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Updated Guide on Education Loan for Abroad Studies
When it comes to funding your education abroad, education loans for abroad studies play a vital role. In this blog, we will discuss the top education loan providers in India and their offerings for students aspiring to study abroad. Study Abroad facilities can be a dream of someone but if you need financial aid you can opt for an education loan to achieve that dream.
1. Education Loan for Abroad Studies
An education loan for abroad studies is a sum of money obtained by a student to pursue higher education in India or abroad. After the student completes their study, the loan payback begins, and students are given a grace period of six months to find or join a job. Your choice of interest will impact the payback amount; you must pick how you wish to repay the loan – whether you wish to begin paying during the moratorium period or after the moratorium period. The Moratorium term is equal to the length of your schooling plus six months or a year to find work. You are only required to repay the loan when this period gets completed. The loan interest begins to accrue at the time of disbursement of money, so by the time you graduate, you will owe a large sum. The other option is for your parents or guardians to begin paying the debt while it is still in the moratorium period.
2. Education Loan Provider for Overseas Studies in India
To help you find the best Education loan for abroad studies in India, we have enlisted the best education loan providers:
|
Name of Bank |
Loan Amount |
Student Loan Interest Rates |
|
State Bank of India |
Upto 1.5 Crores |
10.5% |
|
Punjab National Bank |
Based on Requirement |
Upto 7.5 Lakhs - 11.25% Above 7.5 Lakhs - 11.85% For Education at Premier Universities - 9.85% |
|
HDFC |
Upto 30 Lakhs |
14% |
|
Canara Bank |
Upto 40 Lakhs |
6.90 to 8.80% |
|
IDBI Bank |
Depends on requirement |
Upto 40 lakhs- 8.4% Above 75 lakhs-8.75% |
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Indian Overseas Bank (IOB) |
Upto 40 lakhs |
As per the bank's discretion |
|
Axis Bank |
40 lakhs and beyond depending on the requirement |
40 lakhs and beyond depending on the requirement |
|
Bank of Baroda |
Upto 1.5 Crores |
8.50-9.15% |
|
Avanse Financial Services |
No limit. Depends on the requirement |
11.5%+ floating rate (depends on the risks points of the applicant) |
|
Union Bank of India |
up to 30 lakhs |
6.90 to 8.80% |
2.1 SBI
SBI, the largest government-owned bank in India, offers attractive loan options for education with competitive interest rates, flexible repayment choices, and extended repayment periods. The bank provides loans for professional and technical graduate and postgraduate courses at well-known universities. To apply for an education loan from SBI, you need to submit your admission letter, course expenses, and other necessary documents for identification. The loan covers various expenses such as tuition fees, course materials, travel costs, library fees, laboratory fees, examination fees, a caution deposit, and other essential expenses.
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Education Loan Eligibility |
Citizenship - The candidate must be an Indian Citizen. |
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Must have obtained admission to any of the foreign-recognized universities/institutions. |
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Highlights |
Up to Rs. 1.50 crore in loans, with a minimum loan amount of Rs. 7.50 lacs |
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Favorable interest rate |
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A quick online application process |
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Loan sanction before i20/Visa |
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Repayment through EMI upto 15 years |
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Tax benefit: Under 80(E) |
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The application processing fee is Rs 10,000 |
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Documents Required for Education Loan |
Class 10th, 12th, Graduation mark sheets (if applicable), entrance exam result |
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Offer Letter |
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Course expenses schedule Scholarship letter copies |
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Gap certificate (if applicable) |
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Passport size picture of student/parent/co-borrower |
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Co-applicant's asset-liability statement |
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Last 6 months' bank account statement of parent/guardian/guarantor |
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Latest salary slip and Form 16 (for salaried people) |
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PAN |
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Aadhaar |
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Passport |
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OVD submission |
2.2 PNB
Punjab National Bank (PNB) is one of the renowned public sector banks in India that stands out as a top education loan provider. PNB offers loans for a wide range of academic programs, including graduate or postgraduate diplomas, job-oriented professional or technical courses, and CIMA, CBA, and MBA courses. The loan covers various expenses such as travel, tuition fees, examination fees, library fees, and course materials. PNB has no maximum limit for the education loan, as it is sanctioned based on the applicant's repayment capacity and loan margin. There is no loan margin requirement if the loan amount is less than Rs. 4 lakh.
