On this page
The admission letter has arrived and the fee deadline is close. India now has a single government portal for education loans, so you no longer need to visit bank after bank with a folder of photocopies.
How do you apply for an education loan in India?
The Press Information Bureau's PM-Vidyalaxmi backgrounder, published on 29 July 2026, lists six official steps on the PM-Vidyalaxmi portal:
Register and create a profile using your Aadhaar ID.
Fill the Common Education Loan Application Form (CELAF).
Choose up to three banks.
Upload your academic and KYC documents, income certificate, entrance exam result, admission letter and fee structure.
Track the status of each application online.
After the bank sanctions and pays out the loan, apply for interest subvention if you qualify.
The portal handles all kinds of education loans, not just PM-Vidyalaxmi ones: it received 645,514 applications in 2025-26, according to the same backgrounder.
What documents do you need for an education loan?
Each bank sets its own list; SBI's student loan page is a useful template. Keep these scanned:
Proof of admission: offer letter, admission letter or college ID card
Schedule of expenses for the course (the college's fee structure)
Class 10 and 12 mark sheets and the entrance exam result
Identity and address proof, and PAN, for the student and the parent who will be co-borrower
The co-borrower's income proof: latest salary slip, Form 16 or income tax return
A family income certificate, needed for the interest subsidies below
For bigger loans that need security: property title documents and an asset-liability statement
Do you need collateral for an education loan?
Under PM-Vidyalaxmi, students admitted on merit to a listed Quality Higher Education Institution (QHEI) can borrow without collateral or a guarantor, with no fixed upper limit (the amount follows fees, hostel and living costs), according to the PIB backgrounder. The list covers institutions in the top 100 of NIRF's overall, category or subject rankings, the top 200 state government institutions and all other central government institutions: 1,425 institutions so far. Management quota and NRI quota admissions are excluded. The interest rate is capped at the bank's external benchmark lending rate (EBLR) plus 0.5%.
For an ordinary bank loan, the older rules apply. At SBI, according to its student loan page, loans up to ₹7.5 lakh need only a parent or guardian as co-borrower, while loans above ₹7.5 lakh also need tangible collateral such as property.
Which interest subsidy can you get on an education loan?
The PIB backgrounder describes two schemes, both claimed through the same portal:
PM-USP CSIS: for families earning up to ₹4.5 lakh a year, the government pays all the interest during the moratorium on loans up to ₹10 lakh for technical or professional courses at accredited or approved institutions.
PM-Vidyalaxmi: for families earning up to ₹8 lakh a year, it pays 3 percentage points of interest during the moratorium on loans up to ₹10 lakh, for any degree or diploma course at a listed institution. Up to 1 lakh new students can get it each year.
The moratorium is the course period plus one year; repayment can then run for up to 15 years. You cannot claim either subsidy if you also receive a central or state scholarship or fee reimbursement, so compare first; our guide to scholarships for science students in India can help.
A worked example (our calculation, for an imaginary student). Riya joins a four-year BTech at a listed institution; her family earns ₹6 lakh a year. She borrows ₹2 lakh at the start of each year. Her balance is 2, 4, 6 and 8 lakh during the course, then 8 lakh in the moratorium year: 28 lakh-years in all. At 3% simple interest, the subvention is about ₹84,000 before her first instalment. Real figures depend on disbursement dates.
When should you apply for an education loan?
Before results: collect PAN, Aadhaar, the co-borrower's income tax returns and the income certificate.
The week your seat is allotted: apply on the portal to up to three banks. Our explainer on JoSAA counselling for parents shows when allotment letters arrive.
Before the fee deadline: chase the sanction and sign.
After disbursement: claim the subvention.
Every year: keep your marks up. From the second year, the subsidy depends on satisfactory academic performance, according to the PIB backgrounder.
At the branch, ask: "Is this a PM-Vidyalaxmi loan? What is the rate over EBLR? Do you pay the college directly? Is there a discount if we pay interest during the course?"
Our guide to your first semester at science or engineering college explains what changes in year one. If a topic you missed in school is holding you back, Fermi's AI tutor works out what you already know and builds a plan for the session, so you can fill that gap before exams.
