for filling canada students visa we need to pay 1 year tution fee and 1 year living expenses it will around for my course will be 28 lakh .and also when I contacted some of students whom took education loan sbi in accross Kerala they told they have received education loan pre-visa full amount gic and tution fee.so please help me
    15 Mar, 2024 at 02:08 AM REPLY
    1. Dammannagari Harish

      Hi Muhammed Nabeel,

      Please note that banks do not accept open plots as security for education loans. Additionally, if you intend to pursue your studies in Canada, you must fully pay for your living expenses and tuition one year in advance of applying for a visa. Moreover, the entire payout is usually required before your visa application is denied. It is advisable to speak with your Financial Officer and his Head for guidance throughout the loan application process, as they will provide full support.

      15 Mar, 2024 at 05:37 PM REPLY
  1. Archana Raj P

    I have now registered on the website for education loan.Will I get a call back?
    15 Mar, 2024 at 03:09 PM REPLY
    1. Dammannagari Harish

      Hi Archana Raj,

      Certainly! You will definitely receive a call from your financial officer on your registered mobile number within the next 24-48 hours. They will be in touch to assist you further with your inquiries or concerns regarding education loan eligibility and to provide guidance on the next steps in the process. Simultaneously, they will address any queries you may have regarding the education loan process.

      15 Mar, 2024 at 05:26 PM REPLY
Ajay Kumar
WeMakeScholars- supported by IT Ministry, Govt. of India.
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