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Education Loan Eligibility |
Fees reimbursement paid within 6 months might be taken into consideration on the individual merits of the case |
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Margin: Up to Rs 4 lakh - None, Above Rs 4 lac - 15% |
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Maximum upto 15 years of repayment, |
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There are no payment charges |
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Highlights |
Resident of India |
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Should have got admission to a higher education program in recognized institutions outside India via an entrance exam/merit-based selection process after HSC. |
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Documents Required for Education Loan |
Class 10th, 12th, Graduation mark sheets (if applicable), entrance exam result |
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Offer Letter |
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Course expenses schedule Scholarship letter copies |
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Gap certificate (if applicable) |
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Passport size picture of student/parent/co-borrower |
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Co-applicant's asset-liability statement |
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Last 6 months' bank account statement of parent/guardian/guarantor |
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Latest salary slip and Form 16 (for salaried people) |
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PAN |
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Aadhaar |
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Passport |
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OVD submission |
2.3 CANARA
Canara Bank, a trusted nationalized bank, is a great option for education loans because of its favorable terms and conditions. The bank offers loans for a wide range of courses, both in India and abroad. Following the education loan model set by the Indian Bank Association, Canara Bank provides loans based on individual needs. The maximum loan amount is Rs. 40 lakhs for premier institutions and up to Rs. 20 lakhs for other institutions. Canara Bank's education loans cover essential expenses such as university fees, travel expenses, library fees, and book fees.
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Education Loan Eligibility |
Students studying in STEM courses are eligible |
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The student should be an Indian national |
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The college or university must be there in the bank prime institute list |
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Highlights |
Maximum loan amount: Need-based finance |
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Loan margin: 15% for loans taken above Rs. 4 lakhs |
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Repayment tenure: The repayment period is of maximum 15 years |
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Security: Not required for loans below Rs. 4 lakhs. For loan amounts above Rs. 4 lakhs, tangible collateral security is required |
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Interest rate: Collateral Security 100% and above – 9.4%, Collateral Security 75% to 100% - 9.65%, Collateral Security less than 75% - 9.9% |
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Documents Required for Education Loan |
Application form |
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Basic documents for Applicant (student) and co-applicant and/or Guarantor |
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Applicant academic documents |
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Income documents of Co-applicant |
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Additional docs (if applicable) |
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Collateral documents (Optional) |
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PAN |
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Aadhaar |
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Passport |
2.4 Bank of Baroda
The Bank of Baroda (BOB) provides education loans for Indian students who want to study abroad through the "Baroda Scholar" which is a higher education loan program. The maximum loan amount available is Rs. 20 lakhs, and you are required to pay a 15% loan margin. After you secure employment, you will have a transition period of six months to one year before you need to start repaying your loan. This period is also known as the moratorium period.
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Education Loan Eligibility |
Should be an Indian citizen |
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Should have obtained admission to professional/technical programs outside India via entrance exam/merit-based selection procedure |
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Highlights |
Processing fees: 1% (Maximum Rs. 10,000) for loans above Rs. 7.5 lakhs |
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For up to Rs 7.50 lakh there are no processing fees |
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No margin on loans up to Rs. 4 lakhs |
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Free debit card |
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There will be no charges for documentation |
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No security up to Rs 7.50 lakh |
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Documents Required for Education Loan |
Applicant and Co-applicant’s KYC |
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Academic Documents |
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Admission Proof |
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Entrance Exam Result (if required) |
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Statement of Tuition Fees |
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Co- applicant’s proof of income (if salaried) |
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Last 6 month's bank account statement |
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Property document (if applicable) |
2.5 Indian Overseas Bank(IOB)
Indian Overseas Bank (IOB), as a leading provider of education loans, recognizes the requirements of students and offers highly competitive loans for education with reduced interest rates. Each year, IOB's education loans assist numerous students in securing admission to prestigious institutions and colleges both in India and overseas.
