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Pursuing higher education opens doors to countless opportunities, but the rising costs of tuition, accommodation, and other expenses can be daunting. Fortunately, financial institutions like Union Bank of India offer tailored solutions to ease this burden. The Union Bank education loan provides flexible funding options to help you achieve your academic goals without financial stress.
This guide explores what is a Union bank education loan, its key features, eligibility criteria, application process, and benefits, empowering you to make informed decisions about financing your education. Let’s get started!
This Blog Includes:
- What Is the Union Bank Education Loan to Study Abroad?
- Key Features of Union Bank Education Loan
- Eligibility Criteria for the Union Bank Education Loan
- How to Apply for the Union Bank Education Loan
- Documents Required for Union Bank of India Education Loan
- Interest Rates and Repayment Options
- Key Benefits of Union Bank Education Loan
- Government Subsidies with Union Bank Education Loan
- FAQs on Union Bank Education Loan
What Is the Union Bank Education Loan to Study Abroad?
The Union Bank education loans to study abroad is a financial product designed to support students pursuing higher education. It covers a wide range of expenses, from tuition fees to living costs, ensuring you can focus on your studies.
Union banks provide up to INR 40 lakh without collateral, and secured loans can go up to INR 1.5 crore or more, based on need.
With competitive interest rates ranging from 9.25% to 9.75% per annum and flexible repayment tenures, these loans are a popular choice for individuals seeking affordable financing options.
Union Bank of India’s Credit Guarantee Fund Scheme for Education Loans (CGFSEL) does cover study abroad programs. The scheme provides financial assistance for higher education in India and abroad, including tuition fees, accommodation, and other related expenses.
The CGFSEL is a Credit Guarantee Fund Scheme for Education Loans, a government initiative whose primary objective is to facilitate access to education loans for individuals from economically weaker sections who want education loans without collateral or a third-party guarantor.
Below is an overview of various Union Bank of India education loans to study abroad.
UNION EDUCATION LOAN (Under CGFSEL Coverage)
| Attribute | Up to INR 7.50 Lakh |
| Base Rate | EBLR |
| Male Student Premium | 2.00% |
| Female Student Premium | 2.00% |
| Male Student Effective Rate | 11.25% |
| Female Student Effective Rate | 11.25% |
UNION EDUCATION LOAN (Outside CGFSEL Coverage)
| Attribute | Up to INR 4.00 Lakh | INR 4.00 – INR 7.50 Lakh | Above INR 7.50 Lakh |
| Base Rate | EBLR | EBLR | EBLR |
| Male Student Premium | 3.25% | 3.00% | 2.10% |
| Female Student Premium | 2.75% | 2.50% | 1.60% |
| Male Student Effective Rate | 12.50% | 12.25% | 11.35% |
| Female Student Effective Rate | 12.00% | 11.75% | 10.85% |
Also Read: Education Loan Interest Rate Trends 2025: Will Studying Abroad Get Cheaper or Costlier?
Key Features of Union Bank Education Loan
The Union Bank of India education loan to study abroad stands out for its comprehensive coverage and borrower-friendly terms. Here are the main highlights:
- Loan Amount: Up to INR 40 lakh without collateral for premier institutes; secured loans can go up to INR 1.5 crore or more, based on need.
- Expenses Covered: Expenses covered in education loans of Union Bank are tuition fees payable to school/ college/ university, hostel charges, books, equipment, travel expenses, Insurance premium and even laptops or computers.
Additional expenses are necessary for completing the course, such as project work, study tours, thesis submission, and similar academic requirements. - Moratorium Period: The moratorium period for Union Bank education loans includes the course duration plus an additional 12 months, during which no EMI payments are required.
- Interest Concessions: 0.5% concession for female borrowers and additional benefits for specific institutes.
- Tax Benefits: Interest paid qualifies for deductions under Section 80E of the Income Tax Act.
Eligibility Criteria for the Union Bank Education Loan
To qualify for the Union Bank education loan to study abroad, applicants must meet specific academic and nationality standards. The bank evaluates both the student’s profile and the co-applicant’s financial background. Key eligibility points include:
- Nationality: Must be an Indian citizen. NRI students with an Indian passport are eligible for studies in India only.
