Demand for education loans surges to 86.5% in Tier II, III cities, financing trends shifting, finds Kuhoo Finance report

There is an increasingly growing demand for education loans from Tier II and III cities, lending data from Kuhoo Finance platform over a one-year period showed. The report added that smaller cities in India now account for 86.5% of applications on the platform.

Among states, Uttar Pradesh and Maharashtra topped the list for number of applications; while job training and MBA programmes dominate disbursals as students prioritise career-focused, outcome-driven education, according to data between January 2025 and July 2026 on Kuhoo.

“What this data tells us is that ambition is no longer concentrated in the metros, it is rising fastest in India's smaller cities and towns. As higher education becomes increasingly outcome-driven, students want financing that is transparent, accessible, and aligned with their long-term goals,” Prashant A. Bhonsle, Founder and CEO of Kuhoo said.

The insights highlighted evolving trends in education financing across India tracking more than 2.5 lakh applications received by the education financing platform for education loans worth ₹ 7.5 crore, it stated.

The study found that there is a growing demand for structured education loans from students in emerging markets, with increasing preference for career-oriented programmes, and a rising need for financing solutions that accommodate diverse household income profiles.

Kuhoo Finance is an education -focused lending platform enabling Indian students to access quality higher education in India. It offers customised education financing through a digital-first approach, the release added.

A financial aid extended by banks and other lenders (public and private), education loan can help fund a student's education . The amount covers tuition fees, boarding charges, travel, and any other expense that you may incurs during study. Lenders tend to offer flexible repayment options and moratorium period, to allow students room to focus on their studies and start repayment once they gain employment.

There are many types of education loans one can avail, including — Undergraduate loans, postgraduate loans, profession advancement loans, and parent's loans (taken by parents to fund their children's education).

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Jocelyn Fernandes is a journalist and editor with nearly 13 years of experience covering the business, corporate, economy and markets beats in news.<br> As chief content producer for around three years at Livemint (Hindustan Times), Jocelyn publishes breaking stories, explainers, features and live blogs on a range of business and economy topics, including the Budget, corporate developments, stock markets, income tax, money and personal finance, cryptocurrency, government policy, impact of US tariffs, international developments and more.<br> Jocelyn's writing philosophy is focused on delivering news in an accurate and accessible format for readers.