Education Loans
Education loans are shaped by the IBA’s Model Education Loan Scheme (2022), with a tiered collateral structure: no collateral or guarantor up to ₹4 lakh, a guarantor (but no collateral) up to ₹7.5 lakh, and collateral required above that — though private lenders often extend collateral-free limits well beyond ₹7.5 lakh based on institution, course, and co-applicant profile. This guide covers what’s financed (tuition, accommodation, books/equipment, and study-abroad travel), interest rates (secured vs unsecured, benchmark-linked), and the moratorium period — where simple interest accrues during the course-plus-grace-period even though EMIs are paused, with a real choice between servicing this interest or letting it capitalise into the principal. We detail two distinct government interest-subsidy schemes (CSIS for economically weaker students in India, and the Dr. Ambedkar Central Sector Scheme for OBC/EBC students covering both India and study abroad), PSL classification, the Vidya Lakshmi common application portal, and Section 80E — the uncapped interest-only tax deduction available for 8 years from the start of repayment, for loans taken for the borrower, spouse, children, or legal wards.