Getting an education loan is a necessary step for Indian students. It helps them cover school fees, travel expenses, and living expenses when studying abroad. Usually, if you have successfully received acceptance into trusted foreign schools and meet some basic rules, you are eligible for these loans.
Students require education loans based on the type of course, the sum they need, and how they wish to repay. The banks generally have varying loan rules. However, they all consider the student’s academic record, the quality of the school, and the financial stability of the co-signer when making a loan decision. For many education loans, students borrow amounts between INR 5 lakhs and 50 lakhs or even more. These loans typically offer flexible options for paying them back.
How to Apply for an Education Loan in India in 2024
Here is a step-by-step guide to help you apply for an education loan:
- Research loan options: Compare banks and financial institutions. Check interest rates, repayment periods, special student loan schemes, and discounts.
- Check eligibility: Review the bank’s criteria based on course type, institution, past performance, and co-applicant’s financial status. Make sure you meet all criteria before applying.
- Choose loan amount and term: Calculate the loan amount for tuition, living, and other costs. Choose a repayment plan that fits your future income and career goals.
- Gather documents: Organize necessary documents for both the student and the co-applicant, such as admission letters, IDs, income proof, and academic certificates.
- Submit the application: Complete the loan application online or at the bank.
- Interview with bank: Attend a meeting or call with bank representatives to discuss the financial profile and answer questions.
- Loan processing and approval: The bank reviews documents and determines eligibility based on financial and academic details.
- Loan disbursement: Receive the sanction letter with terms. Upon signing, the loan is disbursed, often in installments, directly to the education provider.
Important Points to Consider While Looking at Study Loan for Abroad
- Interest rates: Public banks often have lower rates for education loans, while private banks and NBFCs may process loans faster but at slightly higher rates.
- Discounts and subsidies: Some banks offer lower rates for widows and defense personnel. Check for government-backed interest subsidies.
- Bank-university partnerships: Some banks partner with top universities for faster approvals, lower fees, or tailored loan terms.
- Loan tenure and repayment: Most education loans allow you to delay payments during studies and give extra time after graduation. Explore repayment options to keep payments affordable.
- Processing fees and collateral: Processing fees vary by bank. Collateral is usually needed for larger loans. Some banks offer unsecured loans based on student and co-applicant profiles.
Education Loan for Studying Abroad: Advantages
Here are the key advantages of looking for study loan for abroad:
- Dedicated loan for education: Education loans are made specially for students. They include tuition fees, costs of living, travel, and other incidental expenses directly related to learning.
- Tax benefits: Students who sign up for Section 80E of the Income Tax Act of India are allowed to deduct the interest paid on education loans from their tax expenses.
- Financial flexibility: Education loans enable students to achieve their dreams. These are provided without immediate repayment stress. Institutions offer a grace period until course completion and additional time after securing a job.
- Improved credit score: Repaying an education loan helps a student build a good credit history, improving their credit score for future borrowing.
- Flexible repayment options: Education loans often have flexible interest rates and repayment options. This simplifies the repayment process after finishing the course.
- Minimal immediate financial pressure: Reduces the family’s financial burden during the student’s academic years.
- Additional benefits: Many banks offer special deals on overseas loans, such as lower interest rates, conditional refundable processing fees, or partnerships with specific universities.
- No collateral: Some institutions offer collateral-free loans based on the student’s performance, their CIBIL score, the co-applicant’s CIBIL score, and the institution’s ranking.
- Career boost: Education loans help students access top universities and certifications, leading to better job opportunities and higher salaries.
Education Loan Eligibility Criteria in India 2024
The primary eligibility requirements you need to meet in order to apply for study loan abroad include:
- Nationality: The applicant must be an Indian citizen.
- Age Limit: Applicants should typically be between 16 and 35 years of age.
- Academic record: Candidates should have passed their higher secondary examination (10 + 2).
- Admission proof: Original admission letters or enrollment certificates from an accredited institution are needed.
- Course eligibility: Loans are for students in recognized graduate, postgraduate, or professional courses.
- Co-applicant: A guarantor (parent, guardian, or spouse) with a stable income is required.
- Collateral: An education loan above ₹1 cr may need collateral, like property or fixed deposits.
- Income: The minimum income required is ₹ 3LPA, without loan obligations like EMIs, mortgages, etc.
- Creditworthiness: Co-applicant’s credit score shows their ability to repay.
Eligibility requirements for a study loan for abroad universities vary by lender. Applicants should check specific criteria with each bank.
