Studying abroad is a dream many Indian students hold close. A degree from a top university can open global doors. But in 2025, fees and living costs have risen. As a result, financing this dream likely needs an education loan.
You May Also Like
This guide explains everything about education loan for abroad studies. You will learn about loan types, interest rates, eligibility, application steps, required documents, repayment terms, common challenges, and government schemes.
Whether you call it student loan for abroad, education loan for abroad or overseas education loan, the purpose is the same making your global education a reality.
Why Take an Education Loan for Studying Abroad?
Going abroad without financial backup creates stress. Many students start but have to pause due to funds. These risks make an education loan important.
- Pay Tuition on Time: Fees can reach $50,000+ per year. An education loan for abroad studies ensures deadlines are met.
- Bridge the Currency Gap: Rupee value may fall when fees are foreign currency. A loan locks in the amount upfront.
- Ease Budgeting: Loan funds cover tuition, living cost, test fees, health insurance—avoiding sudden bill stress.
- Stay Focused: Without money worries you can focus on studies, research, internships and networking.
- Build Credit History: Paying EMIs on time builds credit score—helpful ever after.
- Leverage Government Subsidies: Priority sector loans may have incentives. Schemes like Central Scheme are available for student loans for studying abroad.
- No Proof of Fund Required: When you take an education loan, you don’t have to show proof of funds while getting your visa.
Takeaway: A loan is not a burden—it is a planning tool. It supports your global journey and makes it manageable.
Types of Education Loans Available in India
Indian banks and NBFCs offer several loan types, based on need and cost.
1. Government-Backed Priority Sector Loans
- Offered by SBI’s GlobalEd-Vantage and other lenders.
- Interest rate: usually 9–12%.
- Coverage: up to ₹1 crore.
- Collateral: usually required for higher amounts.
- Benefits: Flat interest rate, moratorium during study.
2. Secured Loans with Collateral
- Require collateral (property or FD).
- Interest rate: 11–13%.
- Coverage: up to 100% of cost.
- Available from: SBI, Punjab National Bank, Canara Bank.
3. Unsecured Loans (No Collateral)
- Popular among middle-class families.
- Interest rate: 13–16% APR.
- Limit: ₹7–10 lakh.
- Ideal for student loan for abroad under ₹10 lakh.
4. NBFC Education Loans
- Providers include Avanse, Auxilo, and InCred.
- Interest rate: 12–15%.
- Loan limit: ₹10–50 lakh.
- Offer features like flexible payment, speedy processing.
5. Top-Up Loans
- For current students needing extra funds.
- Interest rate: similar to initial loan, usually 12–14%.
- Used for airfare, laptop, or living cost.
Top Banks & NBFCs Offering Education Loans in 2025
The list below contains some of the accredited Indian banks and financial institutions. They offer education loan to study in foreign countries in the year 2025. These lenders are flexible, transparent and reliable.
| Bank/NBFC | Max Loan Amount | Collateral Needed | Processing Time | Moratorium Period | Popular Schemes |
| SBI (Global Ed-Vantage) | ₹1.5 crore | Yes (above ₹7.5 lakh) | 15–30 days | Full course + 6–12 months | Global Ed-Vantage Loan Scheme |
| HDFC Credila | ₹75 lakh+ | Usually Yes | 7–10 days | Full course + 6 months | Customised Study Abroad Loan |
| Axis Bank | ₹50 lakh+ | Optional (for up to ₹40 lakh) | 10–15 days | Full course + 12 months | Axis Education Loan |
| ICICI Bank | ₹50 lakh | No (below ₹20 lakh) | 7–14 days | Course + 6 months | ICICI Education Loan for Overseas |
| Punjab National Bank | ₹1 crore | Yes | 15–20 days | Course + 12 months | PNB Udaan Scheme |
| Avanse Financial | ₹40–60 lakh | No | 5–10 days | Course + 12 months | Education Loans for Overseas Studies |
| InCred | ₹60 lakh | No | 5–7 days | Flexible | Customized Loans for Abroad Studies |
These banks often promote customized repayment and cover tuition, travel, books, and living costs.
Interest Rates in 2025 – What to Expect?
