Higher education has become increasingly expensive in India and abroad. With rising tuition fees, accommodation costs, and living expenses, most students rely on education loans to fulfill their academic dreams. In 2025, the Indian student loan market has become highly competitive, with banks, NBFCs (Non-Banking Financial Companies), and government schemes offering multiple options.
This guide will help you compare the best student loan options in India (2025), understand eligibility, interest rates, repayment terms, and find the most affordable choice for your future.
Why Student Loans Are Important in 2025
- Rising costs: Average tuition for professional courses in India is ₹10–25 lakhs, while studying abroad can exceed ₹40–60 lakhs.
- Accessibility: Loans make quality education possible for middle-class families.
- Government support: Schemes like the Credit Guarantee Fund for Education Loans (CGFEL) ensure easier approval.
- Flexible repayment: Students get moratorium periods (course duration + 6–12 months) before repayment starts.
Factors to Consider Before Choosing a Student Loan
- Interest Rate: Look for the lowest floating/ fixed interest rates.
- Collateral Requirement: Loans above ₹7.5 lakhs often need collateral.
- Moratorium Period: Grace time before repayment starts.
- Processing Fee: Usually 1–2% of the loan amount.
- Loan Coverage: Tuition, hostel, books, travel, insurance.
- Repayment Tenure: Can extend up to 15 years.
Comparison Table – Best Student Loan Options in India (2025)
| Bank/NBFC | Interest Rate (Approx) | Loan Amount | Collateral | Repayment Tenure |
|---|---|---|---|---|
| SBI Student Loan | 8.65% – 10.15% | ₹10L (India), ₹1.5Cr (Abroad) | Above ₹7.5L | 15 years |
| HDFC Credila | 9% – 13% | Up to ₹1Cr | Yes | 12 years |
| ICICI Bank | 9.5% – 12.5% | Up to ₹1Cr | Yes (above ₹20L) | 15 years |
| Axis Bank | 9.25% – 13% | Up to ₹75L | Yes | 15 years |
| Punjab National Bank (PNB Udaan) | 8.75% – 10.5% | ₹10L (India), ₹1Cr (Abroad) | Yes | 15 years |
| Canara Bank (Vidya Turant) | 8.65% onwards | ₹40L–₹75L | Yes | 15 years |
| NBFCs (InCred, Avanse, Auxilo) | 11% – 14% | Flexible (₹10L–₹50L+) | Often Yes | 10–12 years |
Best Student Loan Options in India 2025 (Detailed)
1. SBI Student Loan Scheme
- Widely trusted by Indian students.
- Covers tuition, hostel, books, travel.
- Moratorium: Course period + 12 months.
- Interest subsidy available for economically weaker sections.
2. HDFC Credila Education Loan
- Specializes in study abroad loans.
- Custom repayment plans.
- Covers GRE/TOEFL/IELTS fees, living expenses.
- Flexible co-borrower options.
3. ICICI Bank Education Loan
- Quick approval process.
- Insurance and forex facilities for abroad students.
- Pre-admission loans also available.
4. Axis Bank Education Loan
- Competitive rates for premier institutes.
- EMI moratorium options.
- Quick online application.
5. PNB Udaan (for Abroad Studies)
- Popular among students going to the USA, UK, Canada.
- Covers 100% expenses (tuition + living + travel).
- Government interest subsidy available.
6. Canara Bank Vidya Turant Loan
- Special loan for students admitted via IIMs, IITs, NITs, AIIMS, ISB, XLRI.
- No collateral for premier institutes.
- Lowest interest rates among public banks.
7. NBFCs (InCred, Avanse, Auxilo)
- Easier approval compared to banks.
- Faster processing.
- Higher interest, but less documentation.
Government Schemes for Students in India
- Padho Pardesh Scheme: Interest subsidy for minority students studying abroad.
- National Minorities Development & Finance Corporation (NMDFC): Loans at subsidized rates.
- Credit Guarantee Fund Scheme for Education Loans (CGFSEL): Helps students get loans up to ₹7.5L without collateral.
Tips to Improve Loan Approval Chances
- Maintain a good academic record.
- Apply with a co-borrower/guarantor.
- Keep documents (admission letter, fee structure, ID proofs, income proofs) ready.
- Choose recognized universities/colleges for faster approval.
FAQs
Q1: Can I get a student loan without collateral in India?
Yes, up to ₹7.5L is usually collateral-free under schemes like SBI Student Loan and CGFSEL.
Q2: What is the maximum loan amount for studying abroad?
Banks like SBI and PNB offer up to ₹1.5Cr depending on the course and country.
Q3: Which is better: bank loans or NBFC loans?
Banks have lower interest rates, while NBFCs are faster and more flexible in approvals.
Q4: Is there any subsidy for poor students?
Yes, the Government offers interest subsidy schemes for economically weaker students.
Conclusion
Choosing the best student loan in India (2025) depends on your study destination, course, and repayment capacity. Public banks like SBI, PNB, and Canara are ideal for affordable loans, while NBFCs are great for quick approvals. Always compare interest rates, moratoriums, and hidden charges before deciding.
For more guidance, explore our detailed education resources:
