Education loans: borrow less, borrow smart
A loan should fill the gap left after scholarships, not replace them. Here is how much you can borrow without collateral, what it costs, and what to check before you sign.
How much you can borrow without collateral
First, check the two government schemes
- Interest subsidy (CSIS): family income up to ₹4.5 lakh. The government pays all the interest during the course and one year after, on loans up to ₹10 lakh.
- PM-Vidyalaxmi: admission to a listed top institution gets a loan with no collateral and no guarantor; families earning up to ₹8 lakh can also get 3% interest relief.
Full rules and the loan calculator are on paying for college.
SBI rates, as of 15 October 2026
SBI publishes its rates openly, so it is a useful benchmark. All are floating, linked to the RBI repo rate.
| Scheme | Interest a year | Girl students |
|---|---|---|
| Scholar Loan (select top institutions) | 7.15%–7.90% | — |
| Student Loan, up to ₹7.5 lakh, no collateral | 10.15% | 0.50% less |
| Student Loan, above ₹7.5 lakh, with collateral | 9.65% | 0.50% less |
| Global Ed-Vantage (abroad), with collateral | 9.65% (select institutions 9.15%) | 0.50% less (general category) |
| Global Ed-Vantage, select institutions, no collateral up to ₹50 lakh | 9.65% | — |
| Skill Loan, up to ₹7.5 lakh | 9.65% | — |
SBI also lists a 7.00% rate for students admitted to premier institutes such as IITs and IIMs, valid until 31 December 2026.
Lenders compared
| Lender | Type | Maximum loan | Interest a year |
|---|---|---|---|
| SBI | Government bank | ₹3 crore (secured) | From 7.15% |
| Bank of Baroda | Government bank | ₹1.5 crore (secured) | From 7.10% (premier institutes) |
| Punjab National Bank | Government bank | Based on need | From 7.00% (PNB Pratibha) |
| Canara Bank | Government bank | ₹1 crore (secured) | 7.60%–10.35% |
| Union Bank of India | Government bank | ₹1.5 crore (secured) | From 7.10% (top institutes) |
| Bank of India | Government bank | ₹1.5 crore (secured) | From 7.50% |
| ICICI Bank | Private bank | ₹2 crore (secured) | 9%–10.25% |
| IDFC First Bank | Private bank | ₹1.5 crore (secured) | 8.5%–12% |
| Axis Bank | Private bank | ₹1.5 crore (secured) | 10.71%–12.29% (India) |
| HDFC Credila | NBFC | ₹1 crore without collateral | From 9.95% |
| Avanse | NBFC | ₹85 lakh without collateral | 10.25%–11% |
| Auxilo | NBFC | ₹60 lakh without collateral | From 9.5% |
Rates for lenders other than SBI were collected in March 2026. The RBI raised the repo rate by 0.25% in October 2026, so most floating rates are now about that much higher. Always ask the lender for today's rate in writing.
Studying in India or abroad?
- In India: start with a government bank near home, where top institutions get the lowest rates.
- Abroad: government banks are cheapest if your family can offer collateral; NBFCs lend more without collateral, at a higher rate, and decide faster.
- Either way: money for the visa's proof of funds must be sanctioned before you apply. Start the loan as soon as you have an offer letter.
Before you sign
- Repayment holiday: usually the course plus one year. Interest still adds up during it unless you pay it or get a subsidy.
- Pay the interest while studying if you can. Even small monthly payments cut the final total.
- Ask for every charge: processing fee, margin money (the share your family pays), insurance and prepayment penalty.
- Tax relief: interest paid on an education loan is deductible under Section 80E for up to eight years.
- Never pay an agent to "arrange" a loan. Apply directly at the bank, or on the PM-Vidyalaxmi portal.
Comparing two loan offers?
Send both offers, with amount, rate and repayment terms. A person replies within 12 to 15 hours, free.