Education Loans for Abroad Studies: Eligibility, Procedure, Benefits, Tips to Achieve & More

Prity Mallick

9 min read

Updated On Jun 10, 2025

Looking for education loans for abroad studies? Discover how to finance your international education with student loans for study abroad from top banks & learn about eligibility, documents, interest rates, & application procedures in this detailed guide.

Eligibility for Education Loan in India
Documents Required for Education Loan for Overseas Studies
Top Education Loans Providers in India for Studying Abroad
Collateral and Non-Collateral Education Loan for Abroad
Procedure to Apply for Education Loans For Abroad Studies
Things to Remember While Taking an Education Loan for Abroad Studies
Benefits of Education Loans for Abroad Studies
Tips to Secure the Best Education Loans For Abroad Studies

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With the increasing popularity of internationally recognized degrees, many students apply for education loans for abroad studies. Since the study loan for abroad covers the significant costs associated with pursuing higher education overseas, which include tuition fees, accommodation, travel, and living expenses, it serves as a bridge to their dreams, enabling them to pursue world-class education without financial constraints.

In this blog, we will cover every aspect of securing a student loan for study abroad, including loan eligibility, top providers, interest rates, collateral rules, application procedures, and more. By understanding the process, eligibility criteria, and documentation required, you can navigate the complexities of education loans with confidence and focus on achieving your academic and career goals.

Eligibility for Education Loan in India

It is essential to first check whether you meet the education loan eligibility standards before applying. The general education loan requirements followed by most banks in India are outlined in the table below.

Factor	Details
Citizenship	The applicant must be an Indian citizen.
Age Limit	Between 16 and 35 years (varies slightly by lender) If the student is below 18 years of age, a parent or legal guardian must make the loan application on the student’s behalf.
Academic Background	A consistent academic record, particularly in the last qualifying degree
University Admission	Applicants must have secured admission into a recognized and reputable university, college, or institution abroad.
Course Type	Banks typically prioritize job-oriented, technical, or professional courses. Hence, the chosen program should meet this education loan requirement to enhance the chances of approval.
Co-applicant	Mandatory in most cases It can be parents, spouse, or guardian
Creditworthiness	Co-applicant must have a good credit/CIBIL score (preferably 700+)

Some lenders may have additional requirements depending on the country, institution ranking, and type of course. However, keep in mind that each bank may have its specific education loan criteria, which applicants must fulfill when submitting their application.

Documents Required for Education Loan for Overseas Studies

Besides knowing the eligibility for education loan for abroad studies, it is important to gather all the necessary documents before proceeding with your application for the loan. These documents are required to establish your eligibility, verify financial support, and ensure a smooth loan approval process.

In the detailed table, you will find the outline of the essential documents required for education loans to study abroad, typically required by most banks in India.

Type of Documents	For Applicant	For Co-Applicant
Loan Application Form	Duly filled and signed education loan application form.	Not applicable
Photographs	Recent passport-size photograph.	Recent passport-size photograph.
Photo Identification	Valid photo ID, such as PAN Card Aadhar Card Passport Voter ID Driving License	Valid photo ID, such as PAN Card Aadhar Card Passport Voter ID Driving License
Residential Proof	If Owned: Aadhar Card Passport Electricity Bill Municipal Tax Receipt Share Certificate Title Deed (with Flat No.) If Rented: Aadhaar Card Registered Rent Agreement (with utility bill) Landline Phone Bill Postpaid Mobile Bill	If Owned: Aadhar Card Passport Electricity Bill Municipal Tax Receipt Share Certificate Title Deed (with Flat No.) If Rented: Aadhaar Card Registered Rent Agreement (with utility bill) Landline Phone Bill Postpaid Mobile Bill
Academic Records	10th & 12th scorecards with certificates UG/PG scorecards and certificates (if available) Standardized test scores like GRE, GMAT, IELTS exam, TOEFL, etc.	Not applicable
Admission Letter	Offer letter or admission confirmation from the foreign university or institution.	Not applicable
Bank Statements	Not applicable	Last 6 months’ personal bank account statements.
Income Proof	Not applicable	If salaried: Salary Slips (last 3–6 months) Form 16 or ITR (last 2 years) Bank Statements (last 6 months) Employment Letter or Experience Certificate If self-employed: ITRs (last 2–3 years) Business Registration Certificate Profit & Loss Statement and Balance Sheet (audited) Bank Statements (business & personal, last 6–12 months)
Collateral Documents (if applicable)	Property Title Deed NOC from builder/society (if the loan is secured with collateral). Latest Property Tax Receipts Encumbrance Certificate (EC) Approved Building Plan (if constructed) Valuation Report from bank-approved valuer	Ownership proof of the property, if the co-applicant owns the collateral.

