Shahid Mustaq Murshed Study Abroad Content Specialist
Study Abroad Content Specialist
Highlights:
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Indian students aged between 18-35 are eligible for education loans
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If you are under 18, then your parents must apply for the loan on your behalf.
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Some popular education loan providers are HDFC Bank, ICICI Bank, State Bank of India, Punjab National Bank
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Interest rates for education loans range between 8.64% to 12% annually
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Documents required for education loan include passport, admission letter, income proof, test score cards and other
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Majority of the loans cover tuition fees, living expenses, travel expenses, etc
The cost of higher education in foreign countries can be a significant financial burden for most families. Here comes the education loans at your rescue. Education loans for abroad studies have a longer repayment time of 12-15 years. These loans can cover the cost of tuition fees, accommodation, travel, and other related expenses. Education loans for abroad studies usually have a lower interest rate than personal loans, making them a more affordable option for students. Interest rates can be as low as 8.64%. With an education loan you can choose any of the top universities to study abroad. Some popular loans for overseas study are the following
- HDFC Bank study loan abroad
- Education loan from ICICI Bank
- State Bank of India abroad education loan
- Bank of Baroda overseas education loan
- Indian Overseas Bank education loan
- Canara Bank student loan abroad
You must be an Indian citizen, between the age of 18-35 while applying for a loan. You also need to provide documents like acceptance letters, academic transcripts among others. Before applying, confirm with the lender if your desired university is a part of their approved list. If not, explore alternative lenders that have a more extensive network of approved institutions.
Table of Content
Types of Student Loans for Overseas Study
There are several types of overseas education loans available to students who wish to pursue higher education abroad. Some banks or loan providers may also ask for a study abroad student visa application, at the time of loan application. The type of education loan for abroad and its terms and conditions can vary depending on the lender. Here are the different types of education loans based on the lenders
Secured Education Loan
A secured education loan is a type of loan where you need to provide collateral such as property or fixed deposits to secure the loan. The collateral acts as a security for the lender in case the borrower fails to repay the loan. These are also called as foreign education loans with collateral. As a result, secured education loans for abroad studies come with a lower interest rate compared to unsecured loans
Unsecured Education Loan
An unsecured education loan is a type of loan that does not require the borrower to provide any collateral to the lender. As there is no security provided, the interest rates on unsecured education loans are higher compared to secured education loans. These are also called abroad education loans without collateral. Additionally, the loan amount sanctioned for unsecured education loan for abroad studies is relatively lower.
Also Explore: Scholarships to Study Abroad
Best Student Loans for Students Studying Abroad
There are several Indian agencies that provide education loans to students looking to pursue their studies abroad. Some of the best Indian agencies for education loans to study abroad are mentioned below along with the average loan amount and interest rates:
| Major Lenders | Types of Education Loans | Loan Amount | Interest Rates |
|---|---|---|---|
| State Bank of India, Bank of Baroda, Punjab National Bank, Union Bank of India | Loans from Public-Sector Banks | Up to INR 7.5 Lakhs | Better interest rates than private lenders, tax benefits under Section 80E available |
| ICICI Bank, Axis Bank | Loans from Private Banks | Depends on various factors | Higher interest rates than government banks, lower than NBFCs, tax benefits under Section 80E available, faster processing time |
| HDFC Credila, Avanse, InCred, Auxilo | Loans from Non-Banking Financial Companies (NBFCs) | Depends on various factors | Higher interest rates than government and private banks, no tax benefits under Section 80E, faster processing time |
| Prodigy Finance, MPOWER Financing | Loans from International Lenders | Depends on target study destination and loan product offered | No collateral or co-applicant required, limited list of colleges and countries, loan amount in foreign currencies |
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Top Banks for Foreign Study Loan
There are several banks in India that have dedicated loan schemes designed specifically for students who want to pursue higher education abroad. Mentioned below are a few of the top banks offering education loan for overseas studies
HDFC Bank Study Loan Abroad
Education loan HDFC Credila is India’s first education loan company. From its birth, HDFC Credila has funded 178,000+ Indian students pursuing 3,300+ programs across 4,600+ institutes in 63 countries.
