What the loan really costs

How does a Nepali student get an education loan, and what will it really cost to repay?

Two things about Nepali education loans decide everything else. They are almost always secured against land or property, so the bank is lending against your family's collateral rather than your expected salary. And the rate floats, so the number you sign at is not the number you pay for the whole term. Compare lenders on the total repayable over the full term, not on the headline rate.

6 figures on this page have no source yet. They are marked in place, with what it would take to confirm them. Check the authority yourself before acting on them.

What education loans is

Nepali education loans are secured against your family's property, not your future salary. Work out the total repayment before you borrow — not the monthly instalment.

Illustrative figures on realistic terms. The pattern — you repay well over what you borrowed — holds at any rate.

Who needs it

Students whose family cannot fund the course outright: A loan is the difference between the plan happening and not, and its terms decide whether it was worth it.
Anyone whose visa requires proof of funds: How a loan is documented affects whether it satisfies the funds requirement at all.
Families pledging property: Collateral turns a study decision into a family financial decision, and the downside deserves to be explicit.

What it costs

The monthly number is what banks quote and what students compare. The right-hand column is what you actually pay.

Cost breakdown
Item	Type	Amount
NPR 15 lakh~32,600	Other	11% · 5 yearsNo source yet. Attributed to Nepal Rastra Bank directives; individual commercial bank published terms in the previous build but with no document URL recorded. Needs the specific page read and its URL captured before this counts as sourced.
NPR 20 lakh~35,300	Other	12% · 7 yearsNo source yet. Attributed to Nepal Rastra Bank directives; individual commercial bank published terms in the previous build but with no document URL recorded. Needs the specific page read and its URL captured before this counts as sourced.
NPR 30 lakh~43,000	Other	12% · 10 yearsNo source yet. Attributed to Nepal Rastra Bank directives; individual commercial bank published terms in the previous build but with no document URL recorded. Needs the specific page read and its URL captured before this counts as sourced.
NPR 40 lakh~59,700	Other	13% · 10 yearsNo source yet. Attributed to Nepal Rastra Bank directives; individual commercial bank published terms in the previous build but with no document URL recorded. Needs the specific page read and its URL captured before this counts as sourced.

Today's exchange rates

Live rates from Byajdar, an independent rate-comparison site for the Nepali market. The rate on the day your funds are assessed is the one that counts — not the rate on the day you deposited.

Rates by Byajdar — third-party data, shown as published.

How long it takes

6 months outCheck the collateral position honestlyOur recommendation, not a rule. Our recommended sequence, based on the dependencies between the steps on this page.Ownership, title, location, and whether every owner will consent.
5 months outGet the property valued and applyOur recommendation, not a rule. Our recommended sequence, based on the dependencies between the steps on this page.The valuation sets your ceiling, so it determines whether the plan is viable at all.
4 months outSanction letter issuedSources: Nepal Rastra Bank — Foreign Exchange Management Department, Department of Home Affairs (Australia), Immigration, Refugees and Citizenship Canada, UK Home Office — Student visa, German Federal Foreign Office, US Department of State — Student Visa, Immigration Services Agency of Japan, Korea Immigration Service, Ministry of Justice, Immigration New ZealandRead every condition attached to it. This is the document your visa application will use.
3 months outLodge the visa using the sanction letterSources: Nepal Rastra Bank — Foreign Exchange Management Department, Department of Home Affairs (Australia), Immigration, Refugees and Citizenship Canada, UK Home Office — Student visa, German Federal Foreign Office, US Department of State — Student Visa, Immigration Services Agency of Japan, Korea Immigration Service, Ministry of Justice, Immigration New ZealandMoney is not in your account yet, and does not need to be.
2 months outVisa granted, request disbursementSources: Nepal Rastra Bank — Foreign Exchange Management Department, Department of Home Affairs (Australia), Immigration, Refugees and Citizenship Canada, UK Home Office — Student visa, German Federal Foreign Office, US Department of State — Student Visa, Immigration Services Agency of Japan, Korea Immigration Service, Ministry of Justice, Immigration New ZealandBanks generally release after the visa, and usually pay the institution directly.
1 month outBank remits under the foreign exchange facilityNepal Rastra Bank — Foreign Exchange Management Department(opens in a new tab)Requires the offer letter and supporting documents under NRB rules.
From your agreement dateInterest begins accruingNo source yet. Attributed to Nepal Rastra Bank directives; individual commercial bank published terms in the previous build but with no document URL recorded. Needs the specific page read and its URL captured before this counts as sourced.Often during study, even where principal repayment is deferred. Confirm which applies to you.

