Answer in Short: A student loan in Nepal is an educational loan provided by commercial banks or developmental banks like Nabil Bank, NIC Asia, and Nepal Bank Limited, among others, for higher studies within the country or outside the country. Students qualified for these loans can obtain loans starting from NPR 5 lakhs up to NPR 75 lakhs.
What Is a Student Loan in Nepal?
A student loan from Nepal is defined as a loan from an authorized financial institution, used to pay for tuition, living costs, and other expenses associated with the process of studying at the undergraduate, graduate, or professional level.
Based on the assessment of various products from leading banks in Nepal, most of the student loans in Nepal are Education Loans, which conform to the NRB guidelines. Such loans may be for domestic education as well as foreign education for students who are going to attend colleges or universities in countries such as Australia, Canada, the UK, Japan, or Germany.
Education loans have generally lower interest rates than personal loans.
Which Banks Offer Student Loans in Nepal?
“A”-rated commercial banks as well as “B”-rated development banks in Nepal provide student loans, although the terms differ greatly from one institution to another. The institutions that appear to be most active in lending include:
| Bank | Loan Limit | Interest Rate (Approx.) | Repayment Period |
| Nabil Bank | Up to NPR 75 Lakhs | 10–12% p.a. | Up to 10 years |
| NIC Asia Bank | Up to NPR 50 Lakhs | 10–13% p.a. | Up to 7 years |
| Nepal Bank Limited | Up to NPR 40 Lakhs | 9.5–11% p.a. | Up to 10 years |
| Kumari Bank | Up to NPR 60 Lakhs | 11–13% p.a. | Up to 8 years |
| Laxmi Sunrise Bank | Up to NPR 50 Lakhs | 10.5–12% p.a. | Up to 7 years |
Interest rates are subject to change per NRB base rate revisions. Always confirm current rates directly with your bank.
What Are the Eligibility Criteria for a Student Loan in Nepal?
The basic eligibility conditions for obtaining a student loan in Nepal are that the applicant should be a citizen of Nepal and currently studying or enrolled in a recognized educational institution within or outside Nepal. According to the standard banking practice in Nepal, the key requirements for eligibility are:
- Age: between 16-45 years (and a guarantor is needed in case of below 18 years age)
- Academic performance: at least second division in previous qualification
- Institution: the institution should be recognized by the authority concerned (such as TU, KU, PU, or international equivalency)
- Co-applicant or guarantor: a creditworthy parent or guardian is usually a necessity
- Security or collateral: Banks need assets or fixed deposits as collateral for higher amounts beyond NPR 10-15 lakhs
Students applying from highly rated universities get faster approval owing to lower risk involved.
How to Apply for a Student Loan in Nepal: Step-by-Step
The process of applying for a student loan in a bank in Nepal involves similar steps that are taken by any lending financial institution in the country. On the basis of the tests and experience of the industry borrowers, the following process flow can be outlined for applying for a student loan in any bank in Nepal:
- Select your preferred bank: Compare interest rates, moratorium period, and processing fee among at least 3 banks.
- Gather all necessary documents: Admit card, degree certificates, citizenship document, passport (if you’re going abroad to study) and the guarantor’s salary slip.
- Fill up the loan application form: Fill it in person or online through the website of the bank (selected banks have the facility, such as NIC Asia, Nabil).
- Valuation of property or collateral: Site visit and valuation of collaterals submitted.
- Loan appraisal and approval: Takes between 7 to 21 working days.
- Signing of loan agreement: You sign the loan and mortgage deed in the presence of the bank staff.
- Disbursal of loan: Disbursed directly to the college/university or as per the semesters/year.
What Documents Are Required for a Student Loan in Nepal?
List of essential documents to be submitted when applying for a student loan in Nepal:
Basic documents:
- Citizenship certificate of both the borrower and the guarantor
- Passport (in case of foreign education loan), and the visa if already obtained
- Letter of acceptance/admission from the educational institution
- Academic documents such as SLC/SEE, +2, and Bachelor’s degree (if any)
- Fee structure/cost sheet prepared by the university
- Lalpurja/Ownership of land and its blueprint for collateral purpose
- Proof of income of the guarantor (salary slip, tax clearance, or company registration)
Frequently Asked Questions (FAQ)
Can international students borrow a loan in Canada?
Foreign students are not eligible for government loans in Canada. Students can secure loans from private banks or their native countries. Universities may even have financial assistance schemes for international students.
How do you apply for a loan?
The application can be made via your government’s student loan portal or at the bank with admission letter, ID and income proof. In Nepal, the loan should be applied for at your choice of commercial bank with documentation.
What is a student loan?
A student loan refers to borrowed money that covers tuition fees and living expenses in college or university, paid back along with interest when one graduates. The loans usually have moratorium periods for repayments to start once one is done with studies.
Can an independent student secure a student loan?
Yes, because independent students can secure bigger amounts than other borrowers.
Is student loan forgiven after 20 years?
Yes, but only in the US, where a federal loan holder in an income-driven repayment plan is eligible for loan forgiveness after 20-25 years. This scheme is not applicable in Nepal or other countries.
Conclusion
The use of student loans has gained much importance among students who seek higher education in Nepal and elsewhere due to its immense usefulness as a medium of financing their studies. As there are many commercial banks that provide such loans, the process of obtaining these loans can be quite easy for an applicant if he/she is thorough with the documentation process and compares various options available to him/her.
It would be wise to ascertain the interest rate prevailing in your chosen bank and also check whether your guarantor’s financial papers are in order.