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Education Loans in India: The Comprehensive 2026 Sovereign Guide
Top Education Loan Lenders in India (2026)
| Lender | Interest Rate (p.a.) | Max Loan Amount | Collateral Requirement | Best For |
|---|---|---|---|---|
| State Bank of India (SBI) | 8.15% - 10.15% | Up to ₹1.5 Cr | Not required up to ₹7.5L | Meritorious students at premier institutes |
| Bank of Baroda (BoB) | 8.40% - 10.50% | Up to ₹1.5 Cr | Not required up to ₹7.5L | Balanced terms for domestic & abroad |
| Canara Bank | 8.45% - 10.60% | Up to ₹1.5 Cr | Not required up to ₹7.5L | High loan limits & subsidy management |
| Union Bank of India | 8.30% - 10.50% | Up to ₹2.0 Cr | Varies by amount | High-value international degrees |
| HDFC Bank | 9.50% - 13.00% | ₹50 Lakhs+ | Profile-dependent | Fast digital processing |
| ICICI Bank | 9.25% - 13.50% | Up to ₹3 Cr | Flexible for top-tier | Comprehensive study abroad packages |
| HDFC Credila (NBFC) | 9.75% - 13.00% | No upper limit | Unsecured up to ₹80L | Speed & high unsecured limits (USA/UK) |
| Avanse (NBFC) | 10.25% - 15.00% | Profile-based | Optional up to ₹75L | Niche courses & 100% TCOA coverage |
| IDFC FIRST Bank | 9.50% - 13.50% | Up to ₹1.5 Cr | Up to ₹50L unsecured | Quick sanctions for STEM/MBA |
Overall Summary
The landscape of Indian education finance in 2026 has undergone a significant transformation, moving from a rigid bank-led model to a multi-faceted ecosystem that includes digital aggregators, specialized Non-Banking Financial Companies (NBFCs), and the strategic use of family assets. This guide provides a deep-dive analysis into the dual pillars of traditional student loans and the emerging trend of gold-backed bridge financing. Central to this journey is the Central Sector Interest Subsidy (CSIS) scheme, which remains the primary tool for democratizing access to top-tier technical and professional degrees for students from economically weaker sections.
By leveraging the Vidya Lakshmi Portal and understanding the nuances of Loan-to-Value (LTV) ratios, moratorium periods, and Section 80E tax deductions, students and parents can navigate tuition inflation. This guide serves as a technical manual and strategic roadmap for financing undergraduate and postgraduate studies both within India and at premier international institutions, ensuring that financial constraints never act as a barrier to academic merit.
What Are the Primary Types of Education Loans Available for Indian Students in 2026?
The educational loan market in India is fundamentally divided into categories based on the location of the institution and the nature of the security provided by the borrower. Undergraduate Education Loans are the foundational products, designed for students who have successfully transitioned from their 10+2 schooling into degree programs such as Engineering (B.Tech), Medicine (MBBS), or the Humanities (B.A.). These loans typically focus on long-term sustainability as the student may not be earning for four to five years. On the other hand, Postgraduate Education Loans cater to students pursuing specialized Master’s degrees or PhDs. Lenders often view these students with a more favorable eye due to their higher immediate earning potential, offering preferential interest rates for those admitted to "Premier" institutes like the IIMs or IITs.
For those looking beyond domestic borders, Study Abroad Loans have become a critical financial instrument. These are far more comprehensive than domestic loans, covering not just the massive tuition fees of global universities but also ancillary costs known as "passage money." This includes international airfare, mandatory visa fees, and global health insurance policies, which are often non-negotiable for students heading to the US, UK, or Australia.
The security structure of these loans defines their accessibility. Secured Loans require collateral in the form of tangible assets like residential property, commercial plots, fixed deposits, or life insurance policies. Because the bank’s risk is mitigated by these assets, interest rates are significantly lower, usually hovering between 8.15% and 10%. Conversely, Unsecured Loans do not require any collateral but are capped at lower amounts—often between ₹7.5 Lakhs and ₹10 Lakhs—and carry higher interest rates ranging from 10.5% to 14%. These are best suited for students with exceptional academic records or those heading to top-tier universities where the institution's brand serves as a "virtual" security for the bank.
How Does the Central Sector Interest Subsidy (CSIS) Scheme Minimize the Financial Burden?
