More families are borrowing for college than at any point in the last decade — and it's not just because more kids are going to university. Education costs have gone up, studying abroad costs even more with a weaker rupee, and many families feel there's no other option.
India's total education loan book just hit ₹8.58 lakh crore in FY26 — a 15% jump in one year. That's a lot of families starting adult life with serious debt.
A typical ₹15–20 lakh education loan at 10–11% interest means EMIs of ₹18,000–22,000/month once repayments kick in — often right when your first salary arrives.
What this means for you
- If you're planning to study abroad, the weaker rupee means your loan amount needs to be higher than it would've been two years ago — budget carefully before applying.
- The interest you pay on an education loan is fully tax-deductible under Section 80E for up to 8 years — most families miss this and overpay tax unnecessarily.
- Most education loans come with a payment holiday (no EMI during your studies + 6–12 months after you graduate) — but interest still quietly adds up during that payment-holiday period, increasing your total repayment.
What you can do
- Before signing any loan, ask the bank for the total repayment amount — not just the EMI — so you know the real cost over 8–10 years.
- File Section 80E in your income tax return (ITR) every year from the first year of repayment — it's free tax savings that most young earners don't claim.
Borrowing for education isn't wrong — just go in with eyes open, not just hopeful.
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