Education Loans For Study Abroad 2023: Indian Banks, Interest Rate, Eligibility

  • Team MasterPrep
  • minute read
  • Mar 01, 2023 12:00 PM

Going overseas for studies? This blog will help you learn about education loans for study abroad. The blog informs about some advantages of these loans, few banks and NBFCs that offer such loans. The blog also talks about what is the general eligibility criteria for obtaining student loans for going overseas.  

Education Loans for Study Abroad

Even though it can change your life, choosing to study abroad is not always simple. Most students associate studying abroad with the prospect of gaining new experiences in a foreign land. However, this objective can be out of reach for students from low-income families.

There is now a way for people who desire to pursue higher education abroad but are having trouble finding the money to do so. We will go through every aspect of student loans for international studies in this article. whether it be the eligibility requirements, the loan application process, or the paperwork needed. We will also discuss a number of additional topics relating to student loans, such as the role of a guarantor.

Also read : Education Abroad Terms | Common Terms Related to Education Abroad

Advantages of education Loans for Study Abroad

Occasionally, the family's money and resources might not be enough to pay for the student's education. For a student loan in such circumstances, banks or other financial institutions must be contacted (NBFC). A student loan can be used to cover all or a portion of your educational costs.

A student who obtains a study abroad education loan is ensured that they will have enough money to finish their degree programme without running into any financial difficulties. Many people view loans as terrible debt. This phrase implies that you are taking out a loan for something whose value will eventually decline. Since it is an investment in the borrower, an education loan differs from other types of loans. You will eventually make far more money from this than you lent.

Top Education Loan Providers in India

Name of bank Loan Amount Student loan interest rates per annum
State Bank of India Up to 1.5 crores 10.5%
Allahabad Bank 50 lakhs 7.15% to 10.5%
Axis Bank 40 lakhs and beyond depending on requirement Upto 4 lakhs- 15.2%
Upto 7.5 lakhs- 14.7%
Above 7.5 lakhs- 13.7%
HDFC Upto 30 lakhs 14%
Credila No limit. Depends on requirement 12.10%+ floating rate(depends on the risks points of the applicant)
Punjab N ational Bank (PNB) Based on requirement Upto 7.5 lakhs- 11.25%
Above 7.5 lakhs- 11.85%
for education at premier foreign universities- 9.85%
IDBI Bank Depends on requirement Upto 40 lakhs- 8.4%
Above 75 lakhs-8.75%
Indian Overseas Bank (IOB) Upto 40 lakhs As per bank's discretion
Bank of Baroda 1,50,00,000 8.50-9.15%
Avanse Financial Services No limit. Depends on requirement 11.5%+ floating rate(depends on the risks points of the applicant)
Syndicate Bank up to 40 lakhs 6.90 to 8.80%
Canara Bank up to 40 lakhs 6.90 to 8.80%

Also read : How to Study abroad after 12th?

Documents Required for education Loan to  Study Abroad

Document type Applicant Co-applicant
Date of Birth Birth Certificate, Passport, Voter card with DOB, College Passing Certificate, PAN Card, Driving license, Aadhaar Card  
Residence Proof (if owned) Electricity Bill, Municipal Tax Receipt, Share Certificate, or Title Deed (with Flat No.)  
Residence Proof (for a rented property) Registered Rent agreement (with utility bill), Landline phone bill, Post Paid Mobile Bill, Bank statement., Passport, Driving License, Voter ID, and Aadhaar card  
Aadhaar Aadhaar card  
PAN Card Copy of PAN / Form 60 if PAN is not available  
Signature Signature verification from the bank, Passport, Driving License, and PAN Card (all IDs should match with your current signature)  
Relationship proof Passport, Pan, Aadhaar card, Marriage certificate, Birth certificate, Legal heir certificate, Ration card, or any other acceptable documents  
Academic documents 10th,12th, UG or PG mark sheets, degree or provisional degree certificate, and applicable entrance test scores Registration certificates for Professionals (CA, Doctor)
Income proof - Salaried Documents to establish 3 years of work experience where ever applicable and available Latest  3 salary slips, Bank Statement of last 3 months, Form 16,
2 years ITR with the statement of income, Income certificate from Tehsil/collector's office
Office Address NA Form 16/ Salary slip/ Letter from HR/ Snapshot of site/Identity card
Admission proof Invite/admission letter from University/college and Fee structure NA