The Central Sector Interest Subsidy (CSIS) Scheme is arguably the most vital initiative by the Ministry of Education’s Department of Higher Education. Its primary objective is to ensure that no meritorious student is denied the opportunity to pursue professional education due to a lack of initial capital. The scheme functions by having the Government of India pay the full interest on an education loan throughout the Moratorium Period. This period is strictly defined as the duration of the course plus one additional year for the student to find employment. This "interest holiday" is a game-changer, as it prevents the debt from ballooning while the student is still in the classroom.
The eligibility criteria for CSIS are strictly enforced in 2026. The gross parental or family income must not exceed ₹4.5 Lakhs per annum, a threshold designed to target the economically weaker sections of society. Furthermore, the subsidy is only applicable for professional or technical courses. This includes degrees in Engineering, Medical sciences, Law, and Management, but excludes general academic streams. The institution itself must hold accreditation from the NAAC or NBA, or be classified as an Institution of National Importance or a Centrally Funded Technical Institution (CFTI). To avail of this, the loan must be a designated "Scheduled Bank" loan under the IBA Model Educational Loan Scheme. This alignment ensures that the subsidy reaches the most deserving students through a regulated and transparent banking channel.
What Other Interest Subvention Schemes Support Indian Students?
Beyond the flagship CSIS, the Indian government has introduced and refined several other subvention schemes to support various demographics. The PM-Vidyalaxmi Scheme is a notable example, launched to provide a 3% interest subvention for students with family incomes up to ₹8 Lakhs. This serves as a vital safety net for those who exceed the CSIS income limit but still require significant financial assistance to attend any of the 860+ Quality Higher Educational Institutions (QHEIs) recognized by the government.
For minority communities, the landscape has shifted as older programs like Padho Pardesh have been merged or discontinued in their original forms. In 2026, students are encouraged to utilize the Dr. Ambedkar Central Sector Scheme, which provides similar interest subsidies for students from the OBC and EBC categories pursuing overseas studies. These schemes are essential because they recognize that the cost of international education is not just the tuition, but the compounding interest on the loan that can double the debt over a decade if left unmanaged. By checking these options through the Vidya Lakshmi Portal, students can find a specific scheme that aligns with their socio-economic profile and academic goals.
How Do the Top Education Loan Providers in India Compare in 2026?
Choosing the right lender is a strategic decision that depends on the student’s destination, their family's financial stability, and the presence of collateral. The State Bank of India (SBI) remains the leader for domestic students, offering the lowest interest rates through its Scholar Loan and Global Ed-Vantage products. Their rates typically range from 8.15% to 10.15%, making them the go-to choice for students at premier institutes where collateral is not required up to ₹7.5 Lakhs. Bank of Baroda (BoB) is a strong competitor, particularly for students heading to high-ranking global universities, offering loans up to ₹1.5 Crore with competitive rates for premium institutes.
Private players like HDFC Bank and ICICI Bank offer a different value proposition focused on speed and digital integration. While their interest rates are generally higher, ranging from 9.50% to 13.50%, their processing times are significantly faster, which is often a priority for students facing tight admission deadlines. HDFC Credila, a specialized NBFC, has carved out a niche by offering high-value unsecured loans based on the student's "future employability score" rather than just the parent's current income. Canara Bank also plays a crucial role as the nodal bank for government subsidies, making it a preferred choice for students from the EWS category who need a lender deeply integrated with the CSIS disbursement system.
| Lender | Interest Rate (Approx.) | Max Loan Amount | Collateral Requirement | Best For |
|---|---|---|---|---|
| State Bank of India (SBI) | 8.15% - 10.15% | Up to ₹1.5 Cr | Not required up to ₹7.5L | Lowest overall interest rates |
| Bank of Baroda (BoB) | 8.40% - 10.50% | Up to ₹1.5 Cr | Not required up to ₹7.5L | Students at premium institutes |
| HDFC Bank | 9.50% - 13.00% | ₹50 Lakhs+ | Profile and Tier dependent | Quick processing and service |
| ICICI Bank | 10.25% - 13.50% | Up to ₹1 Cr | Usually required for high amounts | International study packages |
| Canara Bank | 8.45% - 10.60% | Up to ₹1.5 Cr | Not required up to ₹7.5L | Managing government subsidies |
Which Key Entities Govern the Education Loan Ecosystem?
