What Is a Student Loan?
A Student Loan is a financial solution designed specifically to help students pay for higher education expenses such as tuition fees, accommodation, books, travel, and exam-related costs. In 2026, student loans have become more flexible, digital, and accessible.
Student loans focus on long-term career development and usually offer lower interest rates and deferred repayment options.
Key Features of Student Loans in 2026
- Designed exclusively for students
- Lower interest rates than personal loans
- Moratorium during course duration
- Flexible repayment tenure
- Tax benefits on interest paid
- Loans available for domestic and international education
Student Loan Interest Rates 2026
Interest rates vary based on lender type, institution ranking, loan amount, and co-applicant profile.
| Lender Type |
Interest Rate (p.a.) |
Maximum Loan Amount |
Tenure |
| Public Sector Banks |
8.00% – 10.75% |
₹20 – ₹40 lakh |
Up to 15 years |
| Private Banks |
9.50% – 13.50% |
₹50 lakh+ |
Up to 15 years |
| NBFCs |
10.50% – 15.50% |
₹75 lakh+ |
Up to 12 years |
Student Loan Eligibility Criteria
- Indian citizen or eligible NRI
- Admission confirmation from a recognized institution
- Co-applicant with stable income
- Good academic background
- Co-applicant credit profile considered
Documents Required for Student Loan
- Student identity and address proof
- Co-applicant KYC documents
- Admission letter and fee structure
- Academic certificates
- Income proof of co-applicant
- Collateral documents (if applicable)
Student Loan EMI Example
If you take a student loan of ₹12,00,000 at 9.25% interest for 10 years:
- Monthly EMI: ₹15,200 (approx.)
- Total interest payable: ₹6,24,000 (approx.)
- Total repayment amount: ₹18,24,000 (approx.)
Advantages and Disadvantages of Student Loans
Advantages
- Affordable interest rates
- Deferred repayment option
- Tax benefits on interest
- Supports long-term career growth
Disadvantages
- Co-applicant is mandatory
- Long repayment tenure
- Collateral needed for higher loan amounts
How to Choose the Best Student Loan in 2026
- Compare interest rates and total loan cost
- Check moratorium and repayment structure
- Understand collateral requirements
- Review lender experience with student loans
- Evaluate tax and subsidy benefits
Frequently Asked Questions (FAQs)
When does student loan repayment start?
Repayment usually begins after course completion plus the moratorium period.
Is collateral required for student loans?
Collateral is required only for higher loan amounts depending on lender policy.
Can student loans be used for studying abroad?
Yes, student loans can be used for both domestic and international education.
Does a student need a credit score?
No, the co-applicant’s credit score is considered.
Are student loans tax deductible?
Yes, interest paid on student loans qualifies for tax deductions as per law.
Author: All Finance Store Research Team
Expertise: Student Finance & Education Loans
Last Updated: January 2026
Disclaimer: This page is for informational purposes only. Student loan terms, rates, and eligibility may vary by lender. Always confirm details with official lender sources before applying.