What an Education Loan Typically Covers
- Tuition fees and examination charges
- Hostel or accommodation costs
- Books, equipment and study materials
- Travel expenses, for study abroad in some cases
Understanding the Moratorium Period
Most education loans offer a moratorium — a period during the course (plus a few months after) when full EMI repayment is not required. Some lenders may require interest-only payments during this period, while others defer everything. Terms vary, so confirm this with your specific lender.
Secured vs Unsecured Education Loans
Smaller loan amounts are sometimes offered without collateral, while larger amounts — especially for study abroad — may require collateral such as property or a fixed deposit, along with a co-applicant (often a parent or guardian).
What to Check Before Applying
- Whether the loan is collateral-free or requires security
- Interest rate type and any interest subsidy schemes you may be eligible for
- The total repayment tenure after the moratorium ends
- Processing fees and prepayment terms
Involve your co-applicant early — most lenders assess the household's combined repayment capacity for education loans.