| Parameters | Values |
|---|---|
| Loan amount | Entire cost of education with no upper limit with collateral Unsecured loan up to 45 Lakhs |
| Interest rate | 8.64% (floating rate) |
| Costs covered | Up to 100% of other expenses including living and hostel expenses, traveling expenses, examination fees, library/laboratory fees; purchase of books |
| Tenure | 14 Years including the Moratorium Period |
| Collateral | Fixed deposits or Flat, House, Bungalow, Land (Non-Agricultural), Shop, etc. |
| Processing fee | No prepayment charges |
SBI Education Loan for Abroad
SBI's premier student loan scheme, the Global Ed-Vantage education loan scheme, is specifically designed for students who aspire to study abroad. The scheme offers students an opportunity to secure their education funding at remarkably low-interest rates.
| Parameters | Values |
|---|---|
| Interest Rate | 11.15% (0.50% concession for female students) |
| Loan amount range | INR 7.5 Lakhs to INR 1.5 Cr. |
| Loan Margin | 10% |
| Total Loan Tenure | Up to 15 years |
| Total Expenses covered by the education loan | Tuition Fees, Living expenses, Study aid expenses, travel expenses, library fees, etc |
| Average moratorium period | course duration + 6 months (can be extended to a year) |
| Processing Fees | Rs. 10,000 |
Punjab National Bank Education Loan
PNB Udaan is an education loan scheme offered by Punjab National Bank for students who want to pursue higher education abroad. Under this scheme, students can avail of financial assistance to cover expenses such as tuition fees, travel expenses, living expenses, and other related costs
| Loan amount range | Need-based finance |
| Interest rate | 11.75% |
| Loan Margin | Up to INR 4 lakhs - NIL Above INR 4 lakhs - 15% |
| Total Loan Tenure | Up to 15 years |
| Total Expenses Covered | All expenses related to the course abroad |
| Processing Fees | 1% minimum INR.10000/- (Refundable after 1st Disbursement) |
| Moratorium Period | Course period + 1 year |
| Repayment Period | Maximum up to 15 years |
Canara Bank Student Loan Abroad
Canara Bank provides education loans for studying abroad under the IBA's model loan product for higher studies in India and Abroad scheme. This scheme is available for both undergraduate and postgraduate courses, and students who want to pursue their studies abroad can apply for an education loan.
| Maximum Loan Amount | Need-based financing. For studies in India: INR 10 Lakhs |
| Canara Bank education loan ROI | 11.15% |
| Eligible Courses | Undergraduate (Bachelors), Postgraduate(Masters), Ph.D., PG-Diploma Courses, etc. |
| Loan Tenure | Up to 15 years |
| Moratorium period duration | Course period, plus one year |
| Loan Margin | For loans of up to INR 4 Lakhs: Nil For loan amounts above INR 4 Lakhs -15% |
| Processing Fees | Nil |
Bank of Baroda Student Loan for Abroad
Baroda Scholar loan program is available for MBA, MCA, MS, and other approved courses. It is targeted to students going abroad for vocational/technical studies. Some other details of Bank of Baroda student loan for abroad.
| Parameters | For universities in premier list | For universities in non-premier list |
|---|---|---|
| Loan Amount | Up to INR 1.5 crores | Up to INR 60 Lakhs |
| Interest Rate | 10.60% | 11.25% |
| Expenses Coverage | Tuition + All expenses related to the candidate’s course | Tuition + All expenses related to the candidate’s course |
| Loan Margin | 0% | Up to INR 4 lakhs - NIL Above INR 4 lakhs - 10% |
| Repayment Period | Up to 15 Years | Up to 15 Years |
| Moratorium Period | Course Duration + 6-12 Months | Course duration + 6-12 Months |
| Processing Fees | 1.00% of loan amount (refundable) (maximum 10,000/-) A non-refundable lump sum amount of INR 7,500 per property as Legal and Valuation charges | 1.00% of loan amount (refundable) (maximum 10,000/-) A non-refundable lump sum amount of INR 7,500 per property as Legal and Valuation charges |
| Processing Time | 15 Days if processed through our team | 15 Days if processed through our team |
Eligibility for Study Loan for Abroad
The requirements for receiving student loans might differ from one bank to another. Nonetheless, some of the general requirements for education loan for overseas education include:
- Indian Citizenship: The applicant must be an Indian citizen or have a valid Indian passport.
- Age: Applicants must be between 18 and 35 years old at the time of application.
