Small-city aspirations power education loan demand

India's demand for education loans is shifting beyond large cities, with applications from tier II and III cities now making up 86.5% of those received by Kuhoo Finance, according to a report published on Tuesday. Only 13.5% of applications originated from tier I cities. The lender's findings are based on over 2.5 lakh loan applications received between January 2025 and July 2026.

The top states for loan applications were Uttar Pradesh (12.87%), Maharashtra (12.52%), Karnataka (7.16%), Bihar (6.91%), and Tamil Nadu (6.77%). Applications for job training courses accounted for the majority of total disbursements, at 41.70%, followed by MBA programs (29%), online courses (9.80%), engineering (5.50%), and medical education (4.70%).

This data indicates that ambition is no longer confined to metropolitan areas; instead, it is rapidly growing in India's smaller cities and towns. Higher education is becoming more outcome-driven, and students are seeking financing that is transparent, accessible, and aligned with their long-term goals, stated Kuhoo Finance's founder and CEO, Prashant A Bhonsle.