Understanding the entities that regulate and facilitate education loans is vital for a successful application. The Indian Banks' Association (IBA) is the foundational body that sets the "Model Loan Scheme," which defines the standard terms for interest rates, moratoriums, and repayment holidays across all public sector banks. The Vidya Lakshmi Portal is the official technological platform that allows students to search, view, and apply for loans across multiple banks using a single form. This portal is essential for transparency and tracking the progress of both loan applications and interest subsidy claims.
Additionally, the National Credit Guarantee Trustee Company (NCGTC) plays a silent but pivotal role. It provides the credit guarantee for collateral-free loans up to ₹7.5 Lakhs under the CGFSEL scheme, which gives banks the confidence to lend to students without physical security. For accreditation, the NAAC (National Assessment and Accreditation Council) and NBA (National Board of Accreditation) are the gatekeepers. If a college lacks these certifications, students may find themselves ineligible for government-backed interest subsidies. Finally, Canara Bank serves as the Nodal Bank for the CSIS scheme, acting as the central hub for disbursing government funds to other banks in the network.
What is the Step-by-Step Process for Applying for an Education Loan with CSIS?
The application process for a CSIS-eligible loan begins with verification. A student must first confirm that their chosen course and college are NAAC/NBA accredited. Once confirmed, the most critical step is obtaining a valid Income Certificate from a competent State Authority, such as a Tehsildar or a Revenue Officer. This document is the cornerstone of the CSIS application and must show that the total family income is below ₹4.5 Lakhs per annum.
The next stage involves registering on the PM-Vidyalaxmi portal. Here, students fill out the Common Education Loan Application Form (CELAF) and can select up to three banks to apply to simultaneously. During this process, they must upload essential documents including their Aadhaar, PAN, Admission Letter, and the Fee Structure provided by the university. Once the application is submitted, the chosen banks perform their verification. It is essential for the student to ensure that the bank marks the account as "CSIS Eligible" in their internal systems at the time of the first disbursement. There is no separate application for the subsidy; the bank manages the claims from the government on the student's behalf, ensuring a seamless experience.
Why Have Gold Loans Become a Strategic Alternative for Education in 2026?
As we navigate through 2026, the traditional education loan is no longer the only viable path to funding a degree. Gold loans have emerged as a powerful, high-speed alternative for both students and parents. By pledging gold ornaments or bank-issued coins as collateral, borrowers can unlock capital with far fewer hurdles than a standard student loan. Unlike traditional loans that scrutinize the student's academic history or future "employability," a gold loan is purely asset-backed. The lender cares primarily about the purity and weight of the yellow metal provided.
This makes gold loans an ideal "Credit Invisible" solution. In many Indian families, wealth is stored in gold but documented income might be low or seasonal—such as for farmers or freelancers. A gold loan ignores the co-borrower's CIBIL score and income tax returns (ITRs) entirely. Furthermore, while traditional loans are paid directly to the university, a gold loan provides liquid cash in the borrower's account. This liquidity is essential for paying for expenses that banks often reject, such as off-campus housing deposits, high-end laptops for coding, or professional exam coaching.
How Do Gold Loans Function as a "Liquid Asset Pledge"?
In technical financial terms, a liquid asset is one that can be quickly converted into cash without a significant loss in value. In the Indian context, gold is the pinnacle of liquidity. While pledging a property for a loan can take weeks or months due to title searches and legal verifications, a gold loan can be processed and the funds liquefied in under 60 minutes.
The mechanics of this process rely on the Loan-to-Value (LTV) ratio. In 2026, the RBI-regulated LTV for gold loans typically hovers between 75% and 80%, though tiered rules allow for up to 85% on smaller loans. For instance, if a family's gold is valued at ₹10 Lakhs, they can instantly receive a liquid credit of up to ₹8 Lakhs. This immediate access to cash allows for a "bridge financing" strategy, where the gold loan covers the immediate seat acceptance fees while the slower, traditional education loan is still being processed.
How Do Domestic and International Loan Expense Coverages Differ?
The diveregence between domestic and international loan coverage is significant, reflecting the vastly different survival budgets required for each path. Both loans prioritize core academic costs such as tuition fees, examination fees, and laboratory charges. For domestic courses, banks usually cover 100% of the tuition, making payments via NEFT directly to the institution. However, living expenses are often limited to on-campus hostels and mess charges. Coverage for off-campus PG (Paying Guest) accommodation is frequently capped at 20% of the total loan amount or requires extensive proof of rent.
