FAQs for Education Loans to Study Abroad: Get Answers Here

Studying abroad is a dream of lakhs of people in India; however, it is sometimes shattered due to a lack of financial resources. An education loan to study abroad comes in handy in this situation. However, there are different aspects to look after before getting a student loan to study abroad.

These aspects include factors such as interests charged by different abroad education loan providers in India, the amount required, tenure, loan repayment period, and many more. These factors lead to several questions in mind for international students related to education loans to study abroad. Read the article below to get answers to some of the frequently asked questions about student loans!

Types of financial institutions in India for education loans?

Four types of financial institutions in India provide education loans to students who plan to study abroad:

• Public banks: These include education loans offered by banks such as SBI, Canara Bank, Bank of Baroda, etc. These institutions usually give a loan of up to 1.5 crores with collateral.

• Private banks: Banks such as ICICI, HDFC, Axis Bank etc are private banks that give loans up to INR 40 lakhs without collateral. They also give loans with collateral.

• Non-Banking Finance Companies (NBFCs): These include names such as Avanse, InCred, and Auxilo which offer education loans up to INR 40 lakhs. They give loans with collateral as well as unsecured education loans.

• International lenders: International lenders give loans to international students including Indians without collateral or co-applicant.

Common Questions for Study Loans for Abroad for Indian Students

Here, we have mentioned a few of the commonly asked questions by Indian students regarding overseas education loans.

Q1) Which bank is best for an abroad education loan?

The type of loan that is best suitable to you depends on certain individual factors such as the required loan amount for study abroad, rate of interest, lower processing fees charged, shorter or longer loan tenure, loan repayment period, and many more. Hence, one must consider the above-mentioned points before selecting the bank that is best for an abroad education loan.

Some of the most popular banks that offer the cheapest education loans in India to study abroad are the State Bank of India, Punjab National Bank, Canara Bank, etc. These banks support aspiring students economically and fulfil their dream of studying abroad without a hassle.

Q2) What is the eligibility for an education loan to study abroad?

Although the overseas education loan requirements may vary depending on the financial institutions selected, there are some common requirements to be fulfilled and kept in mind while applying to one of the best education loans in India to study abroad. These include the following:

• The borrower must be an Indian citizen to be eligible to apply for any of the education loans.

• An admission or acceptance letter from the university of your choice in a foreign country should be submitted at the time of loan application.

• One should thoroughly complete the entire application process at the designated Bank or Financial institute in India.

• Applicants must fill out forms and submit passport-size photographs, photo ID, proof of residence and income, and academic transcripts.

• A renewed and valid passport before starting the application process for an education loan to study abroad is required.

• Some additional documents will be required at some of the loan-providing institutions like KYC, tuition fee statements, minimum grade criteria mark sheets, etc.

• In case the primary applicant for the education loan is not earning, there must be a co-applicant responsible for the application and loan sanction procedure.

Q3) Can I get a 100% loan to study abroad?

Yes, you can get a 100% loan to study abroad. Some of the education loan providers to study abroad that offer to cover 100% of the expenses include lenders such as private banks and Non-banking financial companies (NBFCs). A private bank may require applicants to cover at least 10-20% of education costs through their personal financial sources.

Some of the important things to consider to increase their chances to get a 100% loan to study abroad include the following:

• Study Cost: It is easier to get 100% finance for education in relatively affordable countries such as Germany, France, Norway, Poland, Italy, etc than expensive ones such as USA and UK.

• Institution type: Public banks are unlikely to provide 100% financial assistance in study abroad whereas private banks and NBFCs generally do offer 100% coverage loans to study abroad.

• Collateral: Providing collateral such as real estate or jewellery increases the chances of loan approval by strengthening the application.

• Course selection: The course selected by international students to pursue abroad is also evaluated on the basis of its ROI that is future salary expectations. A high-paying course generally has more chances of getting education loan approval.

Q4) Can I get a 15 lakh education loan?

Yes, you can get a 15 lakh education loan. IT can go up to 20 lakh as an education loan for study abroad as well. Some of the banks offering 15 lakhs education loan easily are mentioned below:

• State Bank of India

• Axis Bank

• HDFC Credila

• PNB

• Tata Capital

• Avanse Financial Services

• Canara Bank

Q5) Can I get a 1 crore education loan?

Yes, you can get a 1 crore education loan for study abroad. Most of the major public and private sector banks offer international students up to Rs 1 or 1.5 crore. The most important eligibility to get sanctioned a Rs 1 crore student loan for study abroad is an excellent applicant’s creditworthiness.

The entry requirement to get such as big amount may vary depending upon the financial institution; however, some of the common requirements are mentioned below:

• Good CIBIL score

• Strong credit history

• Stable income and employment/business details

• Required collateral documents such as real estate

• The appropriate loan-to-value (LTV) ratio usually up to 75-80% of the collateral value

• Meeting the bank's income and net worth thresholds

• Submission of required documentation like income tax returns, bank statements, etc.

Q6) How to get education loan for abroad studies without collateral?

To get education loan for abroad studies without collateral, students can contact private and public banks and some NBFCs as well. One can avail of up to Rs.7.5 lakh loan from public banks whereas private banks provide collateral free education loans up to Rs.40 lakhs.

Moreover, most of the education loans without collateral charge an interest rate generally between 10.50% to 14%. To be eligible for such loans, the annual income of the applicant/co-applicant must be above 4 lakhs with a good CIBIL score. A good GRE and IELTS score is a mandatory requirement as well.