Documents Required to Apply for Education Loan 2024
| Document Category | Applicant | Co-applicant |
| Identity Proof | Passport, Aadhaar, PAN Card, Voter ID | Passport, Aadhaar, PAN Card, Voter ID |
| Address Proof | Aadhaar, Utility Bill, Passport | Aadhaar, Utility Bill, Passport |
| Academic Records | 10th and 12th Mark sheets, Degree Certificates | Not required |
| Admission Proof | Admission Letter from an Educational Institution | Not required |
| Income Proof | Not required | Salary Slips, Form 16, or Income Tax Returns |
| Bank Statements | Bank statements of the past 6 months | Bank statements of the past 6 months |
| Collateral Documents (if applicable) | Property papers, Fixed Deposit receipts | Property papers, Fixed Deposit receipts |
| Passport-Size Photographs | Recent passport-sized photographs | Recent passport-sized photographs |
Additional Technical Documents Required
Some education loans may need technical documentation, especially if collateral is involved or for large loan amounts. Some additional documents required when you apply for study loan include:
- Course fee details: A letter from the educational institution outlining tuition, housing, and other costs.
- Collateral report: A recent valuation of the collateral property by a qualified valuer for secured loans.
- IT assessment orders: Recent income tax assessment orders for co-applicant’s financial capability.
- Employment proof (if part-time): Employment letter or payslips if the student is working.
Manya’s Education Loan Assistance
At Manya, we help students prepare for overseas education and get education loans. All our services aim to simplify the procedure of acquiring a loan with the most favorable terms.
| Service Feature | Description |
| Extensive Loan Funding | Loans up to ₹3 crore cover tuition, accommodation, and other study abroad expenses. |
| Student Guidance | Over 4 lakh students receive expert loan assistance for their study abroad dreams. |
| Financial Partnerships | Partnerships with Avanse, HDFC Credila, IDFC, ICICI, and Mpower provide tailored loan options. |
| Post-Arrival & Housing Assistance | Assistance in finding accommodation abroad and USA SIM cards for instant connectivity. |
| Forex & Banking Services | Helps with forex and setting up US bank accounts; offers Germany block accounts as needed. |
| Remittances & Fee Payments | Streamlined fee payments and remittances with lower charges and faster processing. |
| Comprehensive Solutions | A one-stop solution for education loans and study abroad services, eliminating multiple banks. |
| Dedicated Advisor Support | A personal advisor guides students through the loan application process and answers questions. |
| Convenience | Manya handles all bank-related tasks, saving students from visiting banks or waiting in queues. |
| Customized Document Checklist | Customized document checklists simplify and speed up the application process. |
| Enhanced Conversion Rates | Higher loan approval rates due to Manya’s streamlined process and strong financial partnerships. |
Banks Offering Education Loan for Studying Abroad in India 2024
| Bank | Interest Rate | Maximum Loan Amount | Loan Repayment Tenure | Prerequisite Conditions |
| State Bank of India | For females – 9.65%
For males – 10.15% |
Up to ₹1.5 Cr (Global Ed-Vantage Scheme) | Up to 15 years | Admission to recognized institutions. Co-borrower needed. No collateral for loans up to ₹7.5 lakhs. |
| Bank of Baroda | 9.70% – 13% | Up to ₹80 lakhs (non-premier) / ₹2 Cr (premier) | Up to 15 years | Admission to designated institutes. |
| HDFC Credila | Starting at 10.25% | Up to ₹3 Cr | Up to 15 years | Admission to recognized institutions. Co-borrower needed. Collateral may be required based on loan amount. |
| Axis Bank | 10.25% – 11.50% | 1.5 Cr and condition depending on the income of co-signers | Up to 15 years | Admission to recognized universities. Co-borrower needed. Collateral for unsecured loans above ₹25 lakhs. |
| IDBI Bank | 9.5% – 11% | Up to ₹1.5 Cr | Up to 15 years | Admission to recognized institutions. Co-borrower needed. Collateral for loans over ₹7.5 lakhs. |
| Union Bank of India | 9.30% – 11.30% | Up to ₹1.5 Cr | Up to 15 years | Admission to approved institutions. 15% margin for loans over ₹4 lakhs. Co-borrower needed. |
| Bank of India | 9.95% – 10.75% | Up to ₹150 lakhs | Up to 15 years | Admission to recognized institutions. No margin up to ₹4 lakhs. No collateral for loans up to ₹7.5 lakhs. |
Frequently Asked Questions (FAQs)
How to get an education loan to study abroad?
- To get a study loan for abroad, you need to follow these steps:
- Search for the banks or financial institutions providing education loans and study their terms and conditions.
- Gather the required documents (letters of admission, identity proof, income proof, etc.)
- Apply for study loan with that particular bank. Sometimes, banks can demand collateral for any loan above a particular limit.
- Upon submission, the bank will look at your profile before discrediting the loan.
Which bank is best for an abroad education loan?
There is no one perfect bank for study loan for abroad. It depends on the interest rate, the period of time for the loan to be repaid and the kind of security that the person is willing and able to put on the loan.
Can I study abroad on a 100% loan?
Yes, you can study on a 100% loan if you meet the lender’s criteria. Most banks offer study loans covering fees, accommodation, and other expenses. A guarantor or deposit may be required based on the bank’s terms or loan amount.
Can I get a ₹25 lakhs education loan without collateral?
Of course, the study loan for abroad can be up to ₹1 crore without any collateral, depending on the policies of the concerned bank or any financial company.
How to repay the education loan?
Repayment usually starts after course completion, following a moratorium period of 1 year.