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Education Loan Eligibility |
Applicants must be Indian citizens. |
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Applicants must have secured at least 60% in the last appeared exam – 12th or graduation. |
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Applicants must have secured admission in India or Abroad through a proper entrance test or based on merit. |
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Applicants must not be employed. |
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The reputation of the college/university is often considered while providing loans, in cases where admission is not through the entrance. |
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Highlights |
Up to Rs. 1.50 crore in loans, with a minimum loan amount of Rs. 7.50 lacs |
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Favorable interest rate |
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A quick online application process |
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Loan sanction before i20/Visa |
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Repayment through EMI upto 15 years |
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Tax benefit: Under 80(E) |
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The application processing fee is Rs 10,000 |
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Documents Required for Education Loan |
Class 10th, 12th, Graduation The loan application form from the bank is to be filled |
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Two passport-size photos |
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Proof of age |
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Offer Letter from the University |
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GMAT/IELTS/TOEFL/GRE results |
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Proof of residence |
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The Marksheet of the last exam appeared for |
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Co-borrowers’ statement of assets and liabilities |
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Scholarship letter if present |
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Documents supporting the financial status |
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Collateral documents |
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Entrance exam results |
2.6 HDFC
The Housing Development Finance Corporation Limited (HDFC) offers a range of education loans to Indian students who are applying to colleges in India and abroad. HDFC Education Loan ensures complete transparency for applicants, addressing any doubts or concerns about security. HDFC has been a leading company in the market for more than 20 years, building a loyal customer base and maintaining high standards. The education loans offer quick disbursement, simple documentation, and competitive rates and charges. Students receive financial support for all major expenses throughout their course duration.
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Education Loan Eligibility |
Between the ages of 16 and 35, Indian residents |
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All full-time programs require a co-applicant, who might be a parent or guardian, or a spouse or parent-in-law. |
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Students must have been accepted into a higher education program at a recognized institution in India or abroad either an entrance exam or a merit-based selection process. |
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Highlights |
HDFC Education Loan for studies abroad covers expenses like hostel fees, book fees, tuition fees, along with travel expenses. |
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Borrowers must pay 1.5% of the total loan amount as processing fees. |
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The loan finances up to 100% of the cost of education and also approves loan amounts above Rs 20 lakhs. |
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If the education loan is pre-closed within 12 months from the date of the agreement, then applicants have to pay 4% of the principal amount as prepayment charges. |
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The tuition fees and the hostel fees are disbursed directly to the institutions to which the students have been admitted. |
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Education loans taken for studies abroad have to be repaid in monthly installments. |
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Documents Required for Education Loan |
Address proof |
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Identification card |
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Application form |
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Passport-size photographs |
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Admission Letter |
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Income proof of the guarantor |
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Collateral Security documents |
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GRE/IELTS/TOEFL/GMAT Score |
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10th and 12th exam mark sheets |
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Latest 6 Months Bank Statement of the Salary Account. |
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Latest 2 Salary Slips carrying the date of joining details |
2.7 IDBI Bank
The IDBI education loan includes coverage for university fees, travel expenses, exam fees, lab fees, library fees, the cost of computers, book and equipment fees, and other related expenses. IDBI Bank approves the loan amount based on the borrower's needs and loans below Rs. 4 lakhs do not require any collateral or security.
