You’ve received your dream university acceptance letter from abroad.
Congratulations!
But now comes the challenge that worries thousands of Indian students every year. You have to secure your study abroad education loan on time. Missing your visa deadline because of loan delays can derail your entire plan. In some cases, it can delay admission by a month.
Here’s the good news – loan sanction delays are largely preventable. With proper planning, you can ensure your loan gets approved well before your visa appointment. In this guide, I will explain exactly how long the loan process takes. I will explain what causes delays and how to get past bottlenecks.
How long does an education loan sanction really take?
It is commonly assumed that a study abroad education loan sanction process lasts 7 – 10 days. It is correct for the most part, but there are cases where it can drag on for a while. The following timelines are typical:
Public Sector Banks (SBI, Union Bank, Bank of Baroda)
- Unsecured loans offering no collateral receive sanction in 15 – 20 working days.
- Secured loans with proper collateral may take 20 – 30 working days.
- From application to a sanction letter might take 3 – 5 weeks
Private Banks and NBFCs (Axis, ICICI, Credila, Avanse)
- Unsecured loans offering no collateral receive sanction in 7 – 15 working days.
- Secured loans with proper collateral may take 12- 20 working days.
- Overall processing time is between 2 – 3 weeks.
Recently, the government has asked PSU banks to process education loan applications within 15 days. But at ground level, that is yet to be a standard benchmark.
Why do loan sanction delays affect your visa?
As students going abroad know well, visas are not issued in isolation. It is closely tied to admission and the availability of funds. A delay can cascade down the line.
Many countries require you to show proof of funds, usually living expenses and tuition for a year, before they issue a student visa. Here are a few examples:
- US universities require the applicant to submit financial proof to issue the I-20. After that, F-1 visa processing can take another 4 – 8 weeks.
- A Canadian Study Permit mandates that students must fund a GIC account with ₹14.5 lakhs before applying. This often requires partial loan disbursement. Visa processing typically takes 2 – 4 weeks after submission.
- For a United Kingdom study visa, about £10,000 to £13,000 has to be held for 28 consecutive days in a bank account. This is followed by 4–6 weeks of visa processing.
- An Australian student visa requires that you show funds for living (about ₹16.4 lakhs) plus first-year tuition fees in your account.
Given the requirement, it is wise to start the loan process at least five to six months before the course start date.
What causes education loan sanction delays
After reviewing hundreds of student loan cases, I have noticed certain patterns. Delays are not caused by the bank alone. They also stem from avoidable mistakes by the applicant.
- Incomplete or Incorrect Documentation
This is the most frequent reason applications stall. Banks hold back on loan sanction when documents fail basic checks. Common issues include: outdated salary slips, property papers that don’t offer clear proof of ownership.
- Property Valuation Delays
If your parents are offering property as collateral, it has to be valued by an official. This process can be time-consuming, and it can often take up to 2 weeks for a valuer to appraise a house.
- KYC and Identity Mismatches
Banks follow strict KYC norms and verify customers’ identities to prevent fraud and manipulation. Even small inconsistencies can trigger reverification. At all costs, avoid variations in name spelling across different documents, signature inconsistencies, and address variations.
- Co-Applicant Availability
Education loans require active participation from the co-applicant, typically a parent. You have to ensure they are available for interviews and signing documents.
Practical steps to avoid common education loan sanction delays
Education loan sanction delays can be easily avoided with a proper approach and organization. I will share how you can ensure that there is no delay in the sanction process.
Start the Loan Process Before Admissions
Many students start the process after they receive the admission letter. Banks do require a mission letter to issue the loan, but they can also process provisional loans. At the very least, the entire research and document organization process can be completed beforehand.
Apply to More Than One Lender
Relying on a single lender is often risky. Submit applications to two lenders. If one delay,s you can shift to the other. It will cost more by way of processing fees, but you will have peace of mind.
Maintain Absolute Consistency in Documentation
Names, addresses, and signatures must exactly match across all documents.
An example of what to avoid –
The Aadhar Card states name and address as:
Vijay Singh Chauhan
Flat No G-102, Ground Floor, Maple Leaf Heights, Sector 12-A, Vasant Kunj Extension, New Delhi – 110070
And ITR states it as:
V.S. Chauhan
G-102, Maple Leaf Heights, Sec 12-A, New Delhi – 110070
Screen beforehand for this type of discrepancy.
Communicate Proactively With the Bank
Loan applications move faster when you are in touch with bank officials. Bank branches receive hundreds of loan applications weekly. Out of sight sometimes translates to out of mind. Keep in touch and ask about the status of the application often.
Choose Lenders Based on Study Destination
Different lenders offer varying advantages depending on where you want to study. PSU banks have ready-made loans for a pre-approved list of universities. Similarly, SBI’s Global Ed-Vantage scheme allows pre-I-20 sanctioning for the United States. If you are almost out of time, NBFCs such as Leap Finance, Credila, and Avanse are faster at processing applications.
Keep the Loan Co-Applicant Fully Involved
The co-applicant of the study abroad education loan is also interviewed by the bank. Bank officials need the co-applicant for income verification, document submission, and agreement signing. In case the co-applicant is traveling or unavailable for some reason, there will be a loan sanction delay.
Mistakes are not uncommon at all when you apply to multiple banks for education loans. It is but natural that the stress of the admission and loan process can cause errors.
GradRight smoothens the entire loan sanction process through its unique single-window loan processing platform. Our experts will help you find the best loan for your study destination and university, and ensure that the loan is processed on time.
Thousands of students have already availed GradRight’s services. Among them is Rohit Sanket, who easily secured a loan from a leading financial institution to study a Master’s in Electrical and Computer Engineering at The Ohio State University.
Final advice for avoiding last-minute loan sanction delay
From my experience, I would suggest you do not approach the addition process and loan sanction sequentially but in tandem.
Loan files often move through multiple internal stages that are not disclosed publicly. There is a CIBIL check, document verification, encumbrance check, and more. As a customer, you can’t speed it up. What you can do is make the loan application completely accurate and precise. Taken together, it shifts the loan process from a reactive task to a planned one and minimizes loan sanction delays.
At GradRight, we are always available to support and guide you through the loan application process. Please reach out in case you need any assistance.
