Punjab National Bank Education Loan for Studying Abroad 2026: PNB Udaan Scheme Explained

Q: Why collateral is needed for Punjab National Bank education loans?

Collateral is required for PNB education loans because banks want to minimize their risk. If you default on the loan, collateral allows the bank to recover the money by selling the asset. Common types of collateral include: – Fixed deposit – FDs are easy to manage and liquidate, making them a preferred choice for banks. – Property – Freehold property is the only choice that many customers have in case of large loans. But there can be no tenants. The following are usually not accepted by banks as collateral: – Jewelry is not accepted because there is no easy way to hedge the fluctuations in price. – Shares, due to their volatile nature, are avoided for the same reason as jewelry.

Q: Does attending a well-known institution help with getting a student loan?

Yes, the reputation of your chosen institute can affect loan approval. Banks prefer lending to students who have received admit to well-known institutions because they are seen as lower risk. Reputable schools often have strong job placement records, which increases the likelihood of you being able to repay the loan.

Q: Why does prepayment carry a penalty?

When a bank gives you a loan, they expect to earn interest over the full loan term. If you pay off the loan early, the bank loses out on the interest they would have earned in the remaining years. Therefore, lenders charge a prepayment penalty on education loans to compensate for lost interest if the loan is repaid earlier than expected.

Shivani Mani

8 min read • Jul 3, 2026

Punjab National Bank (PNB), founded in 1894 and headquartered in New Delhi, is one of India’s largest public sector banks and a major provider of education loans for study abroad through its dedicated PNB Udaan scheme. PNB is one of the few public sector banks offering both floating and fixed interest rate options, with a distinctive premium university classification that rewards admits to top-ranked global institutions with lower rates.

This guide covers the PNB Udaan scheme in detail, current interest rates, the premium university advantage, eligibility, documents, and how PNB compares with other public banks for study abroad financing.

PNB Udaan Education Loan 2026 – Quick Reference

Feature	Details
Scheme name	PNB Udaan – dedicated scheme for study abroad
Bank type	Public sector bank. Founded 1894. HQ: New Delhi.
Interest rate (floating)	8.10% – 10.10% p.a.
Interest rate (fixed)	9.10% – 11.60% p.a. (PNB is one of few public banks offering fixed rate option)
Premium university rate	8.35% p.a. (50 top-ranked global universities identified by PNB)
Non-premium university rate	9.60% p.a.
Maximum loan (secured)	Up to Rs 2 crore
Maximum loan (unsecured)	Up to Rs 7.5 lakh
Need-based financing	No fixed upper cap – sanctioned amount determined by actual cost of education
Girl student concession	0.5% on floating rate for non-premium universities (no further concession on premium or fixed rate)
Moratorium interest concession	1% discount if interest paid during moratorium (course + grace period)
Processing fee	1% of sanctioned amount, max Rs 10,000. Fully refundable on first disbursement.
Margin (above Rs 4 lakh, abroad)	15% of total cost
Moratorium period	Course duration + 1 year
Repayment tenure	Up to 15 years
Co-borrower required	Yes – mandatory, immediate family member

PNB’s interest rates are linked to RLLR (Repo Linked Lending Rate) + Basic Spread (BSP) + additional premium depending on loan product. Rates are floating unless you specifically opt for the fixed rate option. Always verify current rates on pnbindia.in before applying.

PNB Education Loan Schemes – Complete List

Scheme	Purpose	Max Loan	Margin
PNB Udaan	Study abroad – job-oriented professional/technical courses	Need-based, up to Rs 2 crore secured	15% above Rs 4 lakh
PNB Saraswati	Studies in India and abroad (broader domestic-focused)	Varies	5% above Rs 4 lakh (India)
PNB Pratibha	Collateral-free for 103 premier Indian institutes (IITs, IIMs, NITs, AIIMS, XLRI)	Based on institute	No margin
PNB Kaushal	Vocational education and skill development courses	Up to Rs 7.5 lakh	No margin
PNB Honhaar / PNB Pravasi	Specific demographics and state-sponsored initiatives	Varies	Pravasi: 20% margin
PNB PM Cares Education Loan	Special scheme for specific eligible categories	Varies	5% above Rs 4 lakh

This guide focuses on PNB Udaan, the primary scheme for Indian students planning full-time study abroad programs.

