For most Indian families, an education loan is part of the plan — and the right choice can save ₹10–25 lakh over the loan's life. The wrong one, or a missed tax benefit, quietly costs you.
Where to borrow
- Nationalised (PSU) banks — SBI, Bank of Baroda, Canara: the lowest rates and longest tenures, with more paperwork.
- Private banks — Axis, HDFC, ICICI: faster processing, rates 0.5–1.5% higher.
- NBFCs — HDFC Credila, Avanse, Auxilo: more flexible on collateral.
- International lenders — Prodigy, MPOWER, Leap: lend on future earnings, often with no collateral or co-signer.
Interest rates at a glance
| Lender | Rate (p.a.) | Notes |
|---|---|---|
| SBI Global Ed-Vantage | 10.15% – 11.15% | Reduced rate for the scholar list; up to ₹1.5 crore |
| Bank of Baroda | 10.5% – 11.5% | Very competitive PSU |
| Axis Bank | 11.5% – 13.5% | Fast processing |
| Prodigy Finance | 7% – 15% (USD) | No collateral, future-earnings based |
| Leap Finance | 10% – 13% | Collateral-free for strong profiles |
Don't miss Section 80E
Section 80E lets you deduct the entire interest paid on an education loan, with no upper limit, for up to 8 years. At ₹4 lakh/year of interest in the 30% bracket, that's ₹1.2 lakh saved every year.
One more thing worth knowing: a sanctioned loan letter counts as financial proof for many visa applications — even before the money is disbursed.