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Top Education Loans Providers in India for Studying Abroad

Choosing the right lender is critical to ensure you receive the required funding with favorable terms. While several banks, Non-Banking Financial Companies (NBFC) and government bodies offer student loan for study abroad, some of the best banks for education loan for abroad studies are HDFC, ICICI, SBI, Axis Bank and Punjab National Bank.

In the table below, you will find a breakdown of leading public and private sector banks, NBFCs, and government education loan for abroad.

Lender/Bank	Max Loan Amount (in INR)	Collateral-Free Limit (in INR)	Highlights
SBI – Global Ed-Vantage	1.5-3 crore	50 lakh (for top universities)	Lower interest rates, 15-yr tenure, pre-visa disbursement
ICICI Bank	1 crore+	1 crore	Fully digital application, fast processing
Axis Bank	75 lakh	40 lakh	Floating rate linked to repo, no prepayment penalty
HDFC Credila	20–60 lakh	35 lakh (select cases)	Customized loans, co-borrower in India mandatory
Bank of Baroda	80 lakh	40 lakh	Attractive government schemes and subsidies
NBFCs (Avanse, InCred)	10 lakh-75 lakh	75 lakh	No collateral, faster approvals, less paperwork

Education Loan Interest Rates for Abroad Studies

Study abroad education loan interest rates are not uniform across all banks and financial institutions. They can vary based on several key factors, including the applicant’s academic record, the total loan amount requested, and the credit score (CIBIL) of the co-applicant. Typically, the rate of interest (ROI) on student loans falls within the range of 8.80% to 14.00%.

Public sector banks often provide education loans at comparatively lower interest rates than private banks. Therefore, it is crucial for students and their families to thoroughly compare the loan offerings from different lenders. Evaluating the total repayment cost, including interest, can help in making an informed financial decision.

Collateral and Non-Collateral Education Loan for Abroad

Education loans for abroad studies have significantly eased the financial burden for students aspiring to pursue higher education. Loans are classified into secured (with collateral) and unsecured (without collateral). Let us delve deeper into both of these loan types to help you understand which is the right option for you.

Collateral Rules for Education Loans for Abroad Studies

Any type of liquid assets, like residential/commercial property, fixed deposits, insurance policies with surrender value, gold, mutual fund units, government securities, and agricultural land (some banks) are considered as collateral instruments. Depending on the loan amount, the requirements for collateral or guarantors vary. Below is a detailed table explaining these conditions:

Loan Amount	Collateral Requirement	Additional Notes
Up to ₹4 lakhs	No collateral required	Loan is granted based on the academic profile and eligibility of the student.
Above ₹4 lakhs and up to ₹7.5 lakhs	No physical collateral, but a third-party guarantee is required. Parents/guardians must co-sign the loan.	The guarantor must have a stable financial background.
Above ₹7.5 lakhs	Collateral is mandatory. It can include immovable property or other valuable assets.	A bank official will inspect and evaluate the property to determine if it can be accepted as security.

If you plan to secure your loan with immovable property (like a house or land), the process will involve the following steps:

Property Verification: A bank representative will inspect the property to confirm its ownership and legal status.
Valuation Report: The bank will prepare a valuation report to assess the property's worth.
Loan Sanction: Based on the report, the bank will determine the maximum eligible loan amount.

Non-Collateral Rules for Education Loans for Abroad Studies

Non-collateral loans, also known as unsecured education loans, are loans that do not require the borrower to pledge any property or assets as security. Instead, the approval is based largely on the applicant’s and co-applicant’s financial credibility.

With increasing demand, many lenders now offer foreign education loans without collateral, especially for students with strong academic backgrounds or admission into premier institutions. In the table below, you will find a list of top abroad education loans without collateral.

Lender	Max Loan Limit (in INR)	Key Benefits
Leap Finance	Up to 75 lakh	Fast disbursal, no collateral, low margin
Lorien Finance	Up to 50 lakh	AI-based risk assessment, tailored for abroad study
Prodigy Finance	Up to 75 lakh	For postgraduate courses, no Indian co-signer needed
MPower Financing	Up to 60 lakh	For U.S. universities, no co-signer or collateral

It is important to note that non-collateral loans often have slightly higher interest rates but make education accessible to students without tangible family assets.

