The cost of higher education has risen significantly, both in India and abroad. Education loans are a way for many families to help a student pursue their educational and career dreams without financial strain. There is always one doubt that students and parents have – Which courses are eligible for education loans in India?
Banks and NBFCs (Non-Banking Financial Companies) offer loan facilities for numerous programs, professional courses like MBBS, BDS, BTech, MBA, Law, and Chartered Accountancy (CA), as well as postgraduate education, vocational training, and certain diploma and certificate courses. The value of an education loan only depends on whether the course the student plans to take after taking the loan is approved by bodies like the UGC, AICTE, MCI, etc., or authorized by the government (for both India and overseas).
Understanding which courses qualify is important because lenders only approve education loans for recognized and job-oriented programs. Whether you’re planning to study medicine, engineering, management, or skill-based courses, knowing the loan eligibility criteria can save you time, effort, and unnecessary rejections.
In this complete guide, we will discuss the list of eligible courses for education loans in India, we will outline all course requirements for the programs along with the differences between domestic education loans and overseas education loans. If you are wondering whether your dream course is eligible to be funded by education loans, or not, you will have the answer after reading this article.
Importance of education loans in India
With rising tuition fees in India and abroad, education loans have become a vital help for students who want to study an MBBS, MBA, BTech, law or an international degree. They ensure access to quality education because loans cover tuition fees, hostel charges and other related expenses so students don’t miss out on their career path because of financial barriers.
There are added benefits of education loans such as moratorium, flexible repayment, government subsidies and tax-deduction benefits of Section 80E. They are not just financial help for the students, they provide equal education opportunities to the students across all economic backgrounds and teach a certain amount of responsibility, letting students invest in their future with confidence.
General Eligibility Criteria for Courses Covered Under Education Loans
In India, education loans are for students who are studying courses that are recognized either domiciled in India or overseas. While every individual bank or NBFC may have their own criteria around the type of course they cover when approving education loan applications, there are some guidelines which lenders seem to follow.
- Recognized Institutions – The first requirement is that your course is being offered by a recognized university, college, or institute funded by UGC, AICTE, MCI, DCI, ICAR, or if you are doing overseas education, a reputable international organization.
- Eligible Courses – Education loans generally cover professional, technical and vocational courses at any level of qualification, including undergraduate, postgraduate, diploma and doctoral. Typical fields include medicine (MBBS, BDS), engineering (BTech, BE), management (MBA, PGDM), law, design, aviation or skill based credentials.
- Merit-based / Entrance – Students must have secured admission through a merit-based selection process, entrance exam, or qualifying criteria set by the institution.
- Age & Academic Record – Lenders ordinarily require Indian citizenship and lending to good academic track record. Some lenders will also have some minimum / maximum ages requirement.
- Full Time / Part time – Full-time courses are more widely covered, but select lenders also provide loans for part-time, distance learning, and executive programs, provided the institute has recognition.
Undergraduate Courses Eligible for Education Loan in India
Undergraduate education is one of the common stages for taking education loans by students and parents, particularly for professional and job oriented courses. Banks and NBFCs in India, would generally consider financing per education loan for degree and diploma programs, which provide good career opportunities and are recognized by initiatives or authorities in India like UGC, AICTE, MCI/NMC, DCI, ICAR and State Technical Boards.
Some of the popular undergraduate courses covered under education loans include:
- MBBS (Bachelor of Medicine, Bachelor of Surgery) – MBBS is one of the most pursued courses, and as all major expenses will be incurred, MBBS education can be quite expensive due to tuition fees, hostel fees, and clinical training fees. Almost all banks in India offer loans for MBBS in India and abroad as long as medical college is recognized by Medical Council of India (now NMC).
- BDS (Bachelor of Dental Surgery) – Dental studies are also widely accepted as a professional course with a clear healthcare career option.
- BTech/BE (Bachelor of Technology/Bachelor of Engineering) – Engineering programs in all streams like Computer Science, Mechanical, Civil, Electrical, and Electronics are all accommodated if the institution is approved by the AICTE/UGC.
- BSc Nursing & Allied Health Sciences – The courses of Nursing, Physiotherapy, Occupational Therapy and other allied medical sciences are in demand due to employment opportunities available.
- BBA/Integrated Management Programs – Management is more common at the postgraduate level of study from a lending perspective, however, many lenders will fund BBA and integrated MBA programs when pursued from reputable institutions.
- Law (BA LLB, BBA LLB, BSc LLB) – For integrated law programs of 5 years duration from institutions recognized by the Bar Council of India (BCI), loans can be obtained.
- Other Professional & Vocational Courses – Design, Hotel Management, Agriculture, Veterinary Sciences, Chartered Accountancy (with recognised institutions), and Aviation are programs that are funded.
