Canara Bank Education Loan: Interest Rates, Eligibilty, Documents & How to Apply

Canara Bank Education Loan

Canara Bank education loans help students fund their study abroad dreams under its IBA Model Education Loan Scheme. The bank provides financial aid to aspiring and deserving students. A maximum of INR 20 lakhs is provided for abroad studies, however, students can avail of need-based financing subject to the terms and conditions of the bank. Students can take collateral-free education loans up to INR 7.5 lakhs. 

The Canara Bank education loan interest rates are very competitive. These are preferred for quick processing and hassle-free education loan disbursement process. In this blog, we will cover all the important details about Canara Bank education loan- features, interest rates, documents required, how to apply and other details.  

Overview of Canara Bank Education Loan

Canara Bank is one of the largest banks public sector banks in India providing education loans to study abroad. Canara Bank Education Loan helps students to pursue higher education in India & abroad with interest rates starting from 11.15%. Students can avail collateral-free loans of up to INR 7.5 lakhs. For loans above INR 7.5 lakhs, collateral security to cover 100% of the loan amount is required. 

The table below provides an overview of Canara Bank education loan to study abroad. 

Maximum Loan LimitUp to INR 20 lakhs
(Beyond 20 lakhs can be considered subject to terms and conditions)
Interest Rate11.15% onwards
EligibilityThe student should be an Indian National.
NRI Students holding valid Indian passports.
Repayment Tenure15 years
Margin MoneyUp to 4 Lakhs- NILAbove 4 Lakhs- 15% (study abroad)
SecurityUp to INR 7.5 lakhs- no collateral security
Above Rs.7.5 Lakhs– Tangible Collateral security to cover at least 100% of the loan amount.
Moratorium PeriodStudy period + 1 year or six months after getting a job whichever is earlier.
Processing FeeNIL 

Recommended Read: Planning to study abroad via financial assistance? Check out our blog on the List of Approved Foreign Universities for Education Loan.

IBA Model Education Loan Scheme for Pursuing Higher Studies in India and abroad

Objective: To provide general loan assistance to students for higher studies.

PurposePayment of Course fee,
Hostel/Boarding/Examination/Library& Laboratory fee
Purchase of books, equipment, instruments, uniforms, computers if it is essential for completion of the course,
Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts. Travel expenses/passage money for studies abroad.
Any other expenses required to complete the course are subject to a ceiling.
EligibilityIndian National
NRI students holding valid Indian passports
Eligible coursesNeed-based finance Students may submit their loan applications either at the bank branches near the residence of their parents or bank branches near the educational institution where they are studying.
Quantum of financeNeed-based finance.
Students may submit their loan applications either at the bank branches near the residence of their parents or bank branches near the educational institution where they are studying.
MarginUp to Rs.4.00 Lakhs– Nil
Above Rs.4.00 Lakhs– 
Studies in India –  5%   
Studies abroad   – 15%  
SecurityAssignment of future income of the student
Merit Quota:
Loan amount up to Rs.7.50 Lakhs: No collateral Security, the loan will be covered under the Credit Guarantee Fund Scheme for Education loans(CGFSEL) scheme subject to the conditions. The loan is granted jointly with the parent/guardians of the student.
Loan amount above Rs.7.50 Lakhs: Tangible Collateral security to cover at least 100% of the loan amount. The loan is granted jointly with the parent/guardians of the student.
Management Quota:
Loan amount up to Rs.4.00 Lakhs: No collateral SecurityThe loan is granted jointly with the parent/guardians of the student.
Loan amount above Rs. 4.00 Lakhs: Tangible Collateral security to cover at least 100% of the loan amountThe loan is granted jointly with the parent/guardians of the student.
RepaymentRepayment of the loan will be in equated monthly Installments up to a maximum of 15 years excluding the moratorium period ( i.e., course period plus one year).

Features of the Loan

Canara Bank education loans assist meritorious and deserving students with the funds to cover their study-abroad expenses. Students pursuing undergraduate, post-graduate, PhD, and diploma courses can avail of Canara education loans. The loan pays for their educational expenditures, such as tuition, accommodation, insurance premiums and other related expenses. Here are some of the features of Canara Bank education loans- 

  • It provides need-based financing to deserving students. 
  • Collateral-free loans up to INR 7.5 lakhs can be taken. 
  • Education loans at lower and competitive interest rates start from 11.15%.
  • Allows reduction in balance interest rate. 
  • There are no prepayment penalties. 
  • The education loan processing time is super quick. 
  • Canara Bank education loan disbursement process is quick and hassle-free. 

