Education Loan for Abroad StudiesEducation Loan for Abroad Studies

Nowadays, many students are aspiring to procure a degree or a certification in a particular field from universities abroad. This may be done to ensure that the knowledge procured from a particular course is of the best quality or the reason may also be that certain courses offered in the universities abroad are not provided by the Indian universities.

The parents of the students would have made a couple of investments which may cover the financial requirements of a course, but a certain amount of shortage can still prevail. Therefore, various public-sector banks and private sector banks are providing loans for students who want to study abroad. The loans are given at rates which are beneficial for the students and also even the duration for repayment of these loans are feasible.

Here is the List of Contents which upon clicking helps you to directly jump to the topics

  • Expenses covered under the Education Loan
  • Eligibility Criteria and Required Documents
  • Interest Rates, Loan Financing, and Collateral Requirement
  • Repayment
  • Top Education Loan Providers in India to study abroad

Expenses covered under the Education Loan

  • The tuition fee, laboratory fee, and library fees will be covered by education loans.

  • The fees paid for the examination, hostel, university, and the institution.

  • Certain purchases such as books, equipment required for the course, uniform if required, and instruments.

  • The amount required for the purchase of a personal computer or a laptop will be covered if required.

  • Certain expenses such as the caution deposit, refundable deposit, or the building fund will be covered only if supported with the receipts/ invoices.

  • Most of the banks will also cover the insurance premium of the borrowing student.

  • Passage and travel expenses of the student.

  • Expenses of case studies, study tours, and project works will also be covered.

  • If the student wants to take up additional coaching classes then the loan won’t cover the expense.

Eligibility Criteria and Required Documents

  • The student applying should be an Indian citizen.

  • The student should have secured admission into the university.

  • The student should have finished higher secondary school or an equivalent course.

  • The RBI hasn’t posed any restrictions on the upper age limit of the students, but, it may vary from one bank to another.

  • The following documents are required for availing of an education loan:

    • Marksheets ( Class 10 and Class 12 or of an equivalent course).

    • The documents and details of the concerned university.

    • Income documents (Salary slips and Income tax returns) of the co-applicant.

Interest Rates, Loan Financing, and Collateral Requirement

Interest Rates

  • The loans are charged with interest from 8%- 11%.

  • The banks mostly calculate the interest on loans from Marginal Cost of Funds based on Lending Rate (MLCR) and also have an additional spread to the interest rate.

  • There will be a concession of 0.50% on the loans given to girl students.

  • An additional 2% can be charged on the interest rate if there is a delay in repayment of the loan.

 Loan Financing

  • The bank may approve of a loan covering 100% of expenses.

  • There is no margin charged for loans below Rs.4 Lacs, but for loans above Rs.7.5 Lacs, a marginal rate of 15% is charged.

  • After the approval of the loan, the respective bank will disburse the amount of money availed directly to the institute/university.

 Collateral Requirement

  • The banks will not ask for collateral for a loan up to Rs.4 Lacs.

  • A third-party guarantee with an assurance of future income will be required for loans from Rs.4 Lacs to Rs.7.5 Lacs.

  • For loans above Rs.7.5 Lacs, a 100% collateral is required and also an assurance of future income should be given. 

Repayment of Educational Loans

  • The repayment period will begin usually after the completion of the course.

  • The common amount of period given for repayment of loans is 5-years to 7-years, however, it can be extended further.

  • Certain banks give a relaxation period of 6 months to secure a job and then make a payment.

  • The loans have to be repaid by the student itself.

  • The loans should be paid under the equated monthly instalment (EMI) scheme, this is done so that the students are not financially burdened.

Top Education Loan Providers in India to study abroad

The following list consists of information regarding the top loan providers, amount of loan given, and the rate of interest:

  • State Bank of India: State Bank of India (SBI) provides up to Rs. 20 Lakhs as a loan for students who wish to study abroad. The interest rate increases to 10.50% for loan amounts above Rs.7.5 Lakhs.
  • Allahabad Bank: Allahabad Bank provides loan up to Rs.50 Lakhs for students planning to study abroad. The interest rate for a loan amount up to Rs.4 Lakhs is 11.45%, for loan amount up to Rs.7.5 Lakhs, the interest rate is 11.45% and for loans above Rs.7.5 Lakhs, the interest rate is 10.95%
  • Axis Bank: Axis Bank provides loan to students who want to study abroad for Rs.20 Lakhs and above depending on the requirements. The interest rate for the loan amount of Rs.4 Lakhs is 15.2%, for loan amount up to Rs.7.5 Lakhs, the rate of interest is 14.7%, and for loan amount above Rs.7.5 Lakhs, the interest rate is 13.7%.
  • HDFC Bank: HDFC Bank provides loan up to 10 Lakhs for students who want to study abroad. Their maximum rate of interest is 15.25%, the minimum rate of interest is 9.50% and the average rate of interest is 12.41%.
  • Credila: Credila has no limits on the loan amount and depends on the requirement of the course taken by the student to study abroad. The provide a floating rate of interest at 12.10% and the rate of interest is dependent on the risk points of the applicant.
  • IDBI Bank: IDBI Bank provides loan for abroad studies to the student depending upon the requirement. The rate of interest for loan amounts up to Rs.10 Lakhs is 10.45% and for loan amounts above Rs.10 Lakhs is 11.45%.
  • Indian Overseas Bank: Indian Overseas Bank provides overseas study loans up to Rs.40 Lakhs for students. The interest rate for a loan amount up to 4 Lakhs is 11.50%, for a loan amount up to 7.5 Lakhs, the interest rate increases to 12.00%, and for loans above Rs. 7.5 Lakhs, the interest rate is 12.25%
  • Avanse Financial Services: Avanse Financial Services have no limits to the amount of education loan that can be provided for students who are willing to study abroad. The loan amount has a floating interest rate of 11.5%+ depending on the risk points of the applicant.
  • Syndicate Bank:  Syndicate Bank has a limit of Rs.20 Lakhs on the loan amount that can be provided to students who want to study abroad. The loan amount has a floating interest rate of 11.5%+ depending on the risk points of the applicant.
  • Canara Bank: Canara Bank provides educational loans of Rs.20 Lakhs and above depending on the requirement of the students to pursue their education abroad. The interest rate for a loan amount up to Rs.4 Lakhs is 11.15%, for a loan amount up to Rs.7.5 Lakhs, the interest rate increases to 11.65%, and for a loan amount above Rs.7.5 Lakhs, the interest rate is 11.15%.


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Gurpreet Singh

I want study loan for cyprus

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