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Procedure to Apply for Education Loans For Abroad Studies

Applying for an education loan can be a lengthy procedure, from submitting your application to receiving the funds. To avoid delays, it is best to start the process well in advance. Here is a step-by-step guide to help you navigate the loan application process:

Verify Course Eligibility: You should ensure that the academic program you plan to pursue is approved by banks for education loan financing.
Estimate Financial Requirements: Before deciding on the final education loan for abroad, determine the total cost of education and decide how much funding you will need through the loan, considering how much you can contribute personally.
Compare Loan Offers: You should research and compare education loan options from multiple banks to find one that aligns best with your financial needs and repayment capacity.
Submit the Application: Once you select the bank and finalize the loan amount, complete the application form and submit it to the respective bank.
Loan Sanction and Documentation: Upon approval, the bank will issue a sanction letter outlining the loan terms, interest rate, repayment schedule, and other key conditions.
Disbursement of Funds: Finally, after signing the agreement, the loan amount will be released, either in full or in instalments, based on the university's fee schedule or your preference.

Things to Remember While Taking an Education Loan for Abroad Studies

While education loans for abroad studies offer a respite from the uncertain financial status, there are certain important points to keep in mind when taking out a study loan for abroad. The table below summarizes all the required points that you should consider.

Factor	What You Should Know
Moratorium Period	Most banks provide a grace period of 6 to 12 months after the course ends before EMI repayment begins.
Prepayment Charges	Check if the lender imposes any penalties for early loan closure or partial prepayment.
Processing Time	Public and private banks may take 10–20 working days NBFCs generally process loans faster, within 5–10 days.
Loan Margin	Some banks require the borrower to cover 5-15% of the total education cost Have your share of funds ready.
Insurance Coverage	Certain loans come bundled with life or loan protection insurance Review the additional cost and benefits

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Benefits of Education Loans for Abroad Studies

If you have decided or are planning to take an education loan for abroad studies, you must be doing that for a reason. So, we have listed all the benefits of education loan below to solidify your decision if you find a suitable study loan for abroad.

Greater Opportunities: Education loans make it possible for talented students to pursue studies at renowned international universities that may otherwise be financially out of reach.
Flexible Repayment Terms: These loans typically offer extended repayment periods, often going up to 15 years, making EMIs more manageable.
Tax Benefits: The interest paid on education loans qualifies for tax deductions under Section 80E of the Income Tax Act, reducing your overall financial burden.
Repayment Grace Period: Most lenders provide a moratorium period, allowing students time to complete their studies and secure employment before starting repayment.
Improves Credit Profile: Timely repayment of your loan contributes positively to your credit score, which can benefit future financial transactions.
Comprehensive Coverage: Apart from tuition fees, many education loans also cover related expenses, such as travel, accommodation, laptops, and other living costs abroad.

Tips to Secure the Best Education Loans For Abroad Studies

Finally, we know tips and techniques are always useful when it comes to decision-making, whether it is about choosing the right education loan for overseas studies or which provider offers the best student loan for study abroad. Therefore, given below are some tips to secure the best education loans for abroad studies.

To sum up, securing an education loan for abroad studies is a strategic move. You need to review all options carefully, check current interest and subsidy schemes, and finally, prepare documents diligently. Remember that the right lender, whether a nationalized bank, private bank, or fintech, can significantly impact your affordability and journey abroad.

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Frequently Asked Questions

What are the courses eligible for education loan for abroad studies?

Most banks cover undergraduate courses (BA, BSc, BEng, BBA), postgraduate programs (MBA, MS, MA), doctoral studies (PhD, DPhil), professional programs (medicine, law, architecture). However, non-degree or diploma/certificate courses are usually not covered, unless offered by recognized institutions.

Can I get a 100% loan to study abroad?

Yes, many lenders offer up to 100% financing for education loans for abroad studies, covering tuition, living expenses, travel, insurance, and other study-related costs. Banks like SBI, Bank of Baroda, and ICICI usually offer 100% loans with collateral, while NBFCs like Leap Finance and Prodigy Finance can provide full loans without collateral. However, whether you get a full 100% loan depends on the institution, your profile, and whether collateral is offered.

Can I get a 25 lakhs education loan without property?

Yes, you can get a ₹25 lakh loan without pledging property as collateral. Most NBFCs and some private banks offer non-collateral loans up to ₹40–₹75 lakhs depending on your academic credentials, country of study, and university ranking.

When to repay an education loan?

Repayment usually starts after the moratorium period, which includes the course duration plus 6–12 months (sometimes 1 year) post-completion. During this time, most lenders allow deferred EMI payment, although some may require interest servicing during the study period. Once repayment starts, the tenure typically ranges from 7 to 15 years, giving students ample time to earn and repay. You can also make prepayments to reduce interest outgo, usually without penalty.

How much money is required to study abroad?

The cost of studying abroad varies by country, course, and lifestyle. On average, students spend between INR 20 lakh and INR 80 lakh for a full program abroad. For instance, pursuing an MS in the US may cost INR 40 - INR 60 lakh, while MBA programs in the UK or Canada can exceed INR 70 lakh. It includes tuition fees, accommodation, travel, health insurance, and daily expenses. Many students rely on education loans to manage these expenses efficiently.