Imagine a sunny day when you are rushing to your nearest bank branch, drenched in sweat. The deadline for your admission is looming, and you neither have the time nor energy to visit multiple banks to apply for an education loan. If you just gulped after reading this, imagine how stressful it truly is to go to banks to apply for a loan physically. That is why, under the Digital India initiative from the government of India, many banks, government websites, and NBFCs offer their education loan services online. Why wander from one bank branch to another for a student loan when you can apply online?
If you are someone who needs an education loan by government or a bank, then you can learn how to get it through their website by reading below. We have also discussed its benefits, common mistakes, and much more, so keep on reading below to learn more about study loans online.
Benefits of Applying for Education Loan Online
- No need to knock on every bank branch door for a student loan.
- The whole process is simple, and you can find free guides on the internet.
- No need to carry physical copies of required documents. Just upload the digital documents during the application process.
- The interest rates, loan amount, need for collateral, and other aspects of the education loan will not change if you apply online.
- Education loan online application is available 24/7 while bank branches close in the evening and remain closed on the weekends & holidays.
- With online applications for study loans, you can quickly compare different banks and NBFCs to find the best one and apply.
- Bank websites have customer support available for loan applicants via chat, email, or phone.
- When you apply for an education loan online, you will get all the proof of loan in digital form, which is very helpful during ITR filing for claiming education loan tax benefits.
Eligibility Criteria for Education Loans Online
You must meet the education loan eligibility criteria to be able to fill out the online application. Below, we have listed some of the important eligibility criteria that you must meet.
- To be eligible for a study loan, you need to be between 16 to 35 years of age.
- You must be an Indian citizen who is eligible to apply for loans.
- For online education loans, having an admission letter from a recognised college/university is mandatory.
- You need a co-signer for your education loan online.
- The co-borrower’s income should be sufficient to cover the loan amount if you default.
- A collateral is required for secured loans and not for unsecured loans.
- You would need your PAN and Aadhar Card for verification.
- The applicant’s academic performance should be good throughout his career.
- The credit history of the applicant and the co-signer should be good.
Expenses Covered by Education Loan Online
An education loan covers the financial requirements necessary for completing higher education. This typically includes course fees and other related expenses such as hostel fees, books, and equipment costs. Below, we have provided an extensive list of expenses covered by an education loan online:
- Course fees – Your course fees can be covered fully or partially through a study loan.
- Hostel fees – You can add the living expenses to your loan amount at the time of application.
- Mess fees – Similar to hostel fees, you can add your mess fees to your loan amount.
- Travel expenses – If your hostel or home is away from your college and you need to spend a substantial amount of money on travel, then travel expenses can be covered using a loan. Keep in mind that plane tickets for study abroad are also covered.
- Exam fees – Educational institutes charge an exam fee every semester, which is also covered by an online education loan.
- Books & Equipment – For certain courses such as BDS, students are required to buy expensive equipment. This cost can be covered by a study loan.
- Miscellaneous expenses – There can be days when sudden expenses come your way, such as projects, field trips, industrial visits, etc. That is why some banks offer the option to add a component for miscellaneous expenses in your online education loan.
Step-by-Step Guide to Applying for an Education Loan Online
Filling out an online education loan application form is straightforward, but make sure you have all the necessary documents ready before you begin. You can read our detailed step-by-step guide for the online education loan application process below.
- Choose One of the banks or NBFCs for your education loan.
- Go to their official website and navigate to the education loan section.
- Check your eligibility criteria and then click on the “Apply Now” button.
- Start filling out the study loan application form.
- Upload all the required documents in the mentioned size and format.
- Click on the submit button, and you will be done!
The bank or NBFC will take a few days to review your application and complete the loan underwriting process. Once your application passes these checks, you will receive your loan sanction letter in your email, and a physical copy will be mailed to you.
Documents Required for Application of Education Loan Online
To apply for an education loan online, you are required to submit some documents. Keeping them ready and handy before starting your loan application process is very important. Below are the documents you will need in PDF format before applying online for an education loan.
- All your educational documents from Class 10 onwards, including mark sheets and degree certificates.
- ID proofs such as your Aadhar Card, PAN Card, Driving License, etc.
- Address proof
- Digital signature
- Digital photograph
- An admission letter from the university or college to which you applied.
