What are the Types of Education Loans for Studying Abroad?
Before seeking out education loans, estimate the expenses of studying abroad. Think beyond tuition fees—there are costs for accommodation, travel, food, and unexpected expenses.
To estimate more accurately, use tools like Education Loan EMI Calculators, which help determine how much you need to borrow.
There are some guides in the Abroadin blog, too, which provide comprehensive lists of expenses in different countries. Just read through this blog.
When you have a ballpark of expenses, it’s time to research education loans for studying abroad from the government or a designated institution. Let’s start from scratch!
There are two main types of education loans:
- Secured Education Loans: These loans require you to pledge collateral (like property or fixed deposits). The advantage is that these loans often have lower interest rates and longer repayment terms. However, you risk losing your assets if you can’t repay the loan.
- Unsecured Loans: These loans don’t require collateral but usually have higher interest rates. A cosigner with a strong credit history is typically needed, which can be challenging if you don’t have someone willing to back you up.
There are some other categorizations, too. For instance, federal vs. private loans. International students can’t apply for federal loans in countries like the US and Canada.
Private loans often have stricter requirements, such as a cosigner or collateral, and eligibility criteria can vary.
Many loans come with a grace period (moratorium) during which you don’t have to repay immediately. However, making small payments is a good idea to reduce the total interest you’ll have to pay later.
Also, consider both the loan tenure and repayment options. A longer tenure means lower monthly payments but more total interest, while a shorter tenure will result in higher monthly payments but less interest in the long run.
What are the Eligibility Criteria for Secured Education Loans?
If you’re applying for education loans for studying abroad, you’ll need to meet some requirements, including:
- You should be 18 years or older.
- You need to have an excellent academic record.
- You should be accepted into a recognized bachelor’s or master’s program.
- You must provide collateral (like property or fixed deposits). Banks will also review your credit history and the reputation of your chosen university.
To increase your chances of getting approved and to make the process easier, keep these tips in mind:
- Do Your Research: Compare loan options, interest rates, repayment terms, cosigner and collateral requirements, and processing fees. The more research you do, the better you understand what loan fits your situation.
- Get Required Documents Ready: Ensure you have all the necessary documents, like your admission letter, proof of residence, passport-sized photos, and financial records for your cosigner (if required).
- Apply Early: Start the application process early to avoid last-minute stress. Loan approval can take time, so give yourself plenty of time to handle your visa and travel plans.
Securing a loan isn’t always easy. Indian students often face these challenges:
- Most loans require a cosigner with a solid credit history. Finding someone who can do this can be a huge obstacle.
- Secured loans require valuable assets as collateral. If you fail to repay the loan, your assets could be at risk.
- Understanding the difference between fixed and floating interest rates can be confusing. Fixed rates stay the same while floating rates can change, leading to unpredictable monthly payments.
There are many education loans for studying abroad, yet you must research thoroughly and prepare your documents. Consider the above tips to increase your chances.
What are Available Education Loans for Indian Students?
Education loans, typically offered by Indian banks, come with various terms and conditions, including repayment schedules and interest rates.
These loans are generally targeted at students pursuing graduate, doctoral, or post-doctoral degrees, although some loans are also available for undergraduate students.
Student Loans, Education Loans for Studying Abroad
These loans generally have lower interest rates compared to personal loans and allow students to start repayment only after graduation.
The student is usually the primary borrower, but parents can co-sign to secure the loan.
It’s beneficial to start repaying these loans in small amounts while still studying to reduce the overall interest.
Interest-Free Loans, Education Loans for Studying Abroad
Some institutions offer interest-free loans to Indian students studying abroad. These loans are usually paid back in installments over approximately five years.
These loans typically do not require the borrower to meet the usual credit qualifications but may involve competitive selection and require repayments to begin before graduation.
Personal Loans, Education Loans for Studying Abroad
If education-specific loans are not sufficient or available, personal loans can be an option. However, these come with higher interest rates and stricter eligibility criteria, such as proof of income and credit history.
Some banks, such as HSBC, offer faster approval processes for existing customers who qualify for personal loans, allowing them to receive funds immediately upon signing a promissory note.
While loans are widely accessible, families should explore other funding sources, such as scholarships and grants, to minimize debt.
Students who need loans should consult a financial advisor to plan repayment strategies and understand the impact on future finances.