Also Read: IBA Model Education Loan Scheme Guide

PNB’s Premium University List – The Key Rate Advantage

PNB has identified 50 top-ranking universities worldwide and classifies them as ‘Premium’ – students admitted to these institutions get preferential treatment:

Category	Interest Rate	Processing Speed	Countries Covered
Premium universities (50 identified)	8.35% p.a.	Faster application process	USA, UK, Singapore, Switzerland, Sweden, France, Canada, China, Japan, Germany, Belgium, Hong Kong
Non-premium universities	9.60% p.a.	Standard processing	Same countries, broader institution list

The gap between premium and non-premium rates is 1.25 percentage points – meaningful over a 15-year tenure. On a Rs 40 lakh loan, this difference amounts to approximately Rs 4-5 lakh in extra interest over the loan tenure. Check PNB’s specific premium university list directly with the bank, as it is periodically updated based on global rankings.

Also Read: Compare Education Loan Interest Rates – All Lenders 2026

Compare PNB’s premium and non-premium rates against 18+ other lenders for your specific university. Compare Education Loans on GradRight

PNB Udaan Interest Rates 2026 – Detailed Breakdown

Loan Category	Floating Rate	Fixed Rate
Premium universities	8.35% p.a.	Confirm with bank – typically 1% higher than floating
Non-premium universities	9.60% p.a.	9.10% – 11.60% p.a.
General range (all categories)	8.10% – 10.10% p.a.	9.10% – 11.60% p.a.
Girl student concession	0.5% (non-premium floating only)	Not applicable
Moratorium interest payment concession	1% discount on overall rate	Applies if interest paid during course period

PNB is one of the few public sector banks offering a fixed interest rate option for study abroad loans – most public banks (SBI, Union Bank, Bank of India) offer floating rate only. If you want EMI certainty for budget planning and are willing to pay a slightly higher initial rate, PNB’s fixed rate option is a genuine differentiator.

Collateral and Margin Requirements

Loan Amount	Collateral	Co-borrower
Up to Rs 7.5 lakh	No tangible security or third-party guarantee required	Parent(s) or guardian as joint borrower(s)
Above Rs 7.5 lakh (up to Rs 1 crore)	Tangible collateral covering 100% of loan value required	Parent(s)/guardian as joint borrowers with collateral
Rs 1 crore and above	Proportional security and stronger financial support required	Joint borrowers with substantial collateral backing

Acceptable collateral: residential/commercial property, agricultural land (subject to terms), government securities, public sector bonds, units of UTI, NSC, life insurance policies, bank deposits, shares or debentures. Agricultural land specifically being accepted as collateral is a notable PNB feature not all banks offer.

Margin requirement: 15% of total cost for loans above Rs 4 lakh for study abroad. Any scholarship or assistantship awarded counts toward fulfilling this margin requirement, reducing your personal cash contribution.

PNB Udaan Eligibility Criteria

Criterion	Requirement
Citizenship	Resident Indian citizen. Foreign citizens, NRIs, and OCIs are NOT eligible for PNB Udaan (OCIs should consider PNB Pravasi Shiksha Loan instead).
Age	Minimum 18 years. No specific stated upper limit, though general public bank norms suggest up to 35 years for primary consideration.
Academic qualification	For Graduation/Diploma: completed Class 12 (10+2). For Post-Graduate: bachelor’s degree from a recognized Indian university.
Minimum marks	Minimum aggregate marks required in last qualifying exam (10+2 or graduation) – typically around 60%. Relaxation given to SC/ST students.
Admission	Confirmed admission to an eligible institute and course – must be secured before applying for the loan.
Eligible courses	Job-oriented professional/technical courses; MCA, MBA, MS for PG; CIMA (London), CPA (USA); diploma/degree courses in aeronautical, pilot training, shipping (DGCA/Shipping authority approved).
CIBIL history	Good credit history required for both applicant and co-borrower.

What Does PNB Udaan Cover?

Tuition fees and university deposits
Living expenses – accommodation, food, transport
Hostel fees and expenses
Examination, library, and laboratory fees
GIC (Guaranteed Investment Certificate) for Canada / Blocked Account for Germany
One-way travel/passage money for studies abroad
Life insurance premium for the student
Refundable deposits required by the institute
Books, equipment, uniforms, and instruments
Computer/laptop (reasonable cost) if required for the course
Project work, thesis, and study tour expenses

PNB Udaan covers nearly all expenses expected while studying abroad – one of the more comprehensive expense lists among public sector banks.