International loans offer a much more comprehensive "Survival Budget." In 2026, lenders like HDFC Credila provide a "Cost of Living" (CoL) component that includes off-campus apartment rent, utility bills for electricity and internet, and even monthly grocery stipends. These loans are based on the university’s official "Cost of Attendance," such as the I-20 form in the US. Additionally, international loans cover relocation costs that domestic loans ignore, such as one-way economy airfare and the significant costs of SEVIS and visa processing. They also account for currency fluctuation by providing a "Forex buffer," ensuring that a student isn't stranded if the Rupee depreciates against the Dollar or Euro during their studies.
What Mandatory "Hidden" Inclusions Exist in 2026 Loan Structures?
In the current year, several previously "extra" expenses have become mandatory components of a loan approval. Global Health Insurance is now a non-negotiable requirement for international students, with premiums often bundled directly into the loan amount. Similarly, domestic loans increasingly include a Student Life Insurance premium to cover the loan liability in the event of an unfortunate incident, protecting the co-borrower from debt.
Technology has also been recognized as a core academic need. Almost all lenders in 2026 allow for a one-time purchase of a laptop or computer as part of the loan, usually capped between ₹50,000 and ₹1,00,000. Furthermore, if a course curriculum mandates field trips, study tours, or thesis-related travel, banks will fund these "Project Work" expenses upon certification from the college faculty. These inclusions reflect a modernized view of education, where a student’s success is dependent on more than just a seat in a classroom.
Who Qualifies as the Primary Applicant versus the Co-Borrower?
In the anatomy of an education loan, roles are clearly defined. The Primary Applicant is almost always the student. Even if the student has zero income, they are the beneficiary of the funds. To qualify, the student must have a confirmed or provisional admission to a recognized course and be between 18 and 35 years old. In 2026, lenders use AI-driven "employability scores" to assess the student’s future earning potential, looking at factors like the university’s global ranking and the specific field of study, such as STEM or Data Science.
The Co-Borrower, however, provides the financial backbone. Since the student usually lacks a credit history, the co-borrower is legally responsible for repayment. This role is typically filled by parents, a spouse, or siblings. Some private lenders and NBFCs have extended this to include secondary co-applicants like uncles or in-laws. The co-borrower must meet the "four pillars" of stability: a CIBIL score of 650–700+, a stable income source (either salaried for 6-12 months or self-employed with 3 years of ITRs), an age limit that ensures they are still working during the loan tenure, and a healthy Debt-to-Income Ratio where their existing liabilities don't exceed 50-60% of their monthly pay.
What is the Landscape of Education Lenders Across PSU, Private, and NBFC Sectors?
The lender landscape in 2026 is divided into three distinct pillars, each with its own advantages. Public Sector Undertaking (PSU) Banks, such as SBI and Bank of Baroda, are the low-cost leaders. They are the best for students with strong merit who want the lowest possible interest rates and eligibility for government subsidies. While they have digitized via the Vidya Lakshmi Portal, their approval times still average 15–25 days, and they remain strict about collateral for loans exceeding ₹7.5 Lakhs.
Private Sector Banks like HDFC and ICICI act as "Efficiency Experts." They offer a balance of reasonable rates and fast service, often providing pre-approved loans for existing customers in as little as 72 hours. They are ideal for students heading to well-known international universities who want an integrated package including Forex cards and student bank accounts. Finally, Specialized Education-NBFCs like HDFC Credila and Avanse have revolutionized the market by focusing on "future employability" rather than current assets. They are the champions of high-value unsecured loans, offering up to ₹80 Lakhs without collateral, though they charge the highest interest rates and processing fees.
How Can Students Navigate the Vidya Lakshmi Portal for Multi-Application Management?
The Vidya Lakshmi Portal is the ultimate aggregator for the modern student. In 2026, it has been integrated with the PM-Vidyalaxmi Digital Rupee App, allowing students to track applications and receive interest subsidies directly into a digital wallet. The heart of the portal is the Common Education Loan Application Form (CELAF). This form allows a student to enter their academic and financial data just once and then apply to up to three different banks simultaneously.
This "one form, multiple banks" strategy is critical for managing timelines. By applying to one PSU bank for a low rate and one private bank or NBFC for speed, a student ensures they have at least one sanction letter in hand for their visa interview. The portal also serves as a grievance redressal hub; if a bank fails to respond within the mandated 15-30 days, the student can raise a formal complaint that is monitored by the Ministry of Finance. This centralized system ensures that banks remain accountable to the student’s academic deadlines.