- Co-signer’s salary slips, bank statements, and income certificate.
- Papers of the collateral
Also Read: Documents Required for an Education Loan – An Extensive List
How to Calculate EMI of your Education Loan Online
To calculate the EMI of your education loan online you will need to know the education loan interest rate. Then, you will be required to provide the loan amount that you have received. Typically, these things are mentioned along with the EMI amount in your sanction letter. However, if you are simply trying to know your EMI amount before applying for an education loan then you can use a student loan EMI calculator and input your loan amount and the student loan interest rate to get the per month EMI.
Also Read: Education Loan EMI Calculator
Top Banks for Online Education Loans
Indian banks offer their education loan programmes online to students. If you visit their official website or use their banking app, you will be able to find the application form. Below, we have provided details of some of the banks offering education loans online.
| Education Loan | Loan Amount |
| Axis Bank Education Loan | Get up to ₹75 lakhs |
| SBI Education Loan | Education loan online up to ₹1 crore or more based on need and course |
| HDFC Education Loan | Loans up to ₹1.5 crore |
| ICICI Bank Education Loan | Student loans up to ₹1 crore for courses in India and ₹3 crore for study abroad |
| Canara Bank Education Loan | No upper limit on the education loan based on the need |
Also Read: Top Bank Loans for Education Funding in India
Top NBFCs for Online Education Loans
If you struggle to get an online student loan from banks, then you can try to get a loan from one of the RBI-approved Non-Banking Financial Companies (NBFCs). Most of the NBFCs offer education loans online only, and you can find out about the top NBFCs in India by reading below.
| Education Loan Online By NBFCs | Loan Amount |
| Credila Education Loan | Study loans available up to ₹1.5 crore. |
| Propelld Education Loan | Apply for loans up to ₹50 lakhs. |
| Avanse International Education Loan Programme | The minimum loan amount is ₹1 lakh, and there is no upper limit. |
| Auxilo Education Loan | Students can get between ₹10 lakhs to ₹2 crore as education loan online |
Also Read: What are NBFCs?
Top Education Loan Online Schemes by the Government of India
Student loans online offered by private financial institutions require applicants to pledge valuable collateral. This is not possible for a huge number of students hailing from middle-class families. That is why the government of India offers various loan schemes online that do not require any co-borrower sign or collateral. Interested students can find more about it below.
Pradhan Mantri Vidyalaxmi Scheme
Meritorious students who can not afford to finance their higher education can take the benefit of the PM-Vidyalaxmi Scheme. Under this education loan scheme by Narendra Modi, students can apply for up to ₹10 lakhs loan for education, which is collateral and guarantor-free. Students can get this education loan online with a 100% interest subsidy by the government if their annual family income is up to ₹4.5 lakhs. Applicants with annual income under ₹8 lakhs per annum can avail of a 3% interest subsidy by the government. Under the PM-Vidyalaxmi Scheme, the Government of India guarantees 75% of the loan amount.
IBA Model Education Loan Scheme
Meritorious students who have a valid admission letter from a college in India or abroad can avail of an education loan under the Model Educational Loan Scheme by the Indian Banks’ Association (IBA). This loan covers costs like tuition fees, hostel fees, books, travel, insurance, and other academic-related costs. As long as the cost is related to academics and is backed by required documents, students can ask for any loan amount. However, it is important to note that for loans above ₹7.5 lakhs, candidates are required to pledge appropriate collateral. Students can also avail of a subsidy on interest paid towards this IBA Model Education Loan Scheme under the Central Sector Interest Subsidy Scheme (CSIS).
You can click here to learn more about the IBA Model Education Loan Scheme.
National Minorities Development & Finance Corporation (NMDFC) Education Loan
Students seeking financial assistance through an education loan can contact their State Channelizing Agency (SCA), which is sanctioned by their state for an education loan under the NMDFC Scheme. Eligible applicants can get a study loan of up to ₹20 lakhs for studying in Indian colleges, and for studying abroad, a loan of up to ₹30 lakhs will be provided. The interest rate will vary from case to case between 3% to 8% per annum.
Note: If your State Channelizing Agency (SCA) is inactive, and you can not apply for a loan, then you can visit your nearest Canara Bank branch and apply for an education loan they offer. The loan will be refinanced according to the applicable provisions under the NMDFC scheme.
