Studying abroad is a dream for many Indian students, who have dreamed of it since childhood because it offers quality education and masters students in various perspectives like exposure to world-class education, better career opportunities, and cultural experiences. However, Indian students find financing international education a little challenging due to their high tuition fees and cost of living. This is where student loans in India play a game-changing role. In India, students can rely on or get help from various banks and financial institutions that offer education loans for international studies, helping them pursue their dreams and academic aspirations without worrying about financial limitations.
Here is a detailed blog of how to get a student loan in India for studying abroad. It covers all the information you need, including eligibility criteria, required documents, loan application processes, the best banks for study abroad loans in India, and government schemes for study abroad loans.
Student Loans in India for Studying Abroad
A student loan in India is a financial aid offered by banks and non-banking financial companies (NBFCs) to aspiring students willing to study abroad and manage their tuition fees, accommodation, and travel expenses. The advantages of getting these student loans are their flexible repayment options and moratorium periods, which prevent students from financial exhaustion.
Features of Study Abroad Loans in India
- Covers tuition fees, living expenses, travel costs, and insurance.
- Interest rates typically range between 8% to 15%
- Loan repayment begins after course completion (moratorium period also available)
- Loan can be secured (collateral-based) or unsecured (without collateral)
- Repayment tenure can be up to 15 years.
Eligibility Criteria for Education Loans for International Studies
Before applying for a student loan in India, it is essential to check the eligibility criteria set by banks which include:
- Citizenship: Applicant must be an Indian citizen.
- Admission Confirmation:Â Proof of admission into a recognized international university.
- Academic Record: Strong academic background increases the chances of loan approval.
- Course Eligibility: Undergraduate, postgraduate, PhD, and diploma courses in engineering, medicine, management, and technology are preferred.
- Age Limit: Usually between 18-35 years.
- Co-applicant Requirement: A co-borrower (parent/guardian/spouse) is mandatory for most loans.
Best Banks for Study Abroad Loans in India
Several banks in India provide education loans for international studies with attractive interest rates and repayment terms. These banks also offer pre-approved loans and customized financial solutions for students pursuing higher education abroad.
| Bank Name | Loan Amount | Interest Rate | Collateral Requirement | Repayment Period |
| State Bank of India (SBI) | Up to ₹1.5 Cr | 9.5%-11% | Required above ₹7.5 Lakh | Up to 15 years |
| HDFC Bank | Up to ₹40 Lakh | 9%-13% | No collateral for up to ₹7.5 Lakh | Up to 15 years |
| ICICI Bank | Up to ₹1 Cr | 10%-12% | Required for higher amounts | Up to 10 years |
| Punjab National Bank (PNB) | Up to ₹1 Cr | 9%-12% | Required above ₹7.5 Lakh | Up to 15 years |
| Bank of Baroda | Up to ₹1.5 Cr | 8%-10% | Required above ₹7.5 Lakh | Up to 15 years |
| Axis Bank | Up to ₹40 Lakh | 11%-13% | No collateral for up to ₹7.5 Lakh | Up to 15 years |
Government Schemes for Study Abroad Loans
The Indian government has also introduced various schemes to help aspiring students finance their international education through subsidized loans and financial assistance. Some of these are as follows:
- A government initiative to provide access to multiple education loan schemes.
- Students can apply to different banks through a single platform.
- Interest rates depend on the bank’s policies.
Dr. Ambedkar Central Sector Scheme
- Beneficial for students from OBC and EWS categories.
- Interest subsidy during the moratorium period.
- Covers higher education in reputed foreign institutions.
National Backward Classes Finance & Development Corporation (NBCFDC)
- Special education loan schemes for backward-class students.
- Provides Low-interest study abroad loans.
Education Loan Interest Subsidy Scheme
- Provides interest-free loans during the study period for students from low-income backgrounds.
These government initiatives make education loans for international studies more accessible and affordable for aspiring and deserving students.
How to Apply for Student Loans in India to Study Abroad?
Applying for a student loan in India involves multiple steps, such as:
Research & Compare Loans
- Compare interest rates, repayment terms, and processing fees of different banks.
- Choose between collateral-based and collateral-free loans.
Check Eligibility & Loan Amount
- Check the bank’s eligibility criteria.
- Look for the loan amount based on your tuition fees and living costs.
Submit Loan Application
- Apply online through the bank’s website or visit the nearest branch.
- Submit all required documents.
Loan Processing & Approval
- The bank evaluates documents and assesses creditworthiness.
- If required, an interview may be conducted.
- Upon approval, the bank pays out the loan amount directly to the university.
Necessary Documents Required for Loan Approval
- Admission letter from the foreign university.
- Academic records and entrance exam scores (IELTS, TOEFL, GRE, GMAT).
- KYC documents (Aadhaar card, PAN card, Passport).
- Proof of income and financial stability of co-applicant.
- Collateral documents (if applicable).
Banks Repayment Options and Interest Rates
Interest Rates on Education loans for International Studies
Banks’ interests rates vary according to the loan amount and collateral requirement. Generally, interest rates range from 8% to 15%.
| Repayment Terms & Moratorium Period | Loan Repayment Methods |
| Most banks offer a moratorium period (course duration + 6 months to 1 year). | EMIs (Equated Monthly Installments) |
| Loan repayment starts after the moratorium period. | Lump sum payments |
| Repayment tenure can go up to 15 years. | Prepayment with reduced interest |
Tips for Getting Your Education Loan for International Studies Approved
- Maintain a strong academic record is important because banks prefer students with good scores.
- Choosing a top-notch university because loans are easily approved for top-ranked institutions.
- Having a financially stable co-applicant which increases the chances of loan approval.
- Ensure all financial proofs and academic certificates are correct.
- Opt for collateral loans if possible because secured loans have lower interest rates and higher approval rates.
Conclusion
Getting a student loan in India for students aspiring to pursue their studies overseas is the best option for those financially not that strong. With numerous choices, including loans from the best banks for study abroad loans in India and government schemes for study abroad loans, students can secure funding to pursue their dreams. Students can successfully finance their overseas education and build a bright future by comparing loan options and understanding repayment terms.
FAQ
How do I get a Student Loan in India to Study Abroad?
Yes, some banks provide 100% financing, but collateral may be required for large loan amounts.
What is the maximum loan amount I can avail of for studying abroad?
The maximum loan amount varies depending on the student’s profile. The exact amount depends on factors such as the course of study, the university’s reputation, and the student’s creditworthiness.
Are there any tax benefits associated with education loans for international education?
Yes, students can claim a deduction on the interest paid on education loans under Section 80E of the Income Tax Act of India.
Can I get an education loan without collateral?
Yes, some banks offer unsecured education loans that do not require collateral. However, these loans may charge higher interest rates and stricter eligibility criteria.
