Loans to Study Abroad

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Loans to Study Abroad

India is ranked third amongst countries whose students are pursuing their education abroad. Every year over 150,000 students pursue various undergraduate, postgraduate courses abroad.  Among various perks; practical learning and global exposure attract many students to overseas education. Studying abroad comes with great concerns related to the cost of studying abroad. Available Scholarships have various limitations which leave Education loans an easier way to study abroad and pursue their degree in their desired university. Let’s check on various conditions and available loans to study abroad.

Why take Education Loan for Abroad

According to the growing trend of studying abroad, there are various countries for pursuing higher education. The cost of studying abroad can go up to 15-25 lakh rupees per year. The cost of studying abroad can depend upon the country, the courses, duration, and living in the country. Banks are offering educational loans to students to pursue their dream. The study abroad market is flayed by 12% every year. Students coping up with the financial burden can rely on banks which can provide them with easy loans to study abroad. Banks offer loans to study abroad based on the needs of the students and their capabilities to afford that loan.

Also Read: How to Pay Off Student Loans?

Crucial Details about Loans to Study Abroad

There are various things that you should keep in mind before applying for loans to study abroad: 

  • The money which has been taken from the banks is supposed to be returned with a marginally increased interest of 10-15%.
  • Education loans to study abroad exceeding 6.6 lakhs requires some documents of determined property for assurance and collateral reasons.
  • For some banks, there is a period of relaxation where students can start paying back the amount after they begin their employment. 
  • The co- applicant’s financial statements are required to be submitted along with the loan application for a better understanding of their financial background.
  • The amount of loan which was applied can vary with the amount of loan received. Check all your details very carefully before applying.
  • The most crucial part of the loan procedure is to check your KYC. It helps the bank having an assurance of faith in the customer.

Must Read – Education Loan without Collateral

Eligibility for Loans to Study Abroad

While applying for student loans, applicants must check whether they are eligible to apply. 

  • Applicants applying for loans to study abroad are required to be Indian citizens, with a minimum of 18 years of age.
  • Co-applicants are required to hold an account in Indian banks.
  • Applicants are required to submit confirmation from the college/university before the sanction or approval of the loan.
  • Co-applicants are required to have a stable financial condition to support the loan.
  • The financial stability of the co-applicants is the most important criteria for the approval of the loans to study abroad.
  • Applying for loans to study abroad, choosing the right university to pursue a suitable course is a long and exhausting procedure. You have to make sure that you make the right decision for your life. We at Leverage Edu help you make better decisions. We provide the best guidance and support and help you reach your goal. 

9 Myths About Student Loans- Don’t Fall for it!

Educational Loans

The following are the banks that provide educational loans for students to study abroad. Students must read through the amount offered, interest rate, repayment tenure, and collateral security to choose which loan suits their needs.

Syndicate Bank Education Loan

Syndicate Bank is known to be one of the oldest and major commercial banks in India. Education is a key area where parents are willing to invest in order to build a prosperous and bright future for their children. Syndicate Bank offers extremely effective education loans at easy interest rates. The main objective of the Syndicate Bank Education Loan is to provide financial aid to Indian students who are willing to pursue higher education either in India or abroad. The bank offers the following two education loans to students:

Types of Education Loans Synd Vidya Educational Loan
Synd Vidya Abroad Educational Loan Synd Super Vidya
Synd Vidya Vocational Courses
Synd Vidya Skill Loan
Maximum Amount Rs 2 crores
Loan Disbursement  15 days
Repayment Upto 15 years + Moratorium 
Margin In case of Loans up to Rs.4 lac – No Margin required.
In case of Loans above Rs.4 lac – 5% for study in India and 15% for study abroad
Official Website https://www.syndicatebank.in/

Vijaya Bank Education Loan

Vijaya Bank in a merger with Bank of Baroda offers a bunch of educational loans seeking which students can study the course of their choice in India as well as abroad.minimum interest along with extra benefits are covered under the schemes of Vijaya Bank Education Loan. The bank also offers free security loans for amounts upto INR 4 Lakh which is easily available for all the Indian national students. 

Name of the Loan  Vijaya Bank Education Loan
Applicable For India and Abroad
Applicable Courses  Professional graduation and post graduation courses*
Eligibility Criteria Students who have secured the admission
Loan Tenure Up to 15 years
Loan Amount Up to 20 Lakhs
Interest Rate Multiple
Processing Fees Nil

Related Read: Evidence of Financial Support

ICICI Education Loan

ICICI Bank, an Indian multinational banking and financial services company under the ICICI Education Loan can lend a student up to ₹50 lakh for education in India and up to 1 crore for studies abroad. ICICI Bank also offers collateral-free loans of up to ₹40 lakh in which the borrower does not have to offer any asset or pledge any collateral to get the loan. However, this loan has to be paid 6 months after the completion of the degree. 