- Academic Record: Students must have a good academic record with a minimum of 60% marks in their previous degree or qualifying examination.
- Admissions: Applicants must have secured admission to a recognized university or institution for the course they wish to pursue.
- Co-applicant: Most banks require a co-applicant who has a steady income source and can provide collateral security for the loan.
- Credit Score: Applicants should have a good credit score and no history of defaulting on loans or credit card payments.
Documents Required for Student Loan for Study Abroad
To apply for a student loan for abroad, you will need to submit various documents, including proof of university admission, academic records, and financial statements. Also, you must fulfill specific requirements in order to be eligible for the loan to study abroad.
- Admission Letter: Proof of admission to a recognized university or institution abroad.
- Passport: A valid passport is required for identity verification and travel purposes.
- Academic Documents: Mark sheets, degree certificates, and other academic transcripts to prove academic eligibility.
- Income Proof: The co-applicants income documents, such as salary slips, income tax returns, and bank statements.
- Collateral Documents: If the collateral is required to secure the loan, relevant documents such as property papers, fixed deposit receipts, and other asset documents.
- Loan Application Form: The application form provided by the lender must be completed with accurate information.
- Photographs: Passport-sized photographs of the applicant and co-applicant.
- Test Scores: Scores of standardized tests such as TOEFL, IELTS, GMAT, or GRE, if required by the lender.
- Other Supporting Documents: Any other documents that the lender may require, such as visa documents, travel itinerary, etc.
Education loans for studying abroad can help students finance their education and achieve their academic goals. By understanding the basics of education loans, eligibility criteria, and the best banks to approach, students can make informed decisions and secure the necessary funding for their studies abroad. There are several education loans for abroad studies by the Indian Government as well.
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FAQs
Ques: What are the eligibility criteria for education loans for studying abroad?
Ans: Eligibility criteria for education loans vary depending on the country and the financial institution providing the loan. However, common requirements include admission confirmation from a recognized institution abroad, a good academic record, collateral security (sometimes), and a co-applicant who meets the income and credit score criteria.
Ques: What documents are needed to apply for an education loan for studying abroad?
Ans: You need documents such as admission letter from the institution abroad, completed loan application form, mark sheets/certificates of your educational qualifications, proof of identity and residence, income proof of co-applicant, collateral documents (if applicable), and any other documents specified by the lending institution.
Ques: What is the interest rate on education loans for studying abroad?
Ans: Interest rates can vary depending on factors like the lender, loan amount, co-applicant's credit score, and the prevailing market conditions. Generally, interest rates for education loans for studying abroad can range from around 8% to 15%. It's advisable to compare rates from different lenders to find the best option.
Ques: Can I get a loan without collateral?
Ans: Some banks offer education loans for studying abroad without collateral for certain courses and loan amounts. However, loans without collateral often come with higher interest rates. If you don't have collateral, you might need a co-applicant with a strong financial background to secure the loan.
Ques: When do I have to start repaying the education loan?
Ans: Repayment starts after the completion of the course, or after a moratorium period of 6 months to 1 year post-course completion, allowing time for finding a job. Some lenders may offer a longer moratorium period for certain courses. However, interest accrues during the moratorium period, so it's wise to start repaying as soon as you can afford to.
Ques: Are there any tax benefits associated with education loans for studying abroad?
Ans: in many countries, including India, you can claim tax benefits under Section 80E of the Income Tax Act for the interest paid on education loans. This deduction is available for a maximum of 8 years or until the interest is fully repaid, whichever is earlier. It's essential to retain all loan-related documents to avail of this benefit.
Ques: Which bank is best for education loans abroad?
Ans: HDFC, ICICI, Bank of Baroda, Canara Bank are among the better options for education loans for abroad.
Ques: Can I get a 100% loan to study abroad?
Ans: Being an Indian student, you can get 100% loan to study abroad. Check the requirements and eligibility with your lender to know further details.
Ques: Can I get a 20 lakhs education loan without collateral to study abroad?
Ans: It depends on the lender and the loan type. If your desired university is listed among the approved universities list to your lender, then chances are there for getting a 20 lakhs education loan without collateral.
Ques: What is the eligibility for an abroad education loan?
Ans: Eligibility may vary depending on the loan type, lender, course and other parameters. You must be an Indian citizen within the age group of 18-35 is the basic eligibility.
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