📚 If you want to know about Loans for Study Abroad for Indian Students read this article:
20 Education Loans for Indian Students
Now, let’s review some education loans specifically for Indian students who are planning to study abroad. For more information about each one, you must check the institution’s official website.
1. Axis Bank
Axis Bank offers education loans online to cover a wide range of study expenses, including tuition fees, accommodation, books, and travel.
The loan amount can reach up to ₹75 lakhs (~ $88,000), with competitive interest rates and flexible repayment terms of up to 15 years.
Additionally, students can benefit from a moratorium period during which they only need to pay interest while they complete their Global Ed-Vantage.
Apply for an Axis Bank education loan here!
2. State Bank of India
The State Bank of India’s Global Ed-Vantage loan is for students pursuing higher education abroad.
It offers funding up to ₹1.5 lakhs (~ $1,800) crore with a relatively low interest rate and a repayment period of up to 15 years.
This loan covers tuition fees, travel expenses, and other academic costs, making it ideal for students attending top universities worldwide.
Apply for a State Bank of India education loan here!
3. HDFC Bank
HDFC Bank provides education loans with a straightforward application process and a focus on quick approvals. It offers loans up to ₹20 lakhs (~ $24,000) and offers both secured and unsecured options.
The bank also provides services to simplify foreign exchange needs and other pre-departure expenses, ensuring students’ smooth transition to studying abroad.
Apply for an HDFC Bank education loan here!
4. IDBI Bank, Education Loans for Studying Abroad
IDBI Bank offers loans to students aiming to study in prestigious foreign universities, covering tuition fees and living expenses.
It provides flexible repayment terms, with a six-month moratorium period after course completion.
Students can borrow up to ₹20 lakhs (~ $24,000) with competitive interest rates, making it a viable option for financing overseas education.
Apply for an IDBI Bank education loan here!
5. PNB Udaan
The PNB Udaan scheme is designed for students pursuing higher studies abroad. They provide concessional interest rates for female students.
It offers loans up to ₹1 lakh (~ $1,200) crore for courses in prestigious international institutions.
The loan covers essential expenses like tuition fees, travel costs, and living expenses, and it has an extended repayment tenure of up to 15 years.
Apply for a PNB Udaan education loan here!
6. Avanse Financial Services
Avanse specializes in education financing, offering customized loan plans for international studies. Their loans can cover up to 100% of the cost of education.
This financial institution offers flexibility with collateral requirements and covers various costs beyond tuition, such as living expenses, travel, and even gadget purchases.
Apply for an Avanse Financial Services education loan here!
7. Bank of Baroda
Bank of Baroda’s ‘Baroda Scholar’ loan is one of the most popular options among Indian students aiming to study abroad.
It covers up to ₹1.5 lakhs (~ $1,800) crore with favorable interest rates. The repayment period can be extended to up to 10-15 years.
The loan also supports expenses beyond tuition, including examination fees, project work, and travel costs.
Apply for a Bank of Baroda education loan here!
8. Bank of India, Education Loans for Studying Abroad
Bank of India offers education loans for students accepted into recognized foreign universities.
The loan covers course fees and living expenses. Depending on the loan amount, it can be secured with or without collateral.
Students can benefit from flexible repayment terms and a grace period post-completion of their studies.
Apply for a Bank of India education loan here!
9. ICICI Bank
ICICI Bank offers education loans with quick processing and disbursals for overseas education.
The loan covers tuition fees, travel, and living expenses and can be extended up to ₹1 lakh (~ $1,200) crore.
This institution also provides a unique feature allowing pre-approved loans based on a student’s academic performance.
Apply for an ICICI Bank education loan here!
10. Canara Bank
Canara Bank offers education loans for Indian students aiming to study abroad. These loans cover expenses for tuition fees, travel, and other essentials.
The loan amount can be up to ₹20 lakhs (~ $24,000) without collateral; however, collateral is required for loans above ₹7.5 lakhs.
The repayment period can extend to 15 years, giving students a flexible schedule to clear their dues after securing a job.
Notably, there’s also a moratorium on the course duration plus six months or a year after gaining employment.
The bank offers competitive interest rates, with options for interest subsidies under schemes for economically weaker sections.
Apply for a Canara Bank education loan here!
11. Punjab National Bank
PNB offers the “PNB Udaan” scheme for students aspiring to pursue higher education abroad.
This loan can cover up to ₹1 lakh (~ $1,200) crore, and the interest rate varies based on the loan amount and collateral provided.
