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Student in loan in Nepal

How to apply for a student loan in Nepal?

In Nepal, tuition fees have risen at an alarming rate over the past two decades, making it difficult for students to pay their fees. As such, many students are considering a student loan in Nepal to cover the various expenses they encounter during their studies. 

This article covers all the information regarding how one can apply for student loans in Nepal for higher study.

1. Introduction to education loan

An education loan is a type of loan that can be borrowed to cover education-related expenses. Fees include tuition fees, miscellaneous expenses, library fees, laboratory fees, dormitory fees, study abroad travel expenses, etc. This type of loan is specifically designed to help students financially cover their education costs. 

In Nepal, there are many banking institutions that provide student loan in Nepal for higher study.

2. Basic Requirements: 

In general, commercial banks in Nepal require the following documents for loan processing: 

  • A duly completed credit application. 
  • Original educational certificate/report.
  • Proof of admission to the course or letter of offer. 
  • A breakdown of the cost of the course. 
  • Parent’s statement of assets, and if applicable, co-signers income statement or cash flow details.
  • Citizenship/passport copy and photo in PP format of the student and their parents/guardians/guarantors.
  • Bank statements (deposits and loans) every 6 months.
  • Information about parental assets and liabilities.

 3. Eligibility criteria:

Students who have completed Level 10+2 education are entitled to an Education Loan. 

Education loans are usually granted to students for professional and university studies. 

Loan eligibility also depends on annual income, education, potential future income, co-signers, and collateral.

The primary eligibility criteria are listed below:

  • Applicants must be Nepalese citizens.
  • Applicants must have a teaching qualification of at least Level 10+2. 
  • Applicants must have a letter of admission confirmation from their respective educational institution. 
  • The applicant’s parent/guardian/spouse must have a regular income that can be paid in installments.
  • Applicant must be over 18 years old. 
  • Applicant must have collateral or a fixed deposit.

4. Eligible Courses:

Banks in Nepal offer education loans for almost all courses as long as the target educational institution is recognized by the Government of Nepal. The courses covered are: 

  • Undergraduate/Bachelor and above 
  • University graduate/Master’s degree or above 
  • All specialized courses (Graduate and above) 

5. Steps to apply

a. Collect all the requirements

First, collect all the required documents mentioned above. Make sure all those documents are valid and original.

b. Validate every eligibility criterion

In general, most banks consider the following factors when offering an education loan: 

  • Nationality (applicants must be Nepalese citizens). 
  • Confirmation of admission from each institution.  
  • A trusted co-signer (usually a parent/guardian/spouse) with a regular source of income in installments.  
  • Age (applicants are mandatory to be over 18 years old). 
  • Collateral or FD equivalents.

c. Evaluate the courses and institutions covered

For education loans, students must be studying an undergraduate/bachelor’s degree, postgraduate/master’s degree or above, or a specialized course at an institution recognized by the Government of Nepal.  

d. Evaluate other expenses covered

Education loans generally cover most of the expenses incurred during the period of education. Expenses include school fees, library fees, laboratory fees, dormitory fees, study abroad travel expenses, etc. 

6. Visit the bank and collect relevant information on the following queries:

How much can I borrow? 

The total amount you can borrow varies from bank to bank, depending on the degree you have and your parent/guardian’s regular income to pay the interest. 

How much does the loan cost?

Education/student loan costs vary based on interest rates, loan margins, loan processing fees, subsidies, grace periods, terms, and moratorium periods. Before deciding on a student loan, students should research the amount of the loan and the total cost of repayment.

What is the repayment module?

For education loans, repayments must be made in equal monthly installments (EMI) beginning after the course is completed. 

For education loans, there are special provisions for the deferral phase. A moratorium is a period during and after which the loan amount is paid to the borrower without the borrower being obligated to repay it. However, interest accrues during the moratorium period and must be paid by the borrower. 

What are the terms of the loan? 

When applying for a loan, make sure you understand all the terms of the loan. If you are unsure of the terms, do not hesitate to ask the loan officer. Find out details such as total loan costs, monthly payments, fees, whether interest rates are fixed or fluctuate by market, collateral and collateral, loan amount, and more. 

7. Compare relevant parameters. 

Before applying for an education loan, students are strongly advised to compare education loans based on different parameters. Parameters include interest rate, what the education loan covers (tuition, library fees, etc.), interest rate, loan processing fee, grant, grace period, duration, loan processing time, and moratorium time. 

8. Complete Required Documents 

1. Find a co-signer. 

A trusted co-signer is required for a student to apply for an education loan in Nepal. Co-signing is a responsible commitment. The co-signer is legally obligated to pay the education loan if the borrower defaults on the loan payment. 

2. Check security/collateral. 

Collateral is a movable or immovable property that is pledged as collateral for the repayment of a loan and confiscated in the event of default. Commercial banks in Nepal offer education loans against fixed asset-backed and/or term deposits. Collateral/collateral is land, buildings, stocks and bonds, gold, and time deposits. 

3. Submit the required documents. 

The supporting documents required for an education loan vary from bank to bank, so we recommend checking with each bank for a list of required documents or visiting your nearest branch for more information. 