How Does the "At Home" Gold Loan Model Facilitate Urgent Fee Payments?
For the student facing a "No-Time-to-Wait" crisis, the "Gold Loan at Home" service has become an essential tool. This model is engineered for speed, bypassing the traditional branch visit. A student or parent can book an appointment via a mobile app, and in 2026, a "Gold Manager" typically arrives at the doorstep within 30 to 60 minutes. Using portable XRF technology, the executive verifies the purity of the gold (18K to 24K) and weight in the borrower's presence.
Once the valuation is accepted, the funds are transferred instantly via IMPS or UPI. This allows for immediate fee payment on a university portal, which is crucial when a "Seat Acceptance" window is closing. Because this is an asset-based loan, no income proof or CIBIL check is required. The lender takes responsibility for the gold’s safety, using GPS-tracked, insured bags to transport the assets to a secure vault. This "Phygital" approach—combining physical assets with digital speed—is the most efficient way to handle emergency admission costs.
What Are the Critical Differences Between Moratorium and Grace Periods?
A common point of confusion for borrowers is the difference between the Moratorium Period and the Grace Period. The Moratorium Period is the government-mandated "repayment holiday" that lasts for the duration of the course plus 6 to 12 months. During this time, the student is not required to pay the principal. However, interest still accrues unless the student is covered by the CSIS subsidy. In 2026, many banks also offer a "Job Trigger," where the moratorium ends 6 months after the student secures employment.
The Grace Period is a much smaller buffer, usually 15 to 30 days post-graduation or post-due date, designed to prevent late payment fees and credit score damage. The way a student handles the moratorium determines their financial health at age 25. Opting for a "Full Moratorium" where no payments are made leads to "Interest Capitalization," where the accrued interest is added to the principal, resulting in a much higher EMI. The most recommended strategy is the "Simple Interest" path, where the student or co-borrower pays only the monthly interest during college to keep the principal amount flat.
How Can Students Leverage Gold Loans as Strategic Bridge Financing?
Gold loans are frequently used as "Bridge Financing"—a tactical move to cover short-term gaps. Many premier universities give students a very narrow window, sometimes just 48 to 72 hours, to pay a deposit. Since traditional loans take weeks to disburse, the gold loan provides the immediate liquidity needed to secure the seat. Once the traditional education loan is eventually sanctioned and disbursed, the student can use a portion of those funds—or their family savings—to close the gold loan and reclaim their assets.
This strategy is also useful for meeting visa requirements. Countries like the UK or Canada require proof of "ready liquidity." A gold loan can provide that cash balance in a bank account instantly. Since the RBI’s 2026 rules allow for a Tiered LTV, students borrowing under ₹2.5 Lakhs for bridge needs can get up to 85% of their gold's value. This ensures they don't have to pledge more gold than absolutely necessary for the short-term "sprint" of admission season.
Why Do Interest Rates Vary by University Tier and Field of Study?
In 2026, lenders use a "Risk vs. Reward" correlation to set interest rates. Tier-1 institutes like IITs, IIMs, and BITS have a legacy of 100% placement records, making their students "Low Risk." Consequently, they receive the lowest rates, often just 0.5% to 1% above the bank's base rate. Tier-2 and Tier-3 institutes, having less consistent placement records, are seen as "High Risk," leading lenders to charge a higher interest margin to protect against potential defaults.
The Field of Study is also a factor in what lenders call the "Employability Score." STEM and Management (MBA) degrees are viewed as high-demand skill sets with immediate post-graduation liquidity, thus attracting "Prime" rates. Humanities and Fine Arts may have a slightly higher rate or require a stronger co-borrower profile because banks perceive a longer "gestation period" before the graduate reaches a high salary bracket. Specialized medicine, however, often receives preferential treatment because of the guaranteed career stability, despite the long duration of the course.
Why is a Gold Loan More Efficient than a Property-Backed Loan for Urgency?
The choice between a gold loan and a property-backed loan often comes down to speed versus volume. Property-backed loans involve a "Document Jungle," requiring a 30-year chain of deeds, encumbrance certificates, and building plans. The legal and technical verification alone can take 15 to 30 business days. Furthermore, the file must travel through central regional hubs for approval.