For loans above ₹7.5 lakhs, collateral security is mandatory. The repayment period can extend up to 15 years; a moratorium period includes the course duration plus one year.
Apply for Punjab National Bank education loan here!
12. Bank of Maharashtra, Education Loans for Studying Abroad
Bank of Maharashtra provides education loans at competitive rates for students pursuing overseas studies.
The bank typically funds loans up to ₹20 lakhs (~ $24,000), with higher amounts possible in exceptional cases. Collateral is required for loans above ₹7.5 lakhs.
The repayment period can go up to 15 years, allowing students enough time to settle into their careers before beginning repayments.
Apply for a Bank of Maharashtra education loan here!
13. Central Bank of India
The Central Bank offers education loans under its “Cent Vidyarthi” scheme to support Indian students pursuing studies abroad.
The bank can fund up to ₹20 lakhs (~ $24,000), with options for a higher amount for deserving students.
Collateral is generally required for loans exceeding ₹7.5 lakhs; the repayment tenure can be up to 15 years.
The interest rate is competitive, with options for subsidies based on the applicant’s socio-economic background.
Apply for the Central Bank of India education loan here!
14. Union Bank of India
Union Bank’s education loan for overseas education covers a wide range of courses. Students can avail of loans up to ₹20 lakhs (~ $24,000), with flexible collateral requirements.
The repayment term extends up to 15 years, and there’s a moratorium period covering the course duration plus an additional year.
Interest rates are kept reasonable, with certain subsidies available for economically weaker sections.
Apply for a Union Bank of India education loan here!
15. Indian Overseas Bank
This bank provides loans for students pursuing studies abroad. The maximum loan amount can go up to ₹ 40 lakhs (~ $48,000).
Loans up to ₹7.5 lakhs do not require collateral, but students need to provide security above this threshold.
The repayment schedule can last up to 15 years with a moratorium period to ease the financial burden post-graduation.
Apply for an Indian Overseas Bank education loan here!
16. IDFC First Bank, Education Loans for Studying Abroad
Known for its quick processing and flexible terms, IDFC First Bank offers education loans that cover tuition fees, living expenses, and other related costs for international studies.
The bank offers loans without collateral up to a specific limit and competitive interest rates. The repayment period can be tailored to suit the student’s financial situation.
Apply for an IDFC First Bank education loan here!
17. Kotak Mahindra Bank
Kotak Mahindra Bank’s education loans fund students planning to study abroad, covering tuition fees and living expenses.
These loans are typically available up to ₹20 lakhs (~ $24,000), with a repayment period of up to 10 years. For loans beyond ₹7.5 lakhs, collateral security is required.
The bank is known for its flexible repayment options and student-friendly interest rates.
Apply for Kotak Mahindra Bank education bank here!
18. IndusInd Bank
IndusInd Bank offers education loans with fast disbursement and flexible terms specially designed for students pursuing higher studies overseas.
Loans up to ₹7.5 lakhs (~ $8,900) may not require collateral, while higher amounts will need security.
The repayment period can extend to 10 years, depending on the loan amount and borrower’s repayment capacity.
Apply for Induslnd Bank education here!
19. Bandhan Bank
Bandhan Bank’s education loan scheme supports students aspiring to study abroad by covering tuition, travel, and other expenses.
The bank offers loans up to ₹20 lakhs (~ $8,900) with flexible repayment periods of up to 15 years. Collateral security may be requiredfor higher loan amounts.
Apply for a Bandhan Bank education loan here!
20. Bajaj Finserv, Education Loans for Studying Abroad
With their education loan, students can secure funding up to ₹25 lakhs (~ $30,000) with competitive interest rates and flexible repayment options.
These loans cover a range of expenses, including tuition fees, accommodation, travel, and other related costs.
A significant advantage of Bajaj Finserv’s education loan is its collateral-free option, particularly beneficial for students who may not have assets to pledge.
Moreover, Bajaj Finserv allows students to choose flexible repayment plans, which can be extended up to 15 years.
Apply for a Bajaj Finserv education loan here!
📚 If you need to know about How to Open Bank Account as an International Student in Canada read this article:
Conclusion
Getting education loans to study abroad is one of the most critical steps in turning your dreams into reality. Start the process by thoroughly reading this Abroadin guide. By doing your research, getting all your documents in order, and exploring flexible options, you can ensure that your financial journey is as smooth as your academic one.
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