Compare PNB’s comprehensive coverage against 18+ lenders to find the best fit for your study abroad budget. Compare Education Loans on GradRight

Documents Required for PNB Udaan

Student Documents

ID proof: PAN card, passport
Academic records: Class 10, 12, degree certificates and mark sheets
Admission proof: confirmed admission letter from foreign university
Statement of expenses / cost of attendance from university
Course prospectus mentioning admission, examination, and hostel charges
Passport-sized photographs

Co-borrower Documents

PAN card, address proof
Income proof: salary slips + Form 16 (salaried) or ITR (self-employed)
Bank account statement (last 6 months)

Collateral Documents (above Rs 7.5 lakh)

Property/land documents with government-approved valuation
FD certificates, NSC, insurance policy documents (if used as collateral)

How to Apply for PNB Udaan

Visit the official PNB website, click ‘Retail’ under the Product menu, and download the education loan application form. Alternatively, apply via Vidya Lakshmi Portal – complete the single application form and select Punjab National Bank as your financial partner.
Fill out the application form after printing it, and gather all required documents.
Visit your nearest PNB branch and submit the completed form with documents for verification.
Pay the processing fee (1% of sanctioned amount, max Rs 10,000) – this is fully refundable on first disbursement.
Bank reviews and verifies your application, conducts collateral valuation if applicable.
Receive sanction letter. Review interest rate (floating or fixed, premium or non-premium category), margin, and moratorium terms carefully before signing.
Disbursement happens in stages aligned with your university’s fee payment schedule.

Government Subsidies Available on PNB Education Loans

Scheme	Eligibility	Benefit
CSIS	Family income < Rs 4.5 lakh. IBA scheme loan.	0% moratorium interest
Padho Pardesh (Minority Communities)	Minority community students studying abroad. Part of PM’s 15-point welfare programme.	100% interest subsidy during moratorium for overseas studies
Dr Ambedkar Scheme (OBC/EBC)	OBC: income < Rs 3 lakh. EBC: income < Rs 1 lakh.	0% moratorium interest

Apply for applicable subsidies through your PNB branch at the time of disbursement – not retroactively.

PNB vs Other Public Banks – Quick Comparison

Feature	PNB Udaan	SBI Global Ed-Vantage	Bank of India Star Abroad
Premium rate	8.35% (50 identified universities)	8.40-10%	8.40-10%
Fixed rate option	Yes – rare among public banks	No – floating only typically	No – floating only typically
Max secured loan	Rs 2 crore	Rs 1.5 crore	Rs 1.5 crore
Unsecured limit	Rs 7.5 lakh	Up to Rs 50 lakh (premier institutions)	Rs 7.5 lakh standard
Processing fee	1%, max Rs 10,000 (refundable)	Nil	Rs 10,000-20,000 (refundable)
Moratorium concession	1% if interest paid during moratorium	Confirm with branch	Confirm with branch

PNB’s distinctive advantages: highest secured loan cap (Rs 2 crore) among comparable public banks, and the rare fixed-rate option. The premium university classification system rewards students at top global institutions with meaningfully lower rates.

Also Read: Compare Education Loan Interest Rates – All Lenders

Before finalizing PNB, compare with SBI, Union Bank, BOI and 15+ other lenders simultaneously. Compare Education Loans on GradRight

Related Education Loan Guides

Compare Education Loan Interest Rates – All Lenders
IBA Model Education Loan Scheme Guide
SBI Education Loan for Study Abroad
Bank of India Education Loan
Union Bank Education Loan
Education Loan Moratorium Period Guide
Government Education Loans for Studying Abroad

Stay up to date, sign up for our newsletter

Frequently Asked Questions

Why collateral is needed for Punjab National Bank education loans?

Collateral is required for PNB education loans because banks want to minimize their risk. If you default on the loan, collateral allows the bank to recover the money by selling the asset. Common types of collateral include: – Fixed deposit – FDs are easy to manage and liquidate, making them a preferred choice for banks. – Property – Freehold property is the only choice that many customers have in case of large loans. But there can be no tenants. The following are usually not accepted by banks as collateral: – Jewelry is not accepted because there is no easy way to hedge the fluctuations in price. – Shares, due to their volatile nature, are avoided for the same reason as jewelry.

Does attending a well-known institution help with getting a student loan?

Yes, the reputation of your chosen institute can affect loan approval. Banks prefer lending to students who have received admit to well-known institutions because they are seen as lower risk. Reputable schools often have strong job placement records, which increases the likelihood of you being able to repay the loan.

Why does prepayment carry a penalty?

When a bank gives you a loan, they expect to earn interest over the full loan term. If you pay off the loan early, the bank loses out on the interest they would have earned in the remaining years. Therefore, lenders charge a prepayment penalty on education loans to compensate for lost interest if the loan is repaid earlier than expected.