Interest rates have a big impact on total repayment. In 2025 average education loan rates range from 9.5% to 14.5% depending on the loan type, collateral, academic profile and lender.
| Loan Type | Collateral | Avg. Interest Rate (2025) |
| Govt. Banks (with collateral) | Yes | 9.5% – 11.0% |
| Pvt. Banks (with collateral) | Yes | 11.0% – 12.5% |
| NBFCs (without collateral) | No | 12.0% – 14.5% |
| Top scorers (high academic record) | Optional | Preferential 9% – 10% |
Note: Some students also get interest subsidies under schemes like Padho Pardesh (for minorities) or the Central Interest Subsidy Scheme
Education Loan Eligibility Criteria
To get a student education loan for study abroad you need to meet basic eligibility guidelines. These may vary slightly by bank but generally include:
Basic Requirements
- Nationality: Indian citizen
- Admission: Secured seat in a recognized foreign university
- Academic Record: Good scores in 10th, 12th and graduation
- Course Type: Full-time, professional or technical
- Co-Applicant: Required (parent/guardian/spouse) with income proof
- Age Limit: 18–35 years (may vary by bank)
Collateral Requirements
- Not mandatory for loans under ₹7.5 lakh
- Over ₹7.5 lakh may require fixed deposit, property, or LIC policy
- NBFCs may waive collateral with higher interest or insurance requirement
Credit Score
- Co-applicant’s credit score should be strong (>700)
- Higher credit score = better loan terms
Step-by-Step Process to Apply for an Education Loan
The application process for a study loan for abroad involves a few essential steps. The earlier you start the better your chances of approval and visa clearance
Loan Application Timeline:
1. Research & Compare: Shortlist banks/NBFCs compare rates and features
2. Pre-Approval (Optional): Get eligibility checked online or in-branch
3. Offer Letter: Apply to universities and get admission proof
4. Document Collection: Gather academic, financial, ID, and collateral docs
5. Submit Application: Fill form online or at branch, attach documents
6. Loan Sanction: Get a sanction letter if approved
7. Loan Agreement: Co-applicant signs agreement and disbursal request
8. Fund Disbursement: Tuition fees paid directly to university
Documents Required for an Abroad Education Loan
To apply for a student education loan for study abroad. You need to collect the right documents. Incomplete paperwork often delays approval.
- Class 10th and 12th mark sheets
- Graduation/provisional degree certificate
- Entrance exam scores (GRE, GMAT, IELTS, TOEFL etc)
- Admission letter from foreign university
- Course cost and duration proof
- Income tax returns (last 2–3 years)
- Salary slips or Form 16
- Bank account statements (last 6 months)
- PAN card, Aadhaar card
- Proof of savings or investments
- Property title deed
- Registered sale agreement
- Latest property tax receipt
- Encumbrance certificate
- Loan application form
- Passport-size photos
- Student’s passport copy
- Visa (post-approval)
- Bank-specific declarations
Tips to Improve Your Chances of Loan Approval
Obtaining an education loan in foreign countries is competitive, particularly when banks determine a financial risk and the ability of the borrower to repay. These are the tricks that will help you:
Improve Academic Profile
- Score well in competitive exams like IELTS, GRE or GMAT
- Maintain a good GPA in past academics
- Choose reputed universities to show strong ROI potential
Choose a Strong Co-applicant
- Prefer parents or siblings with stable income
- Ensure the co-applicant has a clean credit score (700+)
- Have salary slips, tax returns and property proof ready
Show Clear Intent
- Write a strong SOP explaining your career goals
- Present a repayment plan to show responsibility
- Avoid gaps or confusion in your documents
Compare & Apply Smartly
- Avoid applying to too many lenders at once
- Check interest rates, moratorium options, and prepayment charges
- Talk to a study abroad consultant for guidance
Loan Repayment Terms & Moratorium Period
Understanding the terms of repayment can assist you in dealing with long-term finances. The majority of the educational loans to study abroad are flexible in repayment so it is important to read the fine print.
When Does Repayment Start?