9. Generalize the payoff plan

Once the process and paperwork are completed, the bank pays off the loan. Because a loan is not free money, every cent you borrow from the bank costs your money when you pay it back. Therefore, we advise you to spend your money wisely.

Different national banks with education loans

Let’s take a look at some prominent banks that offer student loans in Nepal. 

1) Kathmandu Bank: 

 Loan Amount: 

  • Minimum: NPR 150,000/- 
  • Maximum: NPR 10,000,000/- 

 Financing %: 

  • Up to 90% of training and accommodation costs. If a student is looking for an MBBS/MD course in Nepal, the amount is up to 100% of the total tuition fee. However, the amount should not exceed 90% of the total cost of the course. Moreover, the loan will never exceed NPR 1,000,000/-. 
  • Other expenses such as travel expenses, books, computers, etc. 

Term: Maximum 10 years (excluding grace period of 12 months) 

Redemption: EMI-based 

Interest rate: Base interest rate + 0.50 to 6.00 

2) Citizens Bank Limited 

Loan Amount: Up to NPR 5 million.  

Loan portion: Up to 100% of the training cost, but not more than 80% of collateral distress value 

Term: Up to 15 years including a moratorium  

Term of office: 10 years maximum (including a grace period of 3 years) 

Redemption: EMI-based 

3) Everest Bank Limited 

 Loan amount: Loan amounts are approved according to expenses incurred during the course and expected income after the course. 

Payment: The loan is paid as a term loan. The annual limit is calculated on the basis of the expenses incurred during the study within the framework of the overall limit and paid accordingly. 

Security Deposit: 100% security deposit or term deposit of the loan amount accepted by the bank. 

Note: A student applying for an education loan for her MBBS/BDS studies in Nepal can avail of the ‘Sanjivani Education Loan Scheme’ offered by the bank. 

4) Nepal Investment Bank Limited 

 Term: Up to 10 years 

 Redemption: EMI-based 

Fees and Charges: 

  • Unscheduled payments: 1.5% of the payment amount. 
  • Administrative fee: 0.50% of the loan amount or NPR 5,000 (whichever is higher) 
  • CIC fee: actual cost 

5) Machhapuchchree Bank  

 Borrowing amount:

  • Minimum: NPR 200,000/- 
  • Maximum: NPR 6,000,000/- 

Funding rate: Up to 70% of the fair market value of real estate securities or 80% of total education expenses. 

Term: Up to 12 years (including a 2-year grace period) 

Loan processing fee: 1% of the loan amount 

Redemption: EMI-based 

 6) Nabil Bank Limited 

 Loan Amount: Up to NPR 10 million 

 Financing rate: Student loans are also available for up to 90% of the deposit principal amount  

 Term: Maximum 15 years 

 Moratorium period: up to 4 years or course duration, whichever comes first

7) Nepal SBI Bank Limited

Loan Amount: Maximum as much as NPR eighty Lakhs

Moratorium Period: Maximum duration of five years or three months after the crowning glory of the path designated (whichever is earlier).

Tenure: Maximum up to ten years after the moratorium duration

Repayment: EMI based

Security: Land and construction having a cost of at the least 110.00% of the mortgage quantity or as much as 95% of the Fixed Deposit/Government securities

8) NMB Bank Limited

Loan Amount: Up to 70% of the Fair Market Value of the collateral protection as valued through the Bank`s authorized cost.

Financing ratio: Up to 90%

Tenure: Maximum up to ten years

Repayment:  EMI based

9) Laxmi Bank

Loan Amount: Maximum of NPR 7 million

Financing %: 75% of FMV of the belongings or 95% of the cost of Fixed Deposit or Government Bond

Loan Tenure: 15 years

10) Prabhu Bank Limited

Loan Amount:

  • Minimum: NPR 100,000/-
  • Maximum: NPR five Million/-

Financing %:  Up to 90% of the Distress Value concern the most mortgage limit

Tenure: Maximum of 15 years

Loan Fee: Management Fee of 1% of the sanctioned mortgage quantity

Repayment: EMI based

11) Sanima Bank Limited

Loan Amount: Maximum as much as NPR 10 million

Tenure: Up to fifteen Years (together with moratorium duration)

Service Charge: 1% at the authorized mortgage limit

12) Siddhartha Bank Limited

Loan Amount: Maximum as much as eighty% of the overall fees to be incurred for the proposed study

Tenure: Maximum up to ten years (In case of Term Loan together with moratorium duration)

Security: Land and constructing with at the least a 40% margin or loan of land

13) Standard Chartered Bank Limited

Loan Amount:

  • Minimum: NPR 1 million
  • Maximum: Up to NPR 10 million

Tenure: Minimum 1 yr. and most up to ten years

Moratorium Period: Up to a most of three years or path duration (Whichever is earlier)

Repayment: EMI foundation after the moratorium duration

Other main banks include:

  • Himalayan Bank Limited
  • Mega Bank Limited
  • NCC Bank
  • Kumari Bank Limited
  • Prime Bank Limited


Before selecting a student loan in Nepal, it`s vital for Nepali college students to test whether or not any shape of scholarship is to be had for them or not. 

Because, many faculties in Nepal are presenting merit-based, and need-based, in addition to extracurricular scholarships.

 So, it’s miles incredibly advocated to discover whether or not you’re eligible for any scholarships and practice anyplace possible.

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