International students must note that an education loan for study abroad without collateral is not available for the following courses:

• MBBS degree

• Foundation courses

• Pathway course

• Integrated courses

• UG degree

• Certificate courses

• Pilot Aviation programs

Q7) Which bank is best for education loan for abroad?

There are several best education loan providers in India to study abroad such as private sector banks, public sector banks and NBFCs. The best bank for education loan abroad depends on the personal circumstances, choices, and eligibility of the applicants.

A few of the best public bank for an abroad education loan include the State Bank of India, Union Bank of India, and Bank of Baroda whereas IDFC First Bank, ICICI Bank, and Axis Bank are a few of the top private banks for study abroad loans. To find a bank that is best for them, students must consider points such as loan amounts, convenience of faster processing, interest rates, and repayment terms.

Q8) How to get a student loan to study abroad?

To get a student loan to study abroad, prospects can look into different student loans for studying abroad that are provided by almost all the major banks in India. There are many private education loan providers in India as well. Candidates planning for an education loan to study in the UK, USA, Canada, or any other country should know about the top student loan providers in India and more importantly their terms and conditions.

After comparing and selecting a specific bank (private/public) or an NBFC of choice, aspirants can fill out the required application form either online or offline to opt for the education loan as offered by the financial institute.

After doing so one should submit necessary documents related to their finances, identity, academic background, property, and admission letter to get through with the application process. It can be followed by various other procedures which may vary according to the loan type, amount, and bank that a person chooses to associate with.

Q9) Can I get a 20 lakhs education loan without collateral?

Yes, it is possible for international students to get a 20 lakh education loan without collateral; however, they need to select a private bank to do so. It also depends on the type of course and country selected. Generally, collateral is not required for loans amounting to an average of Rs 4 lakhs. A few of the financial institutions offering an education loan of 20 lakhs include the following:

• ICICI Bank

• Axis Bank

• IDFC Bank

Q10) What are some education loan by Government?

There are several schemes offered by the government of India to Indian students to support them financially in pursuing higher education abroad. The top education loans offered by the government for students seeking abroad studies include the following:

• Padho Pardesh Scheme

• Vidya Lakshmi Portal Education Loan

• Education Loan Scheme of the NBCFDC

• Dr Ambedkar Central Sector Scheme

• Gujarat Government Education Loan for Studying Abroad

Q11) What is education loan for abroad interest rate?

The applicable interest rate depends upon the loan amount as well as the selected education loan providers in India. As the majority of the students planning to study abroad opt for banks and financial institutions such as SBI, HDFC, PNB, etc, they must be aware of the interest rates of each loan provider to make an informed decision.

Some of the best education loan providers in India, which provide loans for abroad education are mentioned below along with their interest rates per annum. They are known for providing cheap education loan that covers a good proportion of their costs and expenses as a part of their education journey abroad.

The interest rate on student loans in India:

Q12) Can I get an education loan from SBI to study abroad?

Yes, you can get an education loan from SBI to study abroad. However, you must comply with the basic requirements to be eligible to obtain it. There are two types of State Bank of India student loans abroad. These are:

• SBI Student Loan Scheme: The available loan limit is up to 7.5 lakhs for Indian students for courses such as MCA, MBA, and MS. There is no processing fees.

• SBI Global Ed-Vantage Scheme: The available loan is provided within Rs 7.5 lakhs to up to Rs 1,5 crore for Indian students for all UG, PG, and PhD courses. There is a processing fee of up to RS 10,000.

Q13) How much loan can I get from SBI for education?

Students can get up to Rs 7.5 as an education loan to study abroad without collateral from the State Bank of India. With sufficient collateral provided by the applicants, they can also avail of an education loan of up to 1.5 crores from SBI.

Q14) Does HDFC provide education loans for abroad studies?

Yes, HDFC Bank does provide education loans for abroad studies. This bank offers students with various customisable plans at a competitive interest rate with flexible repayment terms and tenure. Moreover, it provides 100% finance for foreign Education Loans of Rs 20 lakh or more. Funds from Education Loans can be used for foreign education in over 950 courses across 36 countries.

Q15) Can I get 40 lakhs education loan for study abroad?

Yes, you can get a 40 lakh education loan for study abroad. However, you must demonstrate the right eligibility to get your loan sanctioned. To avail of this big sum of money, applicants generally require an excellent CIBIL score, sufficient collateral proof, a good GRE/GMAT score as well as an English proficiency score.

Q16) What is the interest rate on student loans?

The interest rates on student loans depend on the type of financial institution: whether private or public as well as their internal terms. A few of the bank interest rates on student loans are mentioned below:

• SBI: 10.05% fixed interest is charged for study abroad loans above Rs 7.5 lakhs.

• Axis Bank: the interest rates vary as per the amount taken as a loan.

• HDFC Credila: 12.80% fixed interest is charged for study abroad loans above Rs 1 lakhs.

• Tata Capital: 10.99% interest is charged for loans above Rs 50,000

Q17) What are the documents required for education loans in India to study abroad?

Certain documents are required to be submitted to the selected education loan provider in India to study abroad. It is one of the crucial elements in getting the loan approved. So, students must have a complete understanding of the kind of documents required to apply for the study abroad loan. A list of important documents is provided below for loan application:

• Applicant’s academic transcripts

• Photographs

• Acceptance/admission letter from a university abroad

• Financial assets/ income proof

• Bank statements

• Collateral documents

• Birth certificate

• Valid passport

• KYC documents

• Other identity proofs such as Aadhar, PAN, Voter ID, etc

• Proof of residence