Also read : Cheapest Countries for Indian students to study abroad

Technical Documentation Required for education Loan to Study Abroad

To avail student education loan to study abroad, a student must have other technical documentation mentioned as follows which is apart from the above documentation:

  • Title deed: All pages need to be attached
  • Copy of approved layout plan and permissions, this is specific and is on case to case basis
  • Revenue document (Khata / Patta)
  • Allotment Letter and NOC for BDA allotment
  • Non Encumbrance certificate
  • In case the apartment/flat is taken from a builder, a possession certificate is required
  • Recent Property tax receipt
  • Copy of Prior Sale deeds
  • Conversion certificate
  • Urban Clearance Certificate. This is also case-specific.

Legal Documentation Required for Education Loan to Study Abroad

Other than the standard and technical documentation a student also requires the following legal documentation to apply for education loan for study abroad:

  • Sale /gift/partition deed in favour of customer – This should be for a minimum of 13 years
  • Khata Certificate and extract in the name of the current owner
  • Encumbrance certificate – Minimum 13 years reflecting all sale transactions
  • Latest Property tax receipt
  • Crowd Funded Companies as Loan Providers in India

Crowd Funded Companies as Loan Providers in India

The support of students is a focus for several businesses. To preserve security, these companies only provide loans to students enrolled in specific colleges. They offer loans in the country's local currency where the student will be enrolled in school. Returning the borrowed funds in the same currency is required.

Institution Providing loan Amount of Loan Eligibility
MPower Financing US $2001 - $ 100,000
  • An undergraduate or graduate student within 2 years of graduating or about to begin a 1-year or 2-year program.
  • An international student, DACA recipient, U.S. citizen, refugee, or asylum-seeker.
  • Admitted to or attending one of our 400+ approved schools in the U.S. or Canada.
Avanse Financial Services INR 10 Lacs – INR 75 Lacs
  • If you are applying for an education loan, you must be an Indian citizen.
  • You must be 18 years or above.
  • You need to have a confirmed admission from your university. Educational institutions offer a Confirmation of Acceptance for Studies (CAS) letter once you secure a university seat in the respective university.
  • Most education loan providers will require a co-applicant to offer a student loan to you. Co-applicant can be your parent, sibling, legal guardian, or a relative.
Spoctree INR 8-15 lacs
  • Must be an Indian National
  • Must be 18 or above. 
Varthana Up to INR 5 Lacs
  • You are an Indian Citizen.
  • You are 16-35 years old
  • You have a good academic record.
  • You are admitted or seeking admission to a recognized university/institution.

Also read : Study Abroad Scholarships

Things to Consider Before Applying for an Education loan to study Abroad

  1. Moratorium Period: The time during which the borrower is not required to pay back any money to the lender is called the moratorium period. This time varies for bank to bank and could be for a certain time period from the completion of the course.
  2. Loan Margin: Generally, banks do not give out the complete education loan, that is, they do not give 100 percent amount of the education loan. Most of the public sector banks issue 90 percent of the total education loan amount and the remaining 10 percent is to be managed by the student.
  3. Exchange Rate Effect: As a student you should always check the amount you will receive while disbursement because exchange rate can effect this amount.  

Also read : Statement of Purpose | How to Write | Format

Eligibility for Student Loan in India

Checking your eligibility to qualify for an education loan should be your top priority. The standard terms and conditions that are typically followed by any bank when granting an education loan are listed below. Please be aware that each bank may have its own qualifying requirements, which must be followed when applying to that specific bank.

  • The applicant must be a citizen of India.
  • The applicant's parents must take out the loan if the applicant is under the age of 18.
  • The applicant needs to have an outstanding academic history.
  • The applicant must have received admission to a respectable college, university, or institution abroad.
  • The applicant's chosen course must be technical or professional in character because banks prefer courses that are employment-oriented.
  • Underwriting norms are the guidelines established by lenders to ensure that only risk-free loans are made available. They are also significant since they are used to decide how much money the company is willing to loan and at what interest rate, as well as whether or not to offer a person a study loan for an overseas course of study.

After going through this blog, you will be able to select, find your eligibility and apply for an education loan if you are considering studying abroad. This will assist in making your journey of going overseas easier. It will be a smooth sailing now onwards, especially when your financial needs have been met. 

Also read : Letter of Recommendation (LOR) for USA: Guidelines for UG & PG Courses, Writing Tips & Requirements