An education loan, also known as a student loan, is a type of financial assistance provided by banks or financial institutions to students or their parents to cover the costs associated with higher education. Education loans are designed to help students pursue their academic goals, such as undergraduate or postgraduate courses, vocational training, or professional studies.

• Student-Borrower: Education loans are typically taken out by students themselves, with their parents or guardians acting as co-applicants or guarantors.
• Loan Amount: The loan amount is determined based on the course’s tuition fees, living expenses, and other related costs. Lenders often consider the student’s academic performance and future earning potential while determining the loan amount.
• Repayment Terms: Education loans generally offer a moratorium period, known as the “study period,” during which the borrower is not required to make repayments. Repayment typically begins after the course is completed, giving the student time to find employment.
• Interest Rates: Education loans can have either fixed or floating interest rates, depending on the lender and the loan agreement.
• Collateral and Guarantor: Depending on the loan amount and the lender’s policies, some education loans may require collateral or a guarantor, while others may be unsecured.
• Tax Benefits: In some countries, education loans may offer tax benefits, such as deductions on the interest paid, reducing the overall cost of borrowing.
• Purpose: Education loans cover expenses like tuition fees, study materials, accommodation, travel, and other educational-related costs.
• Application Process: To apply for an education loan, borrowers need to provide documents such as admission letters, academic records, cost estimates, and other financial information.