- Repayment begins after course completion + moratorium period
- Moratorium = course duration + 6 to 12 months
Types of Repayment Options
| Repayment Type | Description |
| Simple Interest | Pay monthly interest during course |
| Partial EMI | Pay partial EMIs during course |
| EMI Holiday | No payment during course & moratorium |
| EMI after Moratorium | Full EMI starts after grace period ends |
Loan Tenure
- Varies from 5–15 years
- Shorter terms = less interest paid
- Longer terms = lower monthly EMIs
Prepayment
- Most banks allow early repayment without penalty
- Helps reduce total interest burden
Common Challenges Faced by Students (and Solutions)
Many students face problems while applying for a study loan for abroad especially first-time applicants. Here’s how to solve them:
| Challenge | Solution |
| Long processing time | Start loan process right after receiving offer letter |
| Rejection due to low CIBIL of co-borrower | Add a stronger co-applicant, improve credit health |
| Lack of collateral | Choose NBFCs or banks offering collateral-free loans |
| Loan covers only partial cost | Apply for university scholarships or part-time jobs |
| Bank demands university confirmation | Provide conditional offer + fee estimate and get clarification from the university |
| Documents not in order | Use a verified online consultancy to prepare your file |
Tip: Always keep digital copies of all documents. Many portals now offer digital uploads.
Government Subsidies & Schemes You Should Know
The Indian government offers education loan support to promote global education access. These schemes help reduce interest burdens and improve affordability.
| Scheme Name | Benefit | Who Can Apply |
| Padho Pardesh Scheme | Interest subsidy for minorities | Must belong to notified minority group |
| Central Sector Interest Subsidy (CSIS) | 100% interest subsidy during course + moratorium | EWS students (annual income < ₹4.5 lakh) |
| Dr. Ambedkar Scheme | Support for SC/ST students abroad | For higher studies in top 500 universities |
| Vidya Lakshmi Portal | One-stop loan application portal | All students can apply |
These are especially useful for students applying for education loan for abroad studies with limited family income.
Conclusion
By 2025 there will be a greater number of Indian students studying abroad through student loans than ever before with the increase in tuition fee and cost of living abroad. Preparation, comparison and clarity are the keys.
Whether it’s Harvard, Oxford, the University of Toronto or any other university abroad. A student loan can be obtained with the right paperwork, a co-borrower and a strong application.
When you are confused about which bank to go to or NBFC, what to submit and how to plan the repayment, then taking help from an overseas study expert like Transglobal Overseas will make a lot of difference.
When guidance and transparent loan terms you can easily make your study abroad dreams come true.
Frequently Asked Questions
1. What is the eligibility criteria to get an education loan to study abroad in 2025?
You must be an Indian citizen with a confirmed admission to a recognized foreign university. You should be 18 or older and have a co-applicant like a parent or guardian. Banks also check your academic background and the course’s job prospects.
2. What is the interest rate for study abroad loans in 2025?
The interest rates range between 9-14% annually. The rate varies depending on the bank, your credit rating and how secured or unsecured the loan is. The rates that are provided by public banks are usually lower when compared to those provided by the private lenders.
3. How much loan amount can be availed for studying abroad?
Banks offer up to ₹20–30 lakhs without collateral. With collateral, the amount can go up to ₹1.5 crores or more. The amount depends on your course, country, and repayment ability.
4. Is collateral required for getting a study abroad loan?
You don’t need collateral for loans up to ₹7.5 lakhs from many public banks. For higher amounts, banks usually ask for collateral like property, FDs, or insurance. NBFCs may offer unsecured loans at higher interest.
5. What is the process for applying for an overseas education loan in India?
First check your loan eligibility. Then, collect documents like admission letter, KYC, income proof, and course details. Submit them to the bank or NBFC. After review, they approve and disburse the loan.
6. Can education loans cover living expenses along with tuition fees?
Yes education loans cover tuition fees, living expenses, travel costs, books and insurance. The total amount must stay within the loan limit. The bank usually sends the tuition fee to the university and the rest to your account.
7. Can a co-applicant be added for an education loan?
Yes, a co-applicant is required. It can be a parent, sibling, or spouse with a regular income. The co-applicant’s credit score and income help in getting the loan approved.
8. What happens if the student is unable to repay the loan on time?
If you miss payments, the bank adds penalty interest. Your credit score drops, and legal action may follow. Co-applicant also faces the same impact. Some banks offer grace periods or loan restructuring.