- Education loans for undergraduate studies usually cover tuition fees, examination charges, library/lab fees, books, equipment, and hostel expenses, ensuring financial support for a student’s entire course duration.
Postgraduate Courses Eligible for Education Loan
Postgraduate education is typically more expensive, as additional monetary investment is involved in specialized training and a greater opportunity to engage with advanced research. In India, banks and NBFCs financially support education loans that recognize postgraduate programs offered by recognized universities and institutions in India and abroad. These courses are also positioned as career enhancing which makes them more eligible for support from an education loan.
Some of the key postgraduate courses covered under education loans include:
- MD/MS (Doctor of Medicine/Master of Surgery) – Continuing medical education after MBBS is one of the most expensive courses and loans can be generally offered for MD/MS in India and abroad as long as you have a NMC recognized institution.
- MDS(Master of Dental Surgery) – Specialized post-graduate programs in dentistry are also supported as these have a professional scope.
- MBA/PGDM (Master of Business Administration/Post Graduate Diploma in Management) – Management Programs from reputed institutions, such as IIMs, ISB, and AICTE/UGC approved colleges are the most popular courses that are supported.
- MTech/ME (Master of Technology/Engineering) – Technical specialization after engineering is supported, especially if pursued in IITs, NITs, or globally recognized universities.
- MSc Nursing & Allied Health Sciences – Postgraduate healthcare programs such as Nursing, Physiotherapy, and other allied sciences are included.
- Postgraduate Law Courses (LLM, Specialized Legal Studies) – Recognition by institutions recognized by Bar Council of India (BCI) ensures education loan eligibility.
- Other Postgraduate Courses – Since there are postgraduate qualifications in Agriculture, Veterinary Sciences, Pure Sciences, Social Sciences, Fine Arts, International Studies etc. which lenders now support, if there is a strong career pathway.
Educational loans for graduate programs usually cover tuition fees, common fees for exams, research or project expenses, cost of the books, equipment, hostel fees and travel expenses payable when traveling abroad (for educational purposes), allowing a student to follow an academic dream without financial strain.
Expenses Covered by Education Loans
Education loans in India allow borrowers to cover not only tuition fees but a range of academic related expenses, the objective is to provide peace of mind to students through financial worry, thereby enabling them to focus on their study. Education loans will primarily cover tuition fees, examination fees, library fees, lab fees, hostel or accommodation fees, etc. If borrowed for study courses abroad, travel expenses, visa fees, and insurance cost may be included.
Education loans will also accommodate important academic oriented needs like the costs of books, uniforms, laptops, study equipment, project, or research expenses. If seeking education loans for professional and technical courses, students can include expenses related to internship, study tours, thesis work, etc. This complete coverage ensures that a student receives financial assistance during the duration of the course being undertaken, whether studying in India or abroad.
How to Check If Your Course is Eligible for Education Loan?
It is important to always check if your course is eligible for education loans before taking the first step. Education loans are offered by most banks and NBFCs for valid undergraduate, postgraduate professional and diploma courses. To check if your course is valid, it is essential to view the list of courses on the lender’s website or the profile loan brochure, once that is confirmed it is best to also check that your college or university is approved by the UGC, AICTE, MCI or other Indian regulatory bodies, or on the accredited list of institutions abroad.
The best way is by contacting through the education loan officer in the referenced bank or NBFC, alternatively you can go online to loan portals matching the eligibility of your course and institution with loan schemes available around you. Most lenders today offer digital tools allowing you to put in course details, university and country / overseas if that be the case, and matching this criteria to relevant loans.
Which Bank offers Education Loans?