- Academic Requirements: Secured admission to a recognised institution through entrance exams (e.g., IELTS, TOEFL, GRE) or merit-based selection.
- Course Eligibility: Covers graduation, post-graduation, professional, technical, and management courses from reputed foreign universities.
- Co-Applicant: A parent, guardian, or spouse with a stable income and a CIBIL score of 650 or above is typically required.
How to Apply for the Union Bank Education Loan
For a Union Bank education loan to study abroad, you can apply online or offline, depending on your preference. The bank’s digital platforms, such as the Vyom mobile app or official website, simplify the process. Alternatively, visiting a branch offers personalised guidance. Follow these steps:
- Online Application:
- Visit the Union Bank of India website or Vyom app.
- Navigate to the “Loans” section and select “Education Loan.”
- Fill in the required details, upload documents, and submit.
- A bank representative will contact you for further steps.
- Offline Application:
- Visit the nearest Union Bank branch or Union Loan Point (ULP).
- Request an education loan application form.
- Submit the form along with necessary documents.
- Vidya Lakshmi Portal:
- Apply through the government’s Vidyalakshmi portal for a centralized application process.
- Track your application status online.
Documents Required for Union Bank of India Education Loan
Submitting complete and authentic documents is critical for loan approval. The Union Bank education loan requires documents in two stages: pre-sanction and pre-disbursement. Here’s a checklist:
- KYC Documents: Passport, PAN card, Aadhaar card, or voter ID for both the student and co-applicant.
- Academic Documents: Mark sheets, admission letter, and entrance exam results.
- Financial Documents: Co-applicant’s income proof (salary slips, ITRs, Form 16), bank statements.
- Collateral Documents (if applicable): Property papers, valuation certificate, or fixed deposit details.
- Others: Passport-size photographs, proof of residence, and course fee structure.
Interest Rates and Repayment Options
The affordability of the Union Bank education loan lies in its competitive interest rates and flexible repayment terms. Understanding these aspects helps you plan your finances effectively.
Interest Rate Structure for Union Bank of India Education Loan
Interest rates for the Union Bank education loan vary based on the loan amount, institute category, and collateral. Rates are linked to the External Benchmark Lending Rate (EBLR) and reset every three months. The key rates include:
| Loan Amount | Interest Rate Structure | Effective Interest Rate |
| Up to INR 40 Lakh | EBLR + 0.50% (No Collateral) | 9.75% |
| Up to INR 150.00 Lakh | EBLR + 0.25% (50% to <100% Collateral) | 9.50% |
| 100%+ Collateral | EBLR | 9.25% |
- Unsecured Loans (up to INR 40 lakh): Starting at 9.25%, with a 0.5% concession for female students.
- Secured Loans (above INR 40 lakh): 9.25%–9.75%, depending on collateral value.
- 9.50%: For collateral covering 50% to <100% of the loan (e.g., Rs. 50–99.99 lakh for a Rs. 100 lakh loan).
- 9.25%: For collateral covering 100% or more (e.g., Rs. 100 lakh or higher for a Rs. 100 lakh loan).
- EBLR + 0.25%: Interest rate is the External Benchmark Lending Rate (EBLR, ~9.00%) plus 0.25%, resulting in 9.25% for fully secured loans.
Repayment Terms for Union Bank of India Education Loan
The repayment structure is designed to ease the financial burden for students going abroad for higher studies. Key points include:
- Moratorium Period: No EMI payments during the course and 12 months after completion. Interest accrues but can be serviced optionally.
- Repayment Tenure: Up to 15 years, allowing manageable EMIs.
- Prepayment: No penalty for prepaying from personal funds; a 2% charge applies if another bank takes over the loan.
- EMI Calculation: Use the Union Bank EMI calculator to estimate monthly payments based on loan amount, interest rate, and tenure.
