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Education Loans Directory

India's transparent, independent directory for student education loans. Covering all 38 Vidya Lakshmi partner bank schemes, central interest subventions (CSIS & PM-Vidyalaxmi), state student credit cards, and major bank Most Important Terms & Conditions (MITC).

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Vidya Lakshmi Portal

All 38 registered bank schemes

Govt Subsidies & Cards

CSIS, PM-Vidyalaxmi & State Cards

Private & NBFC Lenders

MITC verified product terms

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Moratorium:Course duration + 6 months

✦Private bank/NBFC commercial loan; not eligible for CSIS or state interest subvention.

Verified 2026-09-28

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Understanding Education Loans in India: The Complete Civic Guide

Everything students and parents need to know about collateral limits, moratorium rules, and government interest subvention schemes before applying.

1. Collateral Rules & CGFSEL Guarantee

Under the Indian Banks' Association (IBA) Model Education Loan Scheme, education loans up to ₹7.50 Lakh are strictly collateral-free. Public sector banks are prohibited from demanding third-party guarantees or property mortgages for amounts within this limit.

This risk is underwritten by the National Credit Guarantee Trustee Company (NCGTC) through the Credit Guarantee Fund Scheme for Education Loans (CGFSEL), which provides 75% default guarantee coverage to lending institutions.

2. Moratorium & Repayment Holidays

Education loans offer a mandatory moratorium period (course duration + 1 year, or 6 months after securing employment, whichever is earlier). During this window, borrowers are not required to pay principal EMIs.

However, simple interest accumulates unless serviced voluntarily. Banks offer a 1.00% interest rate rebate across the entire tenure if simple interest is serviced regularly during the study period.

3. Central Sector Interest Subsidies: CSIS vs PM-VIDYALAXMI

Under the Central Sector Interest Subsidy (CSIS), the Ministry of Education covers 100% of the interest payable during the moratorium for students whose annual family income is up to ₹4.50 Lakh enrolled in recognized professional/technical courses.

In late 2024, the Union Cabinet approved the new PM-VIDYALAXMI Scheme for students entering top 860 Quality Higher Education Institutions (QEIs), extending a 3% annual interest subvention for families earning up to ₹8.00 Lakh.

4. MITC: 5 Critical Clauses to Check Before Signing

Parent Co-Borrower Liability: Parents or guardians are legally joint borrowers; non-payment impacts both CIBIL scores.
Semester-Wise Disbursement: Funds are paid directly to the university semester-by-semester, subject to passing previous term exams.
Upfront Margin Money: For domestic courses above ₹4 Lakh, borrowers must deposit 5% margin (15% for overseas) before bank disbursal.
Processing Charges: Public banks waive fees for domestic study, while private NBFCs charge 1%–2% non-refundable fees.
Section 80E Tax Deduction: Full interest paid is tax-deductible for 8 consecutive assessment years with no upper cap.