Education loan questions, answered

A secured loan is backed by collateral — residential or commercial property, a fixed deposit, or securities. Because the lender's risk is lower, rates start around 6.9% and sanctions run up to ₹4 crore. An unsecured (collateral-free) loan needs no pledge, so lenders price the extra risk in: bands run from about 6.95% to 14%, with NBFCs typically above 10%.

Public banks sanction ₹40–50 lakh collateral-free for strong profiles and premier institutions. Private banks go up to ₹1–3 crore, NBFCs up to ₹1–2 crore, and international lenders such as Prodigy Finance and MPOWER up to roughly ₹95 lakh with no Indian co-applicant.

Every Indian bank and NBFC loan needs a co-applicant — usually a parent, but a sibling, spouse or close relative works. Their income stability and CIBIL score is the single biggest lever on your final interest rate. International lenders lend without an Indian co-applicant.

The moratorium is the window during which you do not pay EMIs — typically the course duration plus 6 to 12 months. Interest still accrues; paying simple interest during the moratorium reduces your total outgo materially.

Tuition and university fees, living expenses and accommodation, airfare, laptop and study material, health insurance, exam and visa fees, and in most cases a study-tour or project component.

Under Section 80E of the Income Tax Act, the entire interest paid on an education loan is deductible from taxable income for up to 8 years starting the year repayment begins. There is no upper limit on the interest amount claimed.

Public banks typically take 10–21 working days from a complete file, private banks 7–15 days, and NBFCs and international lenders 5–10 days. Pre-approval on Path Navigator is instant based on your profile inputs.

A sanction letter is accepted as proof of funds for Canada, UK, Australia and most European destinations. USA F-1 applicants should carry the sanction letter along with the I-20 and bank statements to the visa interview.

Most lenders allow prepayment with no penalty on floating-rate loans after the moratorium. Refinancing to a lower rate is common 12–24 months after disbursement once you have a repayment record or once collateral becomes available.

Margin money is the share of total cost you fund yourself — usually nil below ₹7.5 lakh, and 10–15% above it for overseas study. Scholarships and assistantships can be counted towards margin at most lenders.