Documents you need

RequiredProperty in an acceptable locationBanks value urban and road-accessible land far above the alternative, and some locations are not accepted at all.
RequiredClear title, and consent from every ownerJointly owned family property needs every owner's agreement. This takes longer than students expect.
RequiredA valuation, which sets your ceilingYou can borrow a proportion of assessed value, not the amount you happen to need.
RequiredOffer or admission letterBanks lend against a specific course at a specific institution, not against an intention.
RequiredA full cost estimateTuition plus living for the whole programme. Understating it to get approval creates the shortfall that leads to informal borrowing.
RequiredIncome evidence for the guarantorUsually a parent. Their income supports the repayment case even though the property is the security.
RequiredFloating or fixed, and the spreadMost are floating: a base rate plus a premium. Ask what the premium is and whether it can change.
RequiredWhen repayment startsInterest often accrues during study even where principal repayment is deferred. Get this in writing.
RequiredPrepayment termsWhether you can repay early, and what it costs to do so. This matters more than a small rate difference.
RequiredTotal repayment, in writingAsk the bank for the full amount repayable over the term, not the monthly figure.
RequiredWhat happens if the rate risesA one-point rise on 30 lakh over ten years adds roughly two lakh to the total.
RequiredRead the default clauseSpecifically what happens to the collateral, and over what timeline. Then have someone else read it too.

Step by step

Price the whole cost before you go to a bank
Tuition, living, the upfront housing lump and the visa costs, for the whole programme. Walking in with a number stops the bank's maximum from becoming your number.
Compare rates across banks before you walk into one
Byajdar (byajdar.com) compares published bank rates for the Nepali market the way Bankrate does elsewhere — check the education-loan rates there first, then ask each shortlisted bank for the total repayable in writing. The published rate starts the conversation; the total repayable decides it.
Get the sanction letter early
Visa applications accept a sanction letter as financial evidence, and it takes weeks after valuation. Start it before you need it.
Borrow the minimum, not the maximum offered
The approved ceiling is what the collateral supports, not what your course costs. Every extra lakh borrowed is roughly 1.5 lakh repaid.

Mistakes that cost money

You are borrowing against the family's land

What it costs: In a country with unsecured student lending, a degree that does not pay off leaves the graduate with a debt. In Nepal it leaves the family with a charge over their property. That changes who carries the risk of a poor course choice, and it is why the honest questions are asked before borrowing rather than after: what i

Instead: This is the single most expensive error on this page. Address it before anything else.

Comparing lenders on the headline interest rate only

What it costs: Processing fees, insurance requirements and the repayment start date change the total repaid far more than a small rate difference does.

Instead: Compare the total amount repayable over the full term, in writing, across at least three lenders.

Borrowing against a salary the qualification may not produce

What it costs: Repayment starts on schedule regardless, and a graduate salary below expectations turns a study decision into a family debt problem.

Instead: Model repayment against a conservative salary, not the best case.

Alternatives, and the trade-off

A cheaper destination
Better when: When the loan required for one country would not be needed for another. Tuition-free public universities change this arithmetic entirely.
Scholarships and fee waivers
Better when: Always worth exhausting first — a fee waiver reduces the loan rather than being repaid.