Gold loans, however, bypass this bureaucracy. The valuation is performed on-the-spot by in-house assayers using ultrasonic technology. Most bank branches in 2026 are "Gold-Enabled," giving the local Branch Manager the authority to sanction the loan immediately. While property loans are better for massive amounts over ₹50 Lakhs, gold loans are the undisputed champion for urgent needs up to ₹10-20 Lakhs. They turn a static asset in a locker into "living capital" at the speed of a digital transfer, ensuring a student never misses an admission deadline.
What is the Science Behind Gold LTV Ratios and Purity?
The Loan-to-Value (LTV) ratio is the formula that determines how much cash you can get for your gold. In 2026, the RBI utilizes a Tiered Structure: 85% LTV for loans under ₹2.5 Lakhs, 80% for loans up to ₹5 Lakhs, and 75% for larger amounts. Lenders do not use the spot price of gold but rather a 30-day moving average of the closing price of 22-karat gold as reported by the IBJA (India Bullion and Jewellers Association).
Purity is the primary multiplier. While 24K gold (coins) gets the full rate, 22K is the industry benchmark for ornaments. If you pledge 18K jewelry, a "purity haircut" is applied to account for the lower gold content. Additionally, lenders only value the "Net Weight." This means all diamonds, rubies, pearls, and even the wax filling (lac) inside bangles are excluded. A necklace that weighs 50g on a standard scale might only be valued as 40g of gold after the stones are deducted. Understanding this prevents surprises during the valuation process.
How Can Borrowers Maximize Tax Benefits Under Section 80E?
Section 80E of the Income Tax Act is a powerful tool for reducing the "real" cost of a loan. It allows for a 100% deduction of the interest paid on an education loan from the borrower's taxable income. Unlike Section 80C, which has a cap, Section 80E has no upper limit. This benefit is available for 8 consecutive years, making it essential to time your repayment strategically. In 2026, these benefits are only available under the Old Tax Regime, so borrowers must choose their tax filing status carefully.
The deduction can be claimed by the person responsible for repayment—whether that’s the student, a parent, or a spouse. Even gold loans are eligible for 80E, provided the funds were used strictly for higher education and the loan was sourced from a Scheduled Bank. By downloading the "Interest Certificate" from the bank’s portal each April, a borrower in the 30% tax bracket can effectively save nearly one-third of their interest costs, significantly lowering the overall financial burden of the degree.
What Are the Best Practices for Loan Repayment and Asset Retrieval?
Repayment in 2026 has become more flexible with the introduction of "Step-Up" plans. These allow fresh graduates to start with lower EMIs that increase as their salary grows, preventing a "salary squeeze" in the early years of their career. For gold loans, borrowers can choose "Bullet Repayment," where nothing is paid monthly, and the entire amount is settled in a single shot at the end of the 12-month tenure.
Retrieving assets is also strictly regulated to protect the borrower. Under the 7-Day Rule, a lender must return the pledged gold ornaments within 7 working days of the loan being closed. If they delay, they are liable to pay a daily penalty to the borrower. Finally, the "Prepayment" strategy remains the best way to save money. Since most Indian education loans have zero foreclosure charges, using a year-end performance bonus to make a part-payment toward the principal can reduce a 15-year tenure by several years, saving lakhs in compounded interest.
Frequently Asked Questions (FAQs)
Can I apply for an education loan before I get my final admission letter? Yes, many private banks and NBFCs offer "Pre-admission Sanction Letters." These are based on your academic profile and entrance scores (like GRE or CAT) and can be used to prove your financial capability during the early stages of the admission process.
Is the CSIS interest subsidy available for postgraduate studies in Humanities? No, the CSIS scheme is specifically targeted at professional and technical courses. While postgraduate studies are covered, they must fall under the approved list of technical and professional degrees, such as an MBA, M.Tech, or Medical PG.
What is the difference between Simple Interest and Compound Interest during the moratorium? Simple interest is calculated only on the principal amount you borrowed. If you pay this monthly, your debt remains flat. If you do not pay, the bank adds that interest to the principal at the end of your studies, and you then pay "interest on interest" (compound interest), which significantly increases your EMI.
Can a sibling be a co-borrower for an education loan? Yes, siblings are considered "Primary Co-applicants" by most lenders. However, the bank will still assess their income stability and CIBIL score to ensure they have the capacity to repay the loan if the student cannot.
How do I claim the Section 80E tax deduction if I am working and paying my own loan? You can claim the deduction while filing your Income Tax Return (ITR). You will need an "Interest Certificate" from your bank showing the total interest paid during the financial year. This amount is then subtracted from your gross total income before tax is calculated.