Different banks in India provide loans for a wide range of courses, both in India and abroad. Below is a summarized table showing major banks and the courses they typically cover:
| Bank / Lender | Courses Eligible for Education Loan | Notes / Special Features |
|---|---|---|
| State Bank of India (SBI) | Undergraduate & Postgraduate courses, MBBS, BDS, Engineering (BTech), MBA, MCA, Hotel Management, Law, ITI/Diploma, Professional courses abroad | Provides collateral-free loans up to ₹10 lakh, margin money & flexible repayment options |
| HDFC Credila | MBBS, BDS, Engineering, MBA, MCA, Management, Hotel Management, Arts & Science courses abroad | Specializes in loans for foreign studies, offers higher loan amounts without collateral for top-ranked institutions |
| Punjab National Bank (PNB) | MBBS, BDS, Engineering, MBA, Management, Technical & Professional courses | Offers concessional interest rates for meritorious students and collateral-free loans up to ₹7.5 lakh |
| Canara Bank | Undergraduate & Postgraduate courses, Professional courses, MBA, Engineering, Medicine, Abroad studies | Supports Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for collateral-free loans |
| ICICI Bank | MBBS, BDS, Engineering, Management, MCA, Hospitality, Arts & Science courses abroad | Offers customized loans for foreign education with flexible repayment tenure |
| Axis Bank | MBBS, BDS, Engineering, MBA, Law, Hotel Management, Arts & Science courses abroad | Offers loans for students admitted to top-ranked institutes in India and abroad with flexible EMI options |
| Bank of Baroda (BoB) | Undergraduate & Postgraduate courses, Professional courses including MBBS, Engineering, MBA | Provides loan coverage for recognized institutions in India and abroad, with collateral-free loans up to ₹7.5 lakh |
Documents Required for Education Loan Application
Applying for an education loan in India requires submitting specific documents to verify your identity, academic eligibility, financial status, and the purpose of the loan. Banks may vary slightly in their requirements, but generally, the documents can be categorized into four main types:
- PAN Card
- Aadhaar Card
- Passport / Voter ID / Driving License
- Recent Utility Bills
- 10th and 12th Mark Sheets
- Graduation/Postgraduate Mark Sheets (if applicable)
- Admission Letter / Fee Structure from College/University
- Entrance Exam Scorecards (if applicable)
- Co-applicant’s Income Proof
- Bank Statements
- Property Documents or Collateral Papers
- Completed Loan Application Form
- Any Other Bank-Specific Requirement
Tips for Parents and Students Before Applying
Taking an education loan is a huge financial commitment, so it makes sense to do your homework beforehand so that the whole process runs smooth and you benefit the most. Here are important things to keep in mind:
1. Explore Loan Options In Depth
Make sure you explore various banks and NBFCs to find out about their interest rates, repayment tenures, processing fees, and collateral requirements if any. Do not just approach the obvious public banks like SBI or PNB; look at private lenders such as HDFC Credila or ICICI Bank. The same course could have slightly different benefits.
2. Assess Total Cost of Education
Do not just look at the tuition fees, look at total cost. This includes hostel/PG charge, travelling expense, books, and insurance etc. These costs should be considered living expenses as you will spend money to live while studying. If you apply for the right loan amount at the start, it will help you figure out the total amount you need so that you avoid running short on money during your studies.
3. Confirm Eligibility and Documentation
Make sure that you know what eligibility is required of you and the co-applicants criteria. Before applying, keep all documentation in one place and make sure you have everything required like: admission letter, mark sheets, identity proof, income statements etc. Make sure you have all documentation in place before applying as indenting to apply with incomplete documents can stall process.
4. Repayment Planning
Make sure to understand the EMI numbers you will have to bear, the moratorium period and the interest structure. Discuss with your child the repayment process so that both you and your child do not default only to have your memory of studying ruined by credit scores being negatively affected.
5. Consider Tax Benefits
It is useful for Parents and students to know about Section 80E of the Income Tax Act. It is a tax deduction for the interest on education loans. If the repayments are planned well during the deduction period (up to 8 years) – taxpayers will maximise their tax savings for their interest expense.
6. Co-Applicant Awareness
Parents/guardians that co-apply for loans should be aware of their obligations and liabilities with the loan. They should assess their own repayment capacity, and ensure that the loan does not adversely impact their own financial situation or credit rating.
7. Use Digital Portals Wisely
Portals like PM-Vidyalaxmi simplify loan applications and interest subsidy claims. Students and parents should use these platforms to track applications, submit documents digitally, and stay updated on loan status.
FAQs: Which Courses Are Eligible for Education Loan in India
Q. What courses are generally eligible for education loans in India?
A. Undergraduate, postgraduate, and professional courses like MBBS, BTech, MBA, Law, and more are eligible for education loans from banks and financial institutions.
Q. Can diploma or certification courses get education loans?
A. Only professional or technical diploma courses recognized by government bodies may qualify. Short-term certificate courses are generally not eligible.
Q. Are online courses or distance education programs eligible?
A. Only full-time online courses from recognized institutions are eligible; many banks do not cover distance education.
Q. Is it necessary for the institution to be recognized?
A. The institution has to be approved by the AICTE, UGC or any other appropriate regulatory body in India or abroad.
Q. Can parents apply on behalf of their children for eligible courses?
A. Parents or guardians can co-apply for the education loan while applying for the eligible course under respective bank norms
Q. Are education loans for MBBS and medical courses different from other courses?
A. As medical courses (e.g., MBBS ) generally have a higher loan amount due to higher fee structure, banks may also ask for additional documentation such as admission letters and council approvals etc.
Q. What is the role of collateral in loan eligibility?
A. For higher loan amounts documentation (generally more than Rs. 7.5 -10 lakh) must be posted as collateral, if you go for secured loans your collateral can be property, fixed deposits, or government bonds but you also have a government scheme while previously mentioned also allow collateral free loan.
Q. What are the technical criteria for claiming interest subvention under government schemes?
A. Students must register on official portals like PM-Vidyalaxmi, provide Aadhaar-based authentication, and meet family income thresholds to avail interest subsidy during the moratorium period.