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Education Loan Eligibility |
Students must be Indian nationals including NRIs |
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The student should secure admission to an IDBI-recognized institution abroad through academic merit or an entrance test. Examples of IDBI-recognized institutions are those featured in the rankings by QS, Webometrics, etc. |
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The course of study must be listed by IDBI |
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Highlights |
Flexible tenure and loan enhancement facility |
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Attractive interest rate |
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Maximum loan amount: Up to Rs. 30 lakhs |
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Repayment tenure: Maximum of 15 years after the completion of the moratorium period |
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Interest rate: Upto 7.5 lakhs – 9%, Above 7.5 lakhs – 9.5%, 0.5% concession for female student |
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A third-party guarantee is required for loans between Rs. 4 lakhs and Rs. 7.5 lakhs. An education loan has to be taken along with a co-borrower. 100% collateral security is required for loans more than Rs. 7.5 lakhs |
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Documents Required for Education Loan |
Address proof |
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Identification card |
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Application form |
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Passport-size photographs |
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Admission Letter |
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Income proof of the guarantor |
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Collateral Security documents |
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GRE/IELTS/TOEFL/GMAT Score |
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10th and 12th exam mark sheets |
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Latest 6 Months Bank Statement of the Salary Account. |
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Latest 2 Salary Slips carrying the date of joining details |
2.8 Axis Bank
Students have the option to apply for education loans to study abroad, specifically for technical, professional, or career-focused courses. Axis Bank offers student loans with no maximum limit, starting at INR 50,000, and can cover up to 100% of the total study expenses, which includes course fees, book costs, living expenses, and travel expenses. The loan amount provided depends on the individual's requirements and qualifications. The process of obtaining an education loan with Axis Bank is straightforward and hassle-free.
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Education Loan Eligibility |
Indian citizenship holder |
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Minimum 50% marks in HSC and graduation |
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Students should be enrolled in career-oriented programs at the graduate or postgraduate level |
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Should have got admission from a recognized institute via entrance exam/merit-based selection process after completing HSC |
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Parent/guardian should have a regular income source |
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Highlights |
No margin on education loans up to Rs 4,00,000 |
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15% margin on education loans up to Rs 4,00,000 for abroad studies |
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The education loan which you will take can be disbursed within two days after getting sanctioned |
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One can also pay the older installments which are paid towards the course re-financed once the loan is approved |
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Documents Required for Education Loan |
Income Statements |
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Last 6 months' bank statement/passbook |
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Offer Letter's copy with fee schedule |
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Mark sheets of SSC/HSC/ degree courses/national level entrance exams |
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Proof of Age |
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Proof of Address |
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Photo ID |
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Passport-size pictures of applicant and co-applicants |
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Guarantor form (not mandatory) |
2.9 Avanse Financial Services
Avanse provides different types of loans such as loans for pre-visa disbursement, fast-track loans, pre-admission loans, and certificates of availability of funds. When applying for an Avanse education loan, borrowers need to submit their KYC documents, course fees, collateral documents, income documents, and other necessary paperwork. The Avanse education loan covers various expenses including tuition fees, travel costs, living expenses, fees for books and equipment, and other related expenses.
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Education Loan Eligibility |
Are Indian citizens who are 18 or older |
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The loan applicant must have a co-applicant who can be a blood relative, with a regular source of income and good credit history. |
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The course of Study must be listed by Avanse |
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Highlights |
The loan will get sanctioned within 72 hours |
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Students can choose between secured and unsecured loan options |
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Interest rates start from 9.5% and 1% onward processing fees |
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The repayment option is flexible |
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Loan tenure up to 15 years |
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Maximum loan limit can be customized according to the borrower’s requirement |
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Documents Required for Education Loan |
Income Statements |
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Last 6 months' bank statement/passbook |
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Offer Letter's copy with fee schedule |
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Mark sheets of SSC/HSC/ degree courses/national level entrance exams |
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Proof of Age |
