How to Get an Education Loan for Studying Abroad: Complete Step-by-Step Guide (India)

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 Studying abroad is a dream for many Indian students, but the high cost of tuition fees, living expenses, and travel often becomes a major challenge. An education loan for studying abroad helps students finance their international education without financial burden on their families.

This article explains how to get an education loan for studying abroad, eligibility, required documents, loan amount, interest rates, and tips for easy approval.

What Is an Education Loan for Studying Abroad?

An education loan for abroad studies is a financial assistance provided by banks and NBFCs to cover expenses such as:

  • Tuition fees

  • Hostel or accommodation

  • Travel expenses

  • Books, equipment, and insurance

  • Living expenses abroad

Loans are available for popular destinations like USA, UK, Canada, Australia, Germany, and Europe.

Who Is Eligible for an Education Loan Abroad?

Student Eligibility

  • Indian citizen

  • Secured admission in a recognized foreign university

  • Age usually between 18 to 35 years

  • Good academic record

Course Eligibility

  • Undergraduate (UG)

  • Postgraduate (PG)

  • MS, MBA, MBBS, Engineering

  • Diploma or professional courses

How to Get an Education Loan for Studying Abroad Complete Step-by-Step Guide (India)


Step-by-Step Process to Get an Education Loan for Abroad Studies

Step 1: Secure Admission First

Banks require:

  • Offer letter / Admission letter

  • Course details and duration

  • University recognition proof

📌 Loans are approved only after confirmed admission.

Also Read: How Much Education Loan Can You Get to Study MBBS in India? (Complete Guide)

Step 2: Choose the Right Lender

You can apply through:

  • Public sector banks (SBI, Bank of Baroda, PNB)

  • Private banks (HDFC, ICICI, Axis)

  • NBFCs (HDFC Credila, Avanse, Auxilo)

Compare:

  • Interest rates

  • Processing fees

  • Collateral requirement

  • Moratorium period

Step 3: Check Loan Amount & Collateral Rules

Loan AmountCollateral Requirement
Up to ₹7.5 lakhNo collateral
₹7.5 – ₹40 lakhProperty / FD / Insurance
₹40 lakh & aboveTangible collateral mandatory

Step 4: Arrange a Co-Applicant

A co-applicant is mandatory:

  • Parent

  • Guardian

  • Spouse (in some cases)

Their income and credit score affect loan approval.

Step 5: Submit Required Documents

Student Documents

  • Aadhaar, PAN, Passport

  • Admission letter

  • Academic records

  • Statement of expenses

Co-Applicant Documents

  • Income proof

  • Bank statements (6 months)

  • ITR (last 2–3 years)

  • Property documents (if collateral)

Step 6: Loan Approval & Disbursement

  • Bank verifies documents

  • Loan sanction letter issued

  • Amount disbursed directly to:

    • University, or

    • Student’s account (as per policy)

Interest Rates for Abroad Education Loans

  • Public banks: 8% – 11%

  • Private banks/NBFCs: 10% – 14%

  • Lower rates for female students

📌 Interest rates may vary based on:

  • Country

  • Course

  • University ranking

  • Credit profile

Repayment & Moratorium Period

  • Moratorium: Course duration + 6–12 months

  • Repayment period: 10–15 years

  • Prepayment allowed (mostly without penalty)

Expenses Covered Under Abroad Education Loan

  • Tuition fees

  • Living expenses

  • Airfare

  • Visa & insurance

  • Laptop & study materials

Common Reasons for Loan Rejection

❌ Poor academic record
❌ Low-ranked or unrecognized university
❌ Weak co-applicant income
❌ Incomplete documents

Tips to Get Education Loan Approved Easily

✔️ Choose recognized universities
✔️ Maintain good academic scores
✔️ Apply early (3–4 months before travel)
✔️ Keep documents ready
✔️ Compare lenders before applying

Frequently Asked Questions (FAQs)

Can I get 100% education loan for abroad studies?

Yes, many banks offer up to 100% coverage including living expenses.

Is collateral mandatory?

Only for higher loan amounts above ₹7.5 lakh.

Can I repay loan while studying?

Yes, interest-only payments are allowed during moratorium.

Conclusion

Getting an education loan for studying abroad is a structured and achievable process if planned early. By choosing the right lender, arranging proper documents, and selecting a recognized university, students can easily fund their international education and focus on building a successful global career.

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