Applying for an Education Loan for Study Abroad? Do it Right


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Picture of Shivani Mani

Shivani Mani

Lead, Student Success - FundRight

For most Indians “studying abroad” and “education loans” come together.

An education loan for studying abroad is one of the most important decisions.

But with so many banks and lenders, the selection isn’t easy. Sometimes, you might even have to compromise on your dream university.

Don’t worry, we have got your back.

FundRight can help you get a student loan for studying abroad with the lowest rate of interest with zero collateral.

How, you ask?

This is how.


Now, let’s get you the perfect education loan.

How To Select The Perfect Education Loan For Studying Abroad?

Before you go out and start applying for student loans, there are a few things that you must be aware of.

Here are the five most important things that you need to understand to select the best loan for you.

1. The Total Loan Amount You Need

You need money for your tuition, accommodation, travel, etc. The amount of money you get (or can get) plays a major role in your higher education. Your first step in the journey to get an education loan for studying abroad starts with selecting a budget.

It decides the country of study, the college you can go to, the course you can pick, the house you can live in, and more. It also decides another crucial thing.

It decides the level of financial sacrifices your parents have to make.

Here is how you can easily estimate the amount of loan you require.

  1. Pick a college and a course, and find out the tuition fee.
  2. Look up the cost of living for that town.
  3. Add 20% of the cost of living as “miscellaneous expenses”.

Add it all up and you can get the approximate amount you need.

To keep your loan amount the lowest you need to choose the right university for you. Based on your merit and career choice, the right university will save you a ton of money.

We can help you select the right university. A university that will be the best investment for your career and gives you the best opportunities.

After you finalize the amount of your loan, you need to think of the repayment period.

2. Loan Repayment Period

You need to know three things.

  1. Shorter repayment period = higher rate of interest.
  2. Longer repayment period = more money as interest.
  3. Moratorium period: The period of time in which you are not obligated to make payments (but the interest accrues).

Depending on your lender, your moratorium period could vary. Usually, it is one year more than your course duration.

Our recommendation is you take a shorter repayment period so that you will pay less in the course of repayment. However, you also need to consider your situation and make a decision on that basis.

The most crucial thing before you select a loan (or a lender) is the rate of interest.

3. Rate Of Interest Of The Loan

Your life depends on it.

Suppose you take a loan of ₹22 lakhs with a 300 basis point difference, you will be paying nearly 30% of the principal by the end of a decade.

That is a lot.

FundRight can save you between 2% to 5% on your student loan’s interest rate.

No hidden fees.

We will have 14+ banks, NBFCs, and international lenders bidding competitively for you.

But which lender will be the best for you?

You decide, because this is how Indian students find their best education loan.

4. Preferred lenders

You can get your education loan for studying abroad from banks and Non-Banking Financial Companies (NBFCs).

While choosing a lender, check if your university has any affiliations with your bank or NBFCs. It will get your loan approved fast and your interest rates will decrease significantly.

Another thing that you must check is margin money. That is the amount of money you can pay from your own pocket for your education. It varies between 5% to 15% depending on factors like choice of university and preferences of the lender.

Generally, banks and NBFCs choose who they give an education loan.

At FundRight, you choose your lender.

Rather than you competing for approval, FundRight gives you the freedom to choose a lender based on your requirements.

Before you take a loan, you must think about how you can pay it back.

5. Future Earning Estimations

You want to repay your education loan, right?

This is the most important part. Do a deep dive and analyze the career opportunities you might get through your field of study. The majority of banks and NBFCs evaluate this critically even if it is a collateral loan.

There is one disadvantage when you are applying for student loans for studying abroad from traditional banks. They are more likely to evaluate your field of study through an outdated lens and put more importance than necessary on that.

Most banks only recognize the top 1000 universities globally and approve loans based on that bias.

This is unfortunate, especially for truly meritorious students.

FundRight lets you find your best education loan based on your merit and nothing else. Because lenders bid on your loan, you benefit from the competition. Whims and opinions won’t sway the opinion of the risk assessment officer of any bank, when you look for your education loan via FundRight.

We have discarded the blurred and outdated mindset while evaluating your profile. Our lenders only see the information necessary and nothing more.

Now, let’s jump into the application process.

How To Apply For An Education Loan For Studying Abroad?

Before you go ahead and start sending out your applications to banks and NBFCs, you need to know the two kinds of loans.

Collateral and non-collateral loans.

1. What Is The Difference Between Collateral And Non-Collateral Loans?

A collateral loan is taken in exchange for a pledge of an asset owned by the borrower.

The non-collateral loan doesn’t require any type of collateral. Due to this nature, non-collateral loans generally have a higher rate of interest. On FundRight, you can find a loan without collateral, and still pay the lowest rate of interest in the market. Create a profile, let lenders bid, compare bids, ask for advice from our advisors, and select your best loan – that’s how things work on FundRight.