For example, a INR 10 lakh loan at 8.30% interest with a 15-year tenure results in an EMI of approximately INR 9,700.
| Loan Amount | Interest Rate | Tenure | Approx. EMI |
| INR 10 lakh | 8.30% | 15 years | INR 9,700 |
| INR 40 lakh | 9.25% | 15 years | INR 41,500 |
Key Benefits of Union Bank Education Loan
The Union Bank education loan offers unique advantages, including collateral-free loans, comprehensive coverage, digital application, and no processing fees. Let’s understand them one by one:
- Collateral-Free Loans: Up to INR 40 lakh for premier institutes, reducing the need for assets.
- Comprehensive Coverage: Funds tuition, living expenses, and even ancillary costs like study tours or laptops.
- Digital Application: Seamless process via the Vyom app or website.
- No Processing Fees: For specific schemes, like the Special Union Education Loan, no upfront fees apply (a INR 5,000 refundable deposit may be required).
Also Read: Maximum Education Loan for Abroad Studies in 2025: Top Lenders and Courses
Government Subsidies with Union Bank Education Loan
Union Bank participates in central government schemes to make education loans more accessible. Lets check some well known government subsidies with Union Bank education loan:
- Central Sector Interest Subsidy (CSIS): Full interest subsidy during the moratorium period for students from economically weaker sections (family income up to INR 4.5 lakh).
- Credit Guarantee Fund Scheme for Education Loans (CGFSEL): Guarantees loans up to INR 7.5 lakh without collateral, reducing risk for borrowers.
- PM-Vidyalaxmi Scheme: Supports interest subvention and loan access through the Vidya Lakshmi Portal.
To avail subsidies, submit income proof from a competent state authority and apply via the designated portal.
The Union Bank education loan combines affordability, flexibility, and accessibility, making it an ideal choice for funding higher education. Whether you’re studying at a premier institute in India or a reputed university abroad, the loan’s competitive interest rates, collateral-free options, and government subsidies ensure financial support tailored to your needs.
FAQs on Union Bank Education Loan
The Union Bank education loan is a financial support offered by Union Bank of India to support students pursuing higher education in India or abroad, covering expenses like tuition, accommodation, and study materials. The loan amount ranges from INR 7.5 lakh to INR 1.5 crore, with interest rates starting at approximately 8.10% to 9.25%, varying based on the scheme, institute, and collateral.
For a Union Bank education loan you should be Indian citizens (including NRIs with Indian passports for studies in India) who have secured admission to recognized institutions through merit or entrance exams are eligible. A co-applicant with a stable income and a CIBIL score of 650+ is required.
The Union Bank education loan covers tuition fees, hostel charges, books, equipment, travel, insurance premiums, laptops, and additional costs like project work or study tours.
The maximum loan amount offered by the Union Bank on education loan is up to INR 40 lakh without collateral for premier institutes; secured loans can go up to INR 1.5 crore or more, depending on the course and institute.
Interest rates for Union Bank of India education loans to study abroad vary by scheme and collateral. Interest rates loans start at 9.25% to 9.75%. Female students get a 0.5% concession.
The repayment tenure of Union Bank education loans is up to 15 years, with a moratorium period covering the course duration plus 12 months, during which no EMI payments are required.
To apply for a Union Bank education loan, you can choose between online and offline methods. For the online process, visit the Union Bank of India website, Vyom mobile app, or Vidya Lakshmi Portal to submit your application. For the offline process, visit a Union Bank branch or Union Loan Point (ULP) to complete the application with the required documents.
For the Union Bank education loan application the required documents include KYC (Aadhaar, PAN, etc.), academic records (mark sheets, admission letter), co-applicant’s financial proof (ITR, salary slips), and collateral documents if applicable.
Yes, subsidies like the Central Sector Interest Subsidy (CSIS) for economically weaker sections, Credit Guarantee Fund Scheme for Education Loans (CGFSEL), and PM-Vidyalaxmi Scheme are available for Union Bank education loans.
Yes, loans up to INR 40 lakh are collateral-free for students with Union Bank. It is admitted to top 160 global universities.
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