RBI Education Loan Guidelines 2025

Overview of RBI Education Loan Guidelines

The Reserve Bank of India (RBI) regulates education loans through the Model Education Loan Scheme (MELS) 2022, ensuring accessibility for students pursuing higher education in India and abroad. SBI, via Loanpao, offers education loans starting at 7.00% p.a., adhering to these guidelines for simplified processes and fair terms.

Key RBI Guidelines for 2025

RBI’s guidelines ensure student-friendly loan processes:

• Simplified Application: Banks must streamline applications with transparent terms and minimal documentation.
• No Collateral for Small Loans: Loans up to ₹4 lakh require no collateral or guarantor. Loans between ₹4–7.5 lakh need a third-party guarantor.
[](https://fly.finance/blog/education-loan/rbi-guidelines-for-education-loan/)[](https://www.gconnect.in/education/rbi-collateral-free-education-loans-guide.html)
• Loan Limits: Up to ₹10 lakh for studies in India and ₹20 lakh for abroad under Priority Sector Lending; SBI offers up to ₹1.5 crore for international studies with collateral.
[](https://www.tatacapital.com/blog/loan-for-education/rbi-guidelines-for-education-loan/)
• Moratorium Period: Course duration plus 6–12 months, with extensions allowed for financial difficulties. Interest accrues during this period.
[](https://propelld.com/site/blog/rbi-guidelines-for-education-loans)[](https://www.tatacapital.com/blog/loan-for-education/understanding-education-loan-repayment-rules-in-india/)
• Interest Rates: Linked to MCLR (9.05% as of March 2025) or EBLR, with SBI rates starting at 7.00% p.a. for secured loans.
[](https://sbi.co.in/web/interest-rates/interest-rates/loan-schemes-interest-rates/education-loan-scheme)
• No Location-Based Rejections: Banks cannot reject loans based on the applicant’s residence.
[](https://fly.finance/blog/education-loan/rbi-guidelines-for-education-loan/)
• Interest Subsidies: Available under schemes like PM-Vidyalaxmi for students with family income up to ₹8 lakh, offering 3% subvention on loans up to ₹10 lakh.
[](https://www.education.gov.in/scholarships-education-loan-4)

SBI Education Loan Schemes

SBI’s education loan offerings via Loanpao align with RBI guidelines:

Note: Rates are linked to MCLR (9.05% as of March 2025). No processing fees for loans up to ₹10 lakh until June 30, 2026.

Eligibility for SBI Education Loans

Key eligibility criteria include:

• Nationality: Indian citizens or OCI cardholders.
[](https://www.lorien.finance/blog/rbi-guidelines-study-abroad-loans)
• Admission: Secured admission to recognized institutions via entrance tests or merit-based selection.
[](https://fly.finance/blog/education-loan/rbi-guidelines-for-education-loan/)
• Age: 18–35 years.
• Credit Score: Co-borrower’s CIBIL score of 650 or higher for unsecured loans.
[](https://www.unionbankofindia.co.in/en/listing/educational-loan)
• Academic Record: Consistent academic performance, with relaxed criteria (50%) for SC/ST applicants.
[](https://caravanmagazine.in/education/banks-repeatedly-violate-rbi-scircular-deny-student-loans-citing-parents-credit-score)

Documents Required

Essential documents for SBI education loans:

• Identity Proof: PAN, Aadhaar, Passport.
• Admission Proof: Offer letter from recognized institution.
• Income Proof: Co-borrower’s salary slips, Form 16, or bank statements.
• Collateral (if applicable): Property documents, FDs, or LIC policies for loans above ₹7.5 lakh.
[](https://www.elanloans.com/blogs/rbi-guidelines-for-abroad-education-loans)
• Others: Fee structure, passport-sized photo.

How to Apply with Loanpao

Loanpao simplifies the application process:

1. Visit Loanpao’s platform and select education loan options.
2. Complete digital eligibility check using Aadhaar and PAN.
3. Upload KYC, admission, and income documents via secure portal.
4. Receive instant pre-approval; disbursal within 48–72 hours.

Tip: Use Loanpao’s portal to track application status and access PM-Vidyalaxmi subsidies.

Benefits of SBI Education Loans

Key advantages include:

• Collateral-Free Loans: Up to ₹7.5 lakh without security.
[](https://www.gconnect.in/education/rbi-collateral-free-education-loans-guide.html)
• Low Rates: Starting at 7.00% p.a. for secured loans.
• Flexible Tenure: Up to 15 years with moratorium period.
• Tax Benefits: Deductions on interest paid under Section 80E for up to 8 years.
[](https://www.lorien.finance/blog/rbi-guidelines-study-abroad-loans)
• Digital Process: Seamless application and tracking via Loanpao.

Frequently Asked Questions