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Proof of Address |
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Photo ID |
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Passport-size pictures of the applicant and co-applicants |
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Guarantor form with required documents (mandatory) |
2.10 Union Bank of India
The Union Bank of India provides education loans to students holding excellent academic qualifications to pursue technical/higher/professional education in India or abroad. It should be noted that the parent of the applicant must apply as a co-applicant. If the student is married, his/her spouse/parent or in-laws can act as co-applicant. If the applicant does not have parents (not alive) his/her guardian or close relative can act as co-applicant. Also, the co-applicant must be an Indian citizen. Courses covered include Ph.D. courses, Graduation/post-graduation degree courses, CIMA, London, CPA, USA (and other similar institutes) conducted certified degree courses. Please note that overseas Diploma courses won't be covered
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Education Loan Eligibility |
Applicant must be holding Indian nationality |
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Applicant should have been accepted in an Indian institution or abroad for technical/higher/professional education by clearing the relevant exam and selection procedure |
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No maximum or minimum age criteria have been set for this |
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Highlights |
No minimum loan amount has been fixed for the loan that can be approved under the education loan scheme. |
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Only after considering the account margins norms will the need-based finance meet the expenses. |
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Expenses covered include hostel charges, tuition fees, examination/library/lab costs, the insurance premium for the student borrower, caution deposit/building fund or refundable deposit, books/equipment/uniforms purchase, computer/laptop costs, travel charges, admission acceptance fee, and other expenses. |
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Students will have to repay the loan amount within 15 years (after the course and moratorium period). |
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Documents Required for Education Loan |
Application form and credit information |
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KYC documents |
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Income Proof (for salaried) |
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Last 6 months' bank statement |
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Property documents |
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Additional Documents |
3. Last tips for Education loan for abroad studies
Getting an education loan can be a great way to finance your education. However, it is important to remember that it is a loan, and you will have to repay it with interest. So, make sure you only borrow what you need and that you can afford the monthly repayments. Here are some tips for getting an education loan:
The earlier you start the application process, the more time you will have to compare different lenders and terms.
Compare the different lenders and terms before you apply for a loan.
The lender will need proof of your income, expenses, and academic qualifications.
A co-signer is someone who will agree to repay the loan if you cannot.
The monthly repayments will be a significant part of your budget, so make sure you can afford them.
4. Conclusion
Choosing the best education loan provider is crucial for students and their families to ensure smooth financing of higher education. Education loans for abroad studies in India offer various options to fund your dreams of studying abroad. Each bank has its eligibility criteria, interest rates, and loan terms, so it's essential to research and choose the one that best suits your needs. Remember to carefully review the terms and conditions before applying for an education loan to ensure a smooth financial journey during your higher education abroad.
5. Who are we!
We are a Career Clinic, a trusted study abroad consultancy, committed to helping students achieve their dreams of pursuing higher education abroad. With our expertise and guidance, you can navigate the complex process of studying at international universities and securing the right education loan. Connect with us today for intake 2024.
Frequently Asked Questions
Yes, in most cases, you can apply for an education loan for a wide range of courses abroad. Many education loan providers cover various disciplines, including technical, professional, and academic programs. However, specific eligibility criteria and requirements may vary by bank. It's advisable to check with the respective bank to ensure your desired course qualifies for an education loan before applying.
Generally, there are no strict age restrictions for applying for an abroad education loan. Many banks and financial institutions provide education loans to students of various age groups who have secured admission to recognized institutions abroad. However, it's important to note that some lenders may have age-related criteria or preferences. It's recommended to check with the specific education loan provider to understand their age eligibility requirements before applying.
For applying for an abroad education loan, typically required documents include academic transcripts, an admission letter from the institution, KYC documents (identification and address proof), income proof of co-applicant/guarantor, collateral details (if applicable), course fee structure, details of the course, passport-size photographs, and relevant entrance exam scores (if required). It's important to check with the specific bank for their exact documentation requirements and any additional documents needed.
Yes, some banks offer the option to apply for an education loan before receiving the admission letter. This allows you to secure the loan sanction in advance, making the financial planning process smoother. However, specific policies vary by bank, and some may require the admission letter for final approval. It's advisable to check with the bank you're interested in for their specific requirements and procedures.
Yes, many banks allow borrowers to prepay their education loans before the completion of the tenure. However, it's important to note that there might be prepayment charges associated with early repayment. These charges vary depending on the bank and loan agreement. Before making any prepayments, it's advisable to check with your loan provider to understand the specific terms and conditions related to prepayment.
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