Name of Loan ICICI Education Loan 
Eligibility Criteria Students who have secured admission
Loan Tenure Up to 15 years
Loan Amount Up to 20 Lakhs
Interest Rate 10.50% Secured10.75% Unsecured
Processing Fees Nil

IDBI Education Loan

Previously known as the Industrial Development Bank of India, IDBI Bank is a government-owned financial service bank which is headquartered in Mumbai. It is one of the tenth largest bank of development and has 1,853 branches with 1 international branch in Dubai, 3,350 ATMs and 1,382 centres. 

Maximum Loan Limit Rs. 20 lacs
Processing Fee No Processing Fee
Loan repayment 15 years
Loan collateral  Up to Rs. 4 lacs no collateral
Rs. 4 Lacs to 7.5 Lacs – Third-party guarantee
Above Rs.7.5 Lacs – 100% loan amount tangible collateral 
Interest rate 9 – 12 %

Bank of Baroda Education Loan

Bank of Baroda is a bank owned by the Indian government founded in 1908. Bank of Baroda offers different types of bank loans with different rates of interest. You can also avail of education loan subsidy & tax benefits under Section 80E of the Income Tax Act for interest paid. The repayment period varies depending on the type & amount of loan. Repayment of Loan can range from 10 – 15 years. Bank of Baroda doesn’t require collateral or security for loans up to 4 lakhs under any scheme.

Maximum Loan Limit Rs. 80 Lacs (for medical & aviation courses)
Rs. 10 Lacs (for other courses)
Debit Card charges Free Debit Card
Processing Fee No Processing Fee
Concession 0.25 % for females
Loan repayment 10 – 15 years
Loan collateral  Up to Rs. 4 lacs no collateral
Rs. 4 Lacs to 7.5 Lacs – Third-party guarantee
Above Rs.7.5 Lacs – 100% loan amount tangible collateral 
Interest rate 8 – 10 %

Education Loans for Abroad Studies

Allahabad Bank Education Loan

Allahabad Bank was established in 1865 & was the oldest joint stock bank of India. In the year 2020, Allahabad bank merged with Indian Bank. After the merger, all account holders have to use the Indian Bank IFSC code, Cheque books, internet banking, etc. Allahabad Bank Education Loan will now follow norms & procedures followed by the Indian Bank

Maximum Loan Limit Rs. 20 Lacs
Processing Fee No Processing Fee
Concession 0.50 % for females
Loan repayment 10 – 15 years
Loan collateral  Up to Rs. 4 lacs no collateral
Rs. 4 Lacs to 7.5 Lacs – Third-party guarantee
Above Rs.7.5 Lacs – 100% loan amount tangible collateral 
Interest rate 7 – 11 %

Canara Bank Education Loan

Canara Bank is one of the largest banks in India & owned by the Government of India established in 1906 & has its main headquarters in Bengaluru. Canara Bank Education Loan helps students to pursue higher education in India & abroad with interest rates ranging between 7 -9% & concession for female applicants. 

Maximum Loan Limit Rs. 40 Lacs +
Margin Up to 4 lacs – NilAbove 4 lacs 5%
Security Up to Rs. 4 lacs no collateral
Rs. 4 Lacs to 7.5 Lacs – Third-party guarantee
Above Rs.7.5 Lacs – 100% loan amount tangible collateral 
Processing Fee Nil
Interest Rate 7 – 10 %
Loan Repayment 10 – 15 years

HDFC Education Loan

The Housing Development Finance Corporation Limited (HDFC) offers various education loans to Indian students applying for admissions in Indian and foreign colleges. HDFC Education Loan promises complete transparency to the applicants while sanctioning the loans to eradicate the problem of doubts and security. Being a market leader for over two decades, HDFC has established a valuable customer base and reputable standards. 

Maximum Loan Limit Rs. 20 Lacs +
Margin Up to 4 lacs – Nil
Above 4 lacs 5%
Security Up to 7.5 Lacs – No collateral
Above Rs.7.5 Lacs -Residential Property, HDFC Bank Fixed Deposit
Processing Fee 1%
Interest Rate 9 – 14 %
Loan Repayment 15 years

PNB Education Loan

Punjab National Bank offers different loan options to students for their education in India and abroad. There are different educational loans available for students from Class 12th to Masters degree. 

Bank Punjab National Bank
Loans PNB Udaan
PNB Saraswati
PNB Honhaar
PNB Pratibha
PNB Kaushal
Interest Rate 7.30% to 9.20%
Age Limit No Age Limit
Repayment Period 7 to 15 years
Official Website pnbindia.in

Study Abroad Loans

Apart from various banks, many institutions and non-banking services also provide student loans to study abroad. The following are a few popular loans offered by non-banking financial institutions.

