Education Loan in Kerala: Everything You Need to Know

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Education Loan in Kerala

Education Loan in Kerala: In today’s competitive world, education plays a pivotal role in shaping one’s future. Pursuing higher studies, whether in India or abroad, has become a dream for many students. However, the rising cost of education can sometimes be a significant hindrance. This is where education loans come to the rescue, providing financial assistance to students and their parents. In this article, we will explore the various aspects of education loans in Kerala, focusing on the loan limits, security requirements, repayment options, and interest rates.

What is an Education Loan?

An education loan is a financial product offered by banks and financial institutions to support students’ academic pursuits. It covers expenses related to tuition fees, books, accommodation, travel, and other study-related costs. Education loans enable students to focus on their studies without the burden of immediate financial expenses.

Education Loan Limits in India and Abroad

Education Loan Limits in India

For studying within India, education loans are available up to Rs. 10 lakhs. However, the loan amount is subject to course-wise caps, which may vary from one institution to another.

Education Loan Limits Abroad

Students aspiring to study abroad can avail education loans up to Rs. 20 lakhs, subject to course-wise caps. The loan amount depends on the country of study and the reputation of the educational institution.

Security Requirements for Different Loan Amounts

1. Loans up to Rs. 4 lakh

For education loans up to Rs. 4 lakhs, typically no security is required. However, the parent or guardian needs to be a joint borrower, and the assignment of the student’s future income may be necessary for payment of installments.

2. Loans above Rs. 4 lakh and up to Rs. 7.5 lakh

For loans above Rs. 4 lakhs and up to Rs. 7.5 lakhs, the parent or guardian must be a joint borrower. Additionally, a third-party guarantee with sufficient net worth to cover the loan amount or equitable mortgage of landed property with adequate value may be required. The assignment of the student’s future income for installment payment is also applicable.

3. Loans above Rs. 7.5 lakh

For education loans exceeding Rs. 7.5 lakhs, the parent or guardian must be a joint borrower. Moreover, an equitable mortgage of landed property with a value covering at least 150% of the loan amount is generally required. Similar to the previous cases, the assignment of the student’s future income for installment payment is applicable.

Repayment Period for Education Loans

The repayment period for education loans depends on the loan amount:

  • For loans above Rs. 7.5 lakhs, the maximum repayment period is 15 years.
  • For loans above Rs. 5 lakhs, the maximum repayment period is 10 years.

During the repayment period, the student or the parent is required to pay back the loan amount along with the applicable interest.

Interest Rates for Education Loans

Interest rates on education loans may vary from bank to bank. As of the latest data available, the interest rate for education loans is approximately 12.60%. However, students and parents are advised to check with their chosen lender for the most up-to-date interest rates.

FAQs (Frequently Asked Questions)

Which bank is best for education loan in Kerala?

UCO Bank is considered one of the best options for an education loan in Kerala, offering competitive interest rates and favorable terms to support students in pursuing their academic aspirations.

Are education loans only available for professional courses?

No, education loans are available for a wide range of courses, including undergraduate, postgraduate, and diploma programs.

Can the loan amount be used to cover other expenses apart from tuition fees?

Yes, education loans can be used to cover various expenses related to education, such as accommodation, books, travel, and other study-related costs.

What is the moratorium period for education loans?

The moratorium period is the time during which the student is not required to make loan repayments. It usually includes the course duration and an additional period after completing the course or getting a job.

Can I apply for an education loan without a co-applicant?

No, most education loans require a parent or guardian as a co-applicant to provide additional security.


Education is the key to unlocking one’s potential and achieving dreams. Education loans provide an opportunity for deserving students to pursue their desired courses without being weighed down by financial constraints. In Kerala, as well as the rest of India, these loans play a vital role in empowering the youth to shape a better future for themselves and the nation.

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