Canara Bank Education Loan Interest Rate

Canara Bank’s education loan interest rate depends upon the educational loan scheme you have availed of from the bank. The interest rate on the Canara Bank Education loan starts from 11.15% under the IBA Model Education Loan Scheme. A concession of 0.5% is provided to girl students. 

The bank’s interest rates are linked to the RLLR (Repo Linked Lending Rate). It is currently set at 9.25%. Additionally, a spread is added to the RLLR and the effective rate of interest is obtained on which the Canara Bank lends the education loans. 

Loan AmountRLLRSpreadEffective Rate of Interest
Loans Up to INR 7.5 lakhs9.25%2%11.35%
Loans Above INR 7.5 lakhs9.25%1.80%11.15%

Eligibility Criteria

Canara Bank offers the ‘IBA Model Education Loan Scheme’ for students considering higher education in India or abroad. The eligibility criteria for availing of this loan are listed below:

  • The student should be an Indian national.
  • The student should have secured admission to a higher education course in recognised institutions in India or abroad through an Entrance Test or Merit Based Selection process after completion of HSC (10 plus 2 or equivalent).
  • If the student is directly getting admission into a college without undergoing any selection process, (i.e., Entrance Tests/ scoring in eligibility tests/ merit-based selection process) then an educational loan can be considered if the student has scored a minimum of 60% marks in the previous qualifying examination.

Also Read: Check out our blog and read about some of the top non-government scholarships for international students in Canada.

Canara Bank Education Loan Documents Required

To apply for Canara Bank education loans, a list of documents must be submitted to the bank for them to verify your details and eligibility. These include documents relating to identity, address, income, collateral, academics, and KYC. The applicant must keep all these documents handy and attach them along the duly filled education loan application form. 

Here is the list of Canara Bank education loan documents required– 

  • Education Loan Application Form
  • 2 passport-size photos of applicant/ Co-applicants
  • KYC documents of applicant/ Co-applicants
  • Proof of Identity- PAN CARD/ Driver’s License/ Voter ID / Passport/ Aadhaar Card
  • Proof of Residence- Driver’s License/ Voter ID/ Passport/ Aadhaar Card/ Electricity Bill/ Telephone Bill 
  • Age proof of the applicant/ Co-applicants.
  • PAN card (photocopy).
  • Acceptance letter from the university as proof of admission
  • Schedule of expenses for the course
  • Mark sheet of last qualifying examination
  • Proof of income/assets (if any)
  • Income Proof for Co-applicant/guarantor (if any)
  • Copy of land records
  • Any other documents as required by the Bank

How to Apply for Canara Bank Education Loans?

Applying for Canara Bank education loans is super easy. Applicants can either visit the nearest bank branch and connect with the education loan specialist and fill out the application form or apply online. If you want to apply online, students can apply through the Vidya Lakshmi Portal Canara Bank. Here is a stepwise procedure to apply for a Canara Bank Education Loan. 

  • Visit the official website of Vidya Lakshmi Portal. 
  • Register yourself and log in using your username and password.
  • Navigate to the ‘Loan Application Form’ and fill in all the required details, as asked.
  • While filling out the application, select Canara Bank as the lender.
  • After selecting the bank, mention the required loan amount.
  • Provide the necessary details and the supporting documents.

Canara Bank Education Loan Moratorium Period

The moratorium period for a Canara Bank education loan is the course duration + 1 year or six months after getting the job, whichever is earlier. It means that the student is not required to start with the repayment of an education loan. 

This was introduced to take the edge off of the COVID-19 crisis. The RBI announced a Moratorium period which helps reduce the burden of debt services. During the period of the Moratorium, no one has to pay all instalments/ EMIs. The repayment will start on its own after the period of the Moratorium is over. 

However, the amount of remaining EMIs & numbers of EMIs will change. The moratorium does not mean not a waiver, it is simply deferred EMI payment. You can still avail of this feature in Canara Bank education loans at any time. 

