Tier 3 Cities Drive 62% of Student Loan Demand
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Smaller towns are now leading India’s student loan demand, with 62 percent of applications coming from Tier 3 cities and 24 percent from Tier 2, leaving metros at just 14 percent, according to data shared by Kuhoo in March 2026.
The shift points to a steady rise in higher education ambitions beyond big cities. Better access to digital platforms and growing awareness around education loans are helping students from smaller towns apply in larger numbers.
At the state level, Maharashtra and Uttar Pradesh are leading the trend, contributing 13 percent and 12 percent of total applications. Among cities, Bengaluru accounts for 3 percent, followed by Pune at 2 percent.
Professional courses continue to draw the most interest. Engineering alone makes up 15 percent of total loan demand. At the same time, more students are now applying for management, medical and skill-based courses, showing a wider mix of choices.
The average loan size stands at Rs 5.24 lakh. But some courses need much higher funding. Pilot training tops the list with an average loan of Rs 28 lakh. Medical courses follow at around Rs 18.98 lakh, while MBA programmes stand at about Rs 9.28 lakh.
The data also show a strong role of self-employed families in funding education. Among MBA applicants, over half of the co-applicants are self-employed. The share is lower in engineering and medical courses but still significant.
Overall, the numbers show a clear trend. Students from smaller towns are stepping up, looking for better career options, and using loans to get there.