In favour

Makes an otherwise impossible course possible
A sanctioned loan can support the visa funds requirement in some destinations
Terms are documented and comparable between lenders

Against

Repayment begins whether or not the qualification produced the salary it promised
Collateral is usually family property, so the risk is not carried by the student alone
The total repaid can substantially exceed the amount borrowed

Questions people ask

Which bank has the lowest education loan interest rate in Nepal?

It changes — rates are repriced as the base rate moves, so any named bank would be wrong within a quarter. Compare current published rates across banks on Byajdar, then ask your shortlist for the total repayable over the full term in writing, because fees and repayment start dates move the real cost more than small rate differences do.

The bank with the lowest headline rate is frequently not the cheapest once processing fees and mandatory insurance are included. The written total repayable is the only number that lets you compare like with like.

Can I get an education loan in Nepal without collateral?

Rarely. Nepali education loans are predominantly secured against land or property, and the valuation of that property sets how much you can borrow. Banks are lending against the collateral rather than against your expected future salary, so unsecured education lending remains the exception.

This is the central difference from countries with unsecured government student lending, and it changes who carries the risk if the course does not pay off. It also means students without family property are largely excluded from formal borrowing.

How much will I actually repay?

On realistic terms, somewhere between about 1.3 and 1.8 times what you borrow, depending on the rate and the length of the term. Borrowing NPR 30 lakh at 12% over ten years repays roughly 51 lakh in total.

Ask the bank for the total repayable over the full term in writing, not the monthly instalment. A longer term always makes the monthly figure look better and the total worse.

Is a sanction letter enough for my visa?

In most cases yes — visa applications accept a sanction letter as evidence of funds, and the money does not need to be in your account when you lodge.

The sequence usually runs valuation, sanction letter, visa, then disbursement, with the bank paying the institution directly. Confirm the specific requirement for your destination, because the financial-evidence mechanism differs by country.

Does interest build up while I am studying?

Frequently, yes. Many agreements defer repayment of the principal during study but continue to accrue interest, which is then added to what you owe.

This is one of the most commonly misunderstood clauses. Ask specifically whether interest accrues during the study period and whether you may service it — paying interest during study, if you can, reduces the total meaningfully.

What if the interest rate rises?

Most education loans in Nepal are floating: a base rate plus a fixed premium. When the base rate moves, your instalment or your term moves with it.

Budget at a rate above today's rather than at today's. On a 30 lakh loan over ten years, a single percentage point adds roughly two lakh to the total repayment.

Should I borrow informally to cover a shortfall?

No. Monthly-interest lending outside the formal system carries rates that compound far faster than borrowers expect, offers no regulated process if you fall behind, and frequently involves pledging property that is already charged to a bank.

Shortfalls usually come from understating the true cost at the start. Price the whole programme — tuition, living, the upfront housing lump and visa costs — before you approach any lender, so the number you borrow is the number you need.

Sources

Last reviewed 8 August 2026.

Interest rates, collateral requirements, tenure and repayment terms
No source yet. Attributed to Nepal Rastra Bank directives; individual commercial bank published terms in the previous build but with no document URL recorded. Needs the specific page read and its URL captured before this counts as sourced.
Sanction, disbursement, and what visa applications accept as financial evidence
Sources: Nepal Rastra Bank — Foreign Exchange Management Department, Department of Home Affairs (Australia), Immigration, Refugees and Citizenship Canada, UK Home Office — Student visa, German Federal Foreign Office, US Department of State — Student Visa, Immigration Services Agency of Japan, Korea Immigration Service, Ministry of Justice, Immigration New Zealand
Student foreign exchange facility, limits and required documents
Nepal Rastra Bank — Foreign Exchange Management Department(opens in a new tab)
Amortisation arithmetic used in the worked examples
Derived from the standard amortisation formula applied to the illustrative rate and term shown in each row — M = P · r(1+r)^n / ((1+r)^n − 1), where P is principal, r the monthly rate and n the number of payments
Informal lending risks and borrower protections
Nepal Rastra Bank consumer guidance; consumer protection bodies(opens in a new tab)