  • Avanse Financial Services: Avanse study loan can be taken by students with a minimum loan amount of Rs 1 Lakh and can be maximized accordingly. Being one of the most reliable student loans, it offers pre-admission loans, pre-visa disbursement loans, fast-track loans, and also covers pre-admission costs such as application fees, tests fees, or consultation fees. 
  • HDFC Credila: HDFC Credila offers student loans for over 35 countries. Applicants can customize their EMI options along with flexible repayments. Credila Education Loan amount begins from a minimum of Rs. 1 Lakh and can extend up to a maximum of Rs 40 Lakhs. 
  • Global Student Loan Corporation (GSLC): The GSLC offers student loans for people who want to pursue higher education in the US. the loan majorly depends on the borrower’s ability and a U.S based co-signer for sharing responsibility. The loan covers 100% fees amount, transportation, accommodation computer/laptop expenses, and miscellaneous educational costs. 
  • International Student Loan Program (ISLP): The ISLP also offers student loans for studying in the US. students can receive a minimum loan of Rs. 10,95,532 which can be repaid during the tenure of up to 25 years. The loan amount mostly covers university tuition fees, health insurance, living, and miscellaneous expenses. 

Study Abroad Scholarships

What is Collateral?

A movable or immovable property that can be offered to the banks as a security to receive a loan is called collateral. A collateral makes sure that if you end up not paying for the student loan, the bank holds rights to seize the property. Most of the Indian banks require collateral for the education loan. 

Which is accepted as Collateral?

There are different types of instruments that are accepted as collateral. They include:

  • Bonds
  • FD
  • Shares
  • Mutual Fund Units
  • Gold
  • Life Insurance Policy
  • Debentures
  • Bank Deposits
  • House
  • Commercial Property
  • Normal Land
  • Agricultural lands are not accepted as collateral

How can I get an education loan to study abroad without collateral?

There are plenty of education loans available without collateral as for some it is difficult to have such securities. Many popular finances of the country offer education loans without collateral. Listed below are the important points you must keep in mind while seeking the same- 

  • You may not pledge to any government bank for collateral if you are availing loan up to INR 4 Lakh 
  • As per RBI, all the banks of the country have provision to grant education loan without collateral up to INR 7.5 Lakh when all the criteria are met.
  • For those seeking a loan more than INR 7.5 lakh, they can opt private or NBFCs as they provide a loan upto INR 50 lakh without collateral.

Loans to Study Abroad- Term and Conditions

  • Educational loans are provided under the tag “Study Abroad” which includes various countries. A loan could be applied even before deciding to go further with the respective country for pursuing higher education. The final loan procedure will be designed according to the need of the student, the course, country.
  • The loan which is sanctioned is provided in Indian Currency INR and is mandatory to be repaid in Indian Currency only. 
  • The loan depends on the factors like the duration of the course, grace period after the loan, the capability of the co-applicants, and future aspects of the study procedure.
  • Some Banks often credit the tuition fee directly to colleges/universities or through a service mediator. The tuition fee is always given in installments considering the requirement of the college. 

Loan Coverage and Benefits

Costs that are covered in the loan are tuition fees, extra expenses like hostel, uniforms, travel expenses, equipment (laptop or computer), books, library expenses. Some banks also provide one-way travel tickets from India to their respective country. Students can apply for education loans to study abroad for various programs like business, management, medicine, engineering courses. The government of India has come up with subsidized interest rates for students coming from marginalized and economically weak class. 

FAQs

Which loan is best for studying abroad?

HDFC Bank and SBI are the leading banks for loans to study abroad.

How much is the maximum loan amount you can get?

The amount varies across banks and the majority of the banks offer maximum loans up to INR 20-30 lakhs. The interest rate increases with the amount.

What costs are covered under an education loan?

This also varies across banks. Usually, an educational loan covers the tuition fee, examination fee and hostel/accommodation fee. Some banks also provide one-way air fares for the students.

What are the documents required to apply for an education loan?

1. Transcripts of all qualifying exams
2. Proof of admission
3.Two passport size photographs
4. Estimated expense including fee and lodging
5. Bank statement for six months of the borrower
6. Income tax assessment order not more than two years old

When should I start repaying the loan?

The student has to repay the loan in EMIs (Equated Monthly Installment) after the course gets over. Banks usually ask the student for the repayment of the loan within 6 months to 1 year after completing the course.

Applying for loans to study abroad and choosing the right university to pursue a suitable course is a critical and strenuous procedure. To make sure that you make the right decision for your life, our expert mentors at Leverage Edu help you make better decisions and provide the best guidance and support and help you reach your goal. Sign up for a free session today!

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