India's education loan market is experiencing a significant geographic shift, with students outside major metropolitan areas now driving demand. According to data released by education financing platform Kuhoo on August 18, Tier 2 and Tier 3 cities accounted for 86.5% of loan applications received between January 2025 and July 2026. In contrast, only 13.5% of applications came from Tier 1 cities, marking a clear trend away from metropolitan centers. The platform received more than 2.5 lakh education-loan applications seeking loans worth ₹7,500 crore during this period, as reported by The Economic Times. By embedding financing directly into the student admission journey, Kuhoo is simplifying the path to higher education across undergraduate, postgraduate, and professional programmes.
Among states, Uttar Pradesh led education loan demand with 12.87% of applications, narrowly ahead of Maharashtra at 12.52%. Karnataka followed with 7.16%, while Bihar accounted for 6.91% and Tamil Nadu 6.77%. The remaining top 10 states included Andhra Pradesh, Madhya Pradesh, Telangana, West Bengal, and Rajasthan. This geographical spread indicates that students in smaller cities and towns are increasingly willing to take on debt to finance professional and higher education, as reported by The Economic Times.
The data reveals a clear shift toward employment-oriented education choices among borrowers. Job training programmes accounted for 41.70% of total disbursals, making them the largest category. MBA programmes followed with 29%, while online courses represented 9.80% and engineering 5.50%. Medical education accounted for 4.70% of disbursals. Together, job training and MBA programmes accounted for 70.7% of disbursals, suggesting students are increasingly viewing education as an investment in employability rather than simply as a qualification. As reported by The Economic Times, students from Tier 3 cities may be willing to borrow ₹3-5 lakh for specialized job-training programmes if they offer clear pathways to better-paying employment.
The data reflects a fundamental shift in India's education financing landscape, with ambition no longer concentrated in metros but rising fastest in smaller cities and towns. According to Prashant A. Bhonsle, Founder and CEO of Kuhoo, as reported by The Economic Times, students want financing that is transparent, accessible, and aligned with their long-term goals. The trend indicates that higher education is becoming increasingly outcome-driven, with students seeking loans for programs that can translate into better employment and income opportunities. For families in smaller cities, education loans can provide access to professional programs that might otherwise be financially out of reach due to insufficient household income. As India's higher education landscape becomes more diverse and career-focused, Kuhoo remains committed to bridging the gap between aspiration and access by making education financing simpler, more transparent, and available to students regardless of geography or income profile.