Interest Subsidy

Applicants availing of Canara Bank education loans can avail of income tax rebates under Section 80E of the Income Tax Act. Not just this, every individual no matter what section of society they belong to has a right to education & can avail of all available financial assistance. To support the Economically Weaker Sections of Society, the Government of India launched an interest subsidy scheme. 

Under this, students can avail of a full interest subsidy on Canara Bank education loans. One such scheme is the Dr Ambedkar Central Sector Scheme of Interest Subsidy. This scheme will provide interest subsidies to the students belonging to the Other Backward Classes (OBC) and Economically Backward Classes (EBC) during the moratorium period under the IBA model Education loan scheme for overseas studies to pursue the Master, M.Phil and PhD courses.

Also Read: Planning for study abroad loan from SBI? Read this and know the differences between the SBI Student Loan Scheme and SBI Global Ed-vantage Scheme

Loan Repayment Process of Canara Education Loans

Canara Bank’s education loan payback process can run up to 15 years, as that is the maximum repayment length for a Canara Bank educational loan.

If a student applies for an education loan of Rs 30 lacs without collateral at 12% interest and agrees to repay the loan in 10 years, their amortisation plan will look like this:

Repayment cycleEMIInterest portionPrincipal portionLoan Outstanding
Start of loan EMI4289724507183903441407
End of year 14289723022198743230318
End of Year 24289721265216312980555
End of Year 34289719353235432708715
End of Year 44289717273256242412847
End of Year 54289715008278892090828
End of Year 64289712542303541740344
End of Year 7428979859330371358881
End of Year 842897693935957943700
End of Year 942897376139136491821
End of Year 1042897302425950

Students can, however, choose to repay their college loans sooner by using the following methods:

  • Choosing shorter repayment terms (as done in the above example)
  • Transfer your education loan
  • Part repayment or prepayment

Pro Tip: When repaying your outstanding loan amount, keep a little more money with the last EMI payment, so that if the branch manager ends your loan the next day, there will be no extra money owed.

Canara Bank Education Loan EMI Calculator

Before applying for a Canara Bank education loan, it is important to calculate the monthly payment that the applicant has to pay after the course completion every month. You can calculate your monthly payment. For example, if your loan amount is Rs.10,00,000/-, the Rate of interest is 8 & loan terms are 12 your monthly payment will be Rs.10,825/- 


Can I get an education loan from Canara Bank to study abroad?

Yes, study abroad aspirants can avail of Canara Bank education loans of up to INR 20 lakhs. However, education loans beyond 20 lakhs can be considered for deserving and meritorious students subject to terms and conditions and eligibility.

Are Canara Bank education loans a good option?

Yes, education loans from Canara Bank are a preferred choice among aspiring students due to lower interest rates, quick processing time, hassle-free disbursement process, and flexible repayment options.

Can I get a Canara Bank education loan without collateral?

Canara Bank education loans without collateral can be availed up to INR 7.5 lakhs. Loans above 7.5 lakhs require tangible collateral security to cover 100% of the loan amount.

How can I pay an education loan in Canara Bank?

Repayment begins after the course completion & employment begins within the period of 6 months to a year. You can pay the education loan online & avoid delay in payment otherwise you will be charged a penalty.

What are the interest rates on Canara Bank education loans?

Canara Bank provides education loans at competitive interest rates starting from 11.15%. The bank also provides a concession of 0.50% to female students.

Which bank has the lowest interest rate on education loans?

Canara Bank, PNB, SBI, and HDFC are some of the banks providing education loans at competitive and low interest rates.

This was all about Canara Bank Education Loans. This is a financial assistance scheme that provides monetary backing for students aspiring to pursue higher studies in India or abroad. 

To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.

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About Shubhika Garg

Hey there! I'm Shubhika- a proud graduate in English Literature and Language from Delhi University. My journey as a content writer transitioned from online teacher into the world of words. Stepping into the domain of blogs and articles, I discovered my passion for writing growing deeper and stronger. Having said that, I have experience of writing for diverse industries in automobile, technology, ed-tech, finance and mental-health; crafting details to help you find the solution to what you are looking for. Join me as I invite you all explore and learn together.

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