Also Read: Education Loan by Government of India
Government Schemes and Subsidies for Education Loan Online
Interest rates of education loan online depend on the repo rate and the spread which the banks decide. For NBFCs, the interest rates are decided by the companies. In both cases, students have to pay a big chunk of their income as interest. This is very difficult for students belonging to low-income families. That is why the government has enabled schemes where they offer subsidies on education loan interest for needy students. You can learn more about these schemes here.
Dr Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas Studies for OBCs & EBCs
The Government of India has launched this scheme to empower students who belong to Backward Classes (OBCs) and Economically Backward Classes (EBCs). Students who are admitted to universities or colleges abroad can get financial help through education loan interest subsidies under this scheme. To be eligible for this scheme, students must pursue master’s, MPhil or PhD level courses. Their total income should not exceed ₹8 lakh per annum, and the applicant must have taken a loan from a scheduled bank under the Indian Banks Association (IBA) Education Loan Scheme.
Applicants can click here to learn more about the Dr Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas Studies for OBCs & EBCs.
Central Sector Interest Subsidy Scheme (CSIS)
The CSIS scheme comes under the Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP) Yojana, and it is a subsidy scheme for students who have applied for education loan online under the Indian Banks’ Association (IBA) Model Education Loan Scheme. The full interest subsidy during the moratorium period under the Central Sector Interest Subsidy Scheme (CSIS) is offered to students who have opted for technical or professional courses in India.
Common Mistakes to Avoid When Applying for an Education Loan Online
Listed below are some of the common mistakes applicants make when applying for an education loan online.
- Not completing the loan application is one of the prominent reasons for rejection.
- When submitting supporting documents such as co-signer income proof, educational documents, etc, students tend to leave out some documents.
- Not checking the CIBIL score of the co-signer.
- Increasing the required loan amount without any educational need will lead to rejection.
- Not having a sufficient value of collateral.
Also Read: Dos and Don’ts to Avoid Educational Loan Application Rejection
How to Improve Your Chances of Getting an Education Loan Online
The process of applying for an education loan online is very simple, yet many applicants make mistakes that lead to rejection. That is why we have brought to you the best tips to improve your chances of getting your education loan sanctioned.
- Make sure your application is completely filled out, and all the required documents are attached in the mentioned format.
- Ensure that you have a co-signer with a positive credit history who ideally does not have an existing loan or credit card or who earns more than the EMI of the loan amount you want to take.
- For loans more than ₹7.5 lakhs from banks and ₹10 lakh from government schemes, ensure that you have an asset of higher value than your loan amount to pledge it as collateral.
- Ensure that the course and college you choose for higher education is one of the colleges and courses for which the bank offers loans. For example, the banks will offer a loan for a BTech degree from one of the recognised colleges but will refrain from offering a loan for diploma courses.
- You must demonstrate that you have a good educational background to get your education loan online approved.
To understand what goes behind the doors of banks when they consider your loan application, you must understand the education loan underwriting process. You can click here to learn more about it.
Conclusion
Education loan applications can be filled out online and offline, but the most convenient way is to fill them out online. This is because you do not have to visit any branches and carry physical copies of the required documents. You can complete the education loan online at the convenience of your home. Here, you can get all the information related to online education loan applications, from the step-wise guide to the details regarding financial institutions offering this feature.
FAQs
Can I apply for an education loan online?
Yes, you can apply for an online education loan from banks and NBFCs. Also, the loans offered by the government under various schemes can also be availed online.
How do I apply for an education loan online?
To apply for an education loan online, you first have to visit the official bank website or NBFC, go to the education loan section, and fill out the application form.
What documents are required for an education loan online application?
Documents required for an education loan application online usually include ID proof, address proof, academic records, admission letter from the educational institution, cost of course expenses, and co-signer’s income proof.
What is the interest rate on student loans?
The interest rate on education loan online is decided by adding the current repo rate set by the RBI and the spread. The spread changes depending on the applicant's risk factor. Higher risk means higher spread; thus, the interest rate will increase.
Can I get a moratorium period for my online education loan?
Yes, typical education loans include a moratorium period of one to three years after the compilation of the course, during which the applicant does not have to pay back the loan.