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Cost is a challenge for many students when applying for higher education. For some students in India, that hurdle isn’t getting admitted – it’s affording tuition, accommodation, books and other academic expenses. Education loans can help bridge that affordability gap instead of requiring families to pay expensive costs all at once.
However, there isn’t a one-size-fits-all “best student education loan in India.” Your needs depend on where you study, your course, loan amount, collateral required, interest rate, annual family income and if you study in India or abroad.
Here’s an updated guide for students and parents on how to compare education-loan options in 2026. Happy applying!
Top Education Loan Options in India
1. State Bank of India (SBI)
State Bank of India offers multiple education loan products. SBI has education loan schemes like the SBI Student Loan Scheme and SBI Scholar Loan Scheme.
As of 9 June 2026, SBI quotes 9.90% interest rate on student loans without collateral up to ₹7.50 lakh. For loans above ₹7.50 lakh with collateral security, SBI lists a rate of 9.40%. Additionally, SBI gives a concession of up to 0.50% on interest rate for girl students. You’ll also find special concessional interest rates for students studying in specified premier institutions.
Keep in mind that this advertised rate changes based on the loan scheme and institution.
2. Bank of Baroda Education Loan
Bank of Baroda offers multiple education loan options ranging from Baroda Gyan to education loans for premier institutions.
Its lending structure links education loans to the Bank’s repo- linked benchmark. That means the spread over the benchmark changes depending on the institution, course, loan amount, security and more. Bank of Baroda also offers concessions to eligible female students under specific loan schemes.
Because of how schemes work, it’s important to check the exact education loan scheme and applicable spread instead of looking at a single interest rate headline.
3. ICICI Bank Education Loan
ICICI Bank offers education loans up to ₹3 crore depending on the student’s eligibility.
The bank publishes different rates depending on the course, institution attended, security and whether it’s a domestic or overseas education loan. Secured loans start at 8.50% for select domestic engineering and management institutes. Unsecured loans start at 9.25% for the same category. For overseas education, ICICI lists rates starting at 9% for secured loans. Unsecured loans start from 10.25%.
PM-Vidyalaxmi: A Government-Backed Route Students Should Check
Before students apply for a bank loan, check eligibility for PM- Vidyalaxmi. Under this education loan scheme, students who gain admission on merit into eligible Quality Higher Education Institutions(QHEIs) get access to collateral-free and guarantor-free loans. There’s no set maximum loan amount under the scheme. The sanctioned loan amount varies depending on qualified education expenses.
Students whose annual family income is up to ₹8 lakh might also get a subsidy of 3% interest on education loans of up to ₹10 lakh, depending on benefits available under the scheme.
Who Can Apply for an Education Loan?
Eligibility can differ slightly between lenders. But in general, students and/or parent/guardians can apply if they can show you:-
- You gained admission in a recognised college, university, or eligible professional course
- Meet the academic qualifications required by the lending institution
- Parent/guardian is available to act as co-applicant in most cases
- Proof of admission and course fees
- Documents that can help prove student and co-applicant’s income and identity
- Collateral to supply under the education loan product
For PM- Vidyalaxmi eligibility, students generally must get admission through a merit/open competitive examination and not through management quota or other categories. The scheme has its conditions and instructions that students must follow.
How to Apply for an Education Loan
Students can apply for education loans from multiple banks using the Vidya Lakshmi portal. Students can visit the portal to see available loan schemes. They key in simple details about their education loan application, submit documents and track their application status with partner banks. Multiple banks and education loan products are listed on the portal.
For applications to PM- Vidyalaxmi, follow the link on the official Vidya Lakshmi portal ( pmvidyalaxmi.gov.in ). Be wary of websites and people asking for money to process your loan. The official education loan portal clearly mentions that it doesn’t ask for money from applicants. It has a section on fraudulent links, QR codes and apps.
Benefits of an Education Loan
Education loans can let students and parents:-
- Pay academic expenses such as tuition fees
- Cover costs of hostel accommodation, living expenses and other expenses allowed under the loan product
- Attend and pay for higher education courses instead of paying full fees upfront
- Build a repayment history with structured payments
- Qualify for subsidised interest from the government if eligible
- Study in India or abroad, subject to the lender and educational program.
What Should Students Compare Before Choosing?
Students should look beyond the base interest rate. Check applicable interest rate, collateral, processing fees (if applicable), moratorium period, repayment tenure, prepayment conditions and total cost of repayment.
Loans with lower interest rates at first glance may not be cheaper after you consider additional fees and conditions.
Final Takeaway
It depends on the student. The details of your chosen course, the university you’re attending, how much you need to borrow, and your family’s financial situation are all important factors in the application process. The best student loans in India come from SBI, Bank of Baroda and ICICI Bank. But students should also look into PM Vidyalaxmi if eligible for borrowed funds and interest subsidies.
This article is for general information. Education-loan interest rates, eligibility, fees and scheme conditions can change. Always verify the applicable terms on the lender's official website or the Government of India's designated portal before applying.