A student loan is money borrowed from a bank or financial institution to help pay for your education. It covers costs like tuition fees, hostel charges, books, travel, and sometimes even a laptop or other study-related expenses. You don’t have to repay the loan while you’re studying. The repayment usually starts after you complete your course and get a job.
Why Do Students Take Loans?
Many families find it difficult to pay the full cost of higher education, especially for professional courses or studies abroad. That’s where student loans help. Instead of putting pressure on parents or delaying education, students can take a loan and pay it back later in easy monthly installments.
Types of Student Loans
There are mainly two types:
- Loan for studies in India – for courses like engineering, medical, MBA, or any graduation/post-graduation course in an Indian college.
- Loan for studying abroad – for students going to countries like the USA, UK, Canada, Australia, etc. These loans are usually for a higher amount and may also cover living and travel costs.
Important Things to Know
You must have confirmed admission in a recognized college or university.
Most banks ask for a co-applicant (usually your parent or guardian).
If the loan amount is high (generally above ₹7.5 lakh), banks might ask for collateral – like property documents.
There is something called a moratorium period. This means you don’t need to repay the loan during your course plus 6 to 12 months after finishing it.
After the moratorium, you need to start paying the EMIs (monthly installments).
Who Can Apply?
You must be an Indian citizen.
You should have got admission in a recognized institution (India or abroad).
You or your co-applicant must show income proof if required.
Documents You’ll Need
When applying, you’ll need:
Your admission letter from the college
ID and address proof
Mark sheets or certificates of your past studies
Income documents of your parents (like salary slips or income tax returns)
Property documents if collateral is required
What About Interest Rates?
Interest rates for student loans usually range between 8% and 13%. Some banks offer lower rates for top institutions or female students. While you are studying, interest is added to your loan but you don’t have to pay it immediately unless you choose to.
Government Help
There are also some government schemes that help students from low-income families by paying the interest during the moratorium period. This means the student only starts repaying after getting a job.
Which Banks Offer Student Loans?
Almost all major banks like SBI, Axis Bank, Bank of Baroda, PNB, and private lenders like HDFC Credila offer education loans. You can apply online or visit the bank to understand the process.
Final Thought
A student loan is a great support if you dream of higher education but are worried about money. If you study well and get a good job, repaying the loan becomes easier. But before taking a loan, make sure you understand the terms, interest, and repayment schedule clearly.