Generally, students taking an education loan for studying abroad opt for a collateral loan as it is easier to obtain. The most popular benefits of it are that you can borrow a huge sum and with a low-interest rate.

But, there is a huge risk.

You will lose the collateral if you fail to pay it back as agreed. That means you can lose your property, land, house, etc. What makes it more difficult is you are completely vulnerable to any unforeseen situations like accidents, sickness, etc.

FundRight can help you with securing a low-interest loan without any collateral.

We are concerned with one thing.

Empowering students.

If your grades and scores are consistently high we will be worrying about your financial needs. FundRight helps students in need of an education loan to study abroad get low-interest student loans very quickly.

Let’s take a look at the documents that you need to submit before your application is examined.

2. Documents Necessary For Applying For A Student Loan To Study Abroad: Checklist

Keep this checklist handy while you apply for a student loan to study abroad.


Academic documents Personal documents Financial documents
● Academic transcript

● Passing certificates

● Acceptance letter from university

● Work experience proof (if any)

● Certifications and awards

● KYC documents

● Passport photographs

● Residence proof

● Birth certificate

● Income proof

● Collateral documents (if it is a collateral loan)

● Bank statements


If you are applying for a loan to a bank, you will also have to

  1. Fill out the application forms by banks.
  2. Submit any additional documents that the banks need.
  3. Repeat this process with every bank.

With FundRight you will have to submit the documents once. You upload them, and you’re done. Plus, your information remains anonymized and secure. No more banking spam, because you have better things to do.

Think of all the time and hassle you just got saved.

Keep in mind that all the details you will be submitting should be secured and private.

3. Protect your personal data

You will be submitting a lot of personal information. Data like your collateral details, academic details, bank statements, etc. With data breaches becoming more and more common, you should be careful about how your data is stored.

If your data is leaked, do not be surprised if a lot of third-party loan agents start calling you up.

FundRight keeps all your data anonymous to lenders.

Your lenders don’t need to know everything about you. They will only have access to the information they will need to approve your loan like your GRE and TOEFL scores.

But, how do lenders decide whether an applicant is eligible?

4. Eligibility Criteria For International Student Loans

The following things are thoroughly examined when considering your profile for a loan.


Criterion What does it encompass?
Student’s profile Academic background, co-curricular involvement, scores in tests like GRE, TOEFL, work experience, and more.
Guardian’s profile Financial background, owned properties, annual income, current standing loans, sources of revenue, etc.
Recognized university Ranking of the university, acceptance rate, notable alumni, reputation, and more and checked thoroughly.
Norms of lenders This depends on the terms and conditions of the organization that you are requesting your loan.


As banks and NBFCs are legacy organizations, they will have their predefined markers. It can be difficult for you to secure a loan if you don’t meet those requirements. For instance, they might charge a higher interest if the university you are joining is not up to their mark.

FundRight’s lenders are unbiased.

On top of that, you get to select who gives you the education loan.

As of April 2022, we have 14+ registered lenders (more added every month) who are ready to help you give you a career boost. Just fill out your FundRight profile and select a lender according to your needs.

After you have applied for a loan, it should get approved as fast as possible.

5. How Long Does It Take To Get Your International Education Loan Request Approved?

The faster the better.

You are taking a loan because of an immediate requirement.

Depending on your lender it might take anything between 1-3 months before you get the money. The approval process of banks is usually slow as there is a lot of verification required. Expect it to be longer if it is a collateral loan.

FundRight approves your loan within 2 days.

Yep. Just fill up your profile and we will evaluate it and you will hear from us within 48 hours. You don’t have to call us for updates, we will drop you a message.

Get started now by learning more about FundRight.

FAQs About Education Loans To Study Abroad

1. Is Income Tax Returns (ITR) mandatory for international education loans?

No. More often than not the applicants don’t have a job.

2. Which bank has the lowest interest rate for education loans to study abroad?

It is hard to say as it depends on multiple factors like your university, course duration, etc. The best bet is to have multiple options and choose the one with the least rate of interest.

FundRight gives you the flexibility to choose between multiple lenders.

3. What is the longest moratorium period?

Usually, it is the duration of the course plus another year. Your lender might increase that period if you request them under special conditions. For example, if you need more time to complete the course.

4. Can I get loans for short-term courses (less than a year)?

Banks generally don’t give loans for courses that are shorter than a year.
The good news is you can get loans for the short term from FundRight.

Create Your Account With FundRight Now

Get your education loan for studying abroad approved in five simple steps.


It’s literally that easy. Get started by creating your FundRight profile.

Picture of Shivani Mani

Shivani Mani

Shivani, aka 'Sheen' brings in 15+ years of experience in banking & finance. An IIM-A alumna, she actively interacts with students & provides actionable solutions to their study abroad funding issues.

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