Image of a student studying with a laptop and books, representing the concept of education expenses.

An Education Loan is a type of consumer loan provided to individuals to meet their education expenses within their Country and Abroad. Getting an education loan is relatively easy if the borrower has a valid source of income to repay the loan and sufficient collateral to back it up. The loan is provided to cover the cost of your course and living expenses. Only Education Loan from A class commercial bank are chosen to be trustworthy and reliable in case of foreign study.  So here we will discuss in detail how to get an Education loan and what its criteria for eligibility which will help the reader in decision-making regarding Education loans.

Understanding Education Loans:

Before approaching a bank for an education loan, it's essential to have basic knowledge about loans and things to consider beforehand. 
 
The key features of Education Loan are:

  1. To meet the expenses incurred during the completion of your higher studies in your country of Abroad.
  2. Loan can be financed up to a maximum of 15 years. Tenure of a Loan may differ from Bank to Bank. 
  3. Bank may charge a higher interest rate compared to other loan products.
  4. Normally Loan limit will be up to 10 million or the cost of your course whichever is lower.
Illustration of a handshake between a student and a banker, symbolizing the loan approval process.

It is important to note that there is no such thing as a "paper loan" for students seeking education loans in Nepal. Students often have misconceptions about the loan process and approach banks with this incorrect information. Students must be aware of the correct loan procedures to avoid any confusion or misunderstandings. Education loans are meant to cover expenses incurred during studies, not for visa approval.

There are some documents required for your education Loan which are detailed below;

Documents required for Education Loan:

Picture of a family discussing financial documents together, highlighting the importance of income-related documents and family involvement.


1. Offer Letter: To determine your Education Loan Limit, you need to provide an offer letter that provides an overview of your course of study. The offer letter includes the cost of your study, the duration of your course, the cost of Living as well as the name of your College and University. Your Fees structure and mode of payment of your tuition fee are also determined from your offer letter. 

2. Income-related documents: After determining your loan limit, it is essential to assess your source of income for loan repayment. Income source documents and supporting bank statements must be submitted with tax payment receipts or statements for income assessment. Most banks require taxable income as a valid source of repayment. Example: For rental income, you need to provide a rental agreement, bank statements that show rental income credited, and a receipt of rental tax payment.


3. Collateral Documents: Land/Building documents such as Land Ownership documents and other related documents for collateral for your loan. Collateral must have a minimum 8ft wide road access and should be freehold property from your family member. Third-party collateral may be accepted on a case-by-case basis. It's important to note that no bank or financial institution will finance an education loan without collateral.


4. Personal Identification Documents: The citizenship of all your family members should be required for processing your loan. 

Repayment Options: Education loans are typically repaid on an EMI (Equated Monthly Installment) basis. However, some banks may offer a grace period until the completion of the course. During this time, you will need to pay interest every month until the completion of your course. Once your course is completed, your EMI payments will begin. The grace period is also known as the moratorium period in banking terms. Repayment with a moratorium period during study can ease the burden on students and parents. After completing their studies, they can easily fulfill the bank's obligations while being gainfully employed. Hence it is also one of the things to be taken into consideration before making any credit decision related to an Education loan.

Repayment Options:

Education loans are typically repaid on an EMI (Equated Monthly Installment) basis. However, some banks may offer a grace period until the completion of the course. During this time, you will need to pay interest every month until the completion of your course. Once your course is completed, your EMI payments will begin. The grace period is also known as the moratorium period in banking terms. Repayment with a moratorium period during study can ease the burden on students and parents. After completing their studies, they can easily fulfill the bank's obligations while being gainfully employed. Hence it is also one of the things to be taken into consideration before making any credit decision related to an Education loan.

Illustration of a person planning their finances with a budget sheet and calculator, emphasizing the need for a clear purpose and repayment plan before approaching a bank for a loan.


Before approaching a bank for an Education Loan, it is important to have a clear purpose for the loan and a proper repayment plan. If your purpose for borrowing is clear and the cause of your borrowing is justifiable, any bank or financial institution may provide you with an Education Loan to pursue your higher studies.

Learn about: Personal Loan