Find Your Best Education Loan to Study Abroad
World’s first loan bidding platform, 15+ lenders, from India and abroad, Get loan offers and approval in 2 days.
Find your Best education loan for study abroad
World’s first loan bidding platform, 15+ lenders, from India and abroad, Get loan offers and approval in 2 days.
Get Your Best Study Abroad Loan
Save lakhs on your education loan with the world’s first loan bidding platform. On FundRight, banks compete for your loan, and you save. Get loan offers in 2 days, shortlist from 15+ lenders, get approval in 14 days.
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Taking an education loan could be the smartest financial decision you make!
Headed abroad for your Master’s in 2024? Leap over your international education loan woes, just like Mario!
Smarter Way to Study Abroad
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Sort Your Educaiton Loan by Shiveetalks
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Watch GradRight in Action
Sneak a peek at the buzz we're creating in the study abroad ecosystem
Thought Leaders at ShiftED
Sort Your Educaiton Loan by Shiveetalks
Reasons to do your Master’s
Smarter Way to Study Abroad
Headed abroad for your Master’s in 2024? Leap over your international education loan woes, just like Mario!
Taking an education loan could be the smartest financial decision you make!
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Study Abroad Loan Guide
Explore our guide on securing an education loan for studying abroad. We explain what a study abroad loans, interest rates, process, benefits, and more.
Over a million Indian students are now abroad. Most are in North America. The US and Canada are top choices, but destinations like the UK, France, and Germany are also popular.
A postgraduate degree from abroad is invaluable. But the price tag for studying abroad can be steep.
Take the US, for example.
- Tuition for a two-year program can reach $55,000 (₹46 lakhs), along with monthly living expenses of at least $1,000 (₹82,000), visa fees, and airfare.
- Visa fees and airfare add to the overall cost. While these figures are specific to the US, studying elsewhere can be just as expensive.
- For most students, the dream of studying abroad becomes real because of the option of study abroad loans.
A study loan for abroad is a special type of loan from a bank or financial institution to help students pay for their education in another country.
Since studying abroad can be expensive, this loan covers things like :
Tuition fees: The money the university charges you to attend classes.
Living expenses: Costs like housing, food, and transportation in the foreign country.
Basically, it's a way to borrow money for your education abroad, and then pay it back with interest later, once you've finished your studies and hopefully landed a good job.
Most public and private sector banks in India offer education loans for abroad studies. Moreover, there are many NBFCs and international lenders that offer lucrative education loan products to Indian students for study abroad.
For study loans for abroad education, banks set interest rates based on the repo rate. This is the rate at which the Reserve Bank of India (RBI) lends money to banks.
Banks add a few percent to the repo rate. The margin is for their operating costs, profit, and potential loan defaults.
This explains why education loan rates typically range between 8.5% and 15%, even with the current repo rate at 6.5%.
You can choose between fixed and floating interest rates on the education loan in India for study abroad.
Fixed Rate
Fixed rates remain constant throughout your loan term. It offers predictability but potentially locks you into a higher rate if interest rates decrease.
Floating Rate
Floating rates adjust periodically based on the repo rate. If the repo rate goes from 6.5% to 7%, all loan interest rates will rise. The converse is also true.
Education abroad requires a significant investment of several lakhs. This may seem daunting. For this reason, study loans for abroad are invaluable aids for students.
Here are the key benefits of utilizing an education loan to finance your studies abroad.
1.Bridge the Financial Gap
Education loans can cover your tuition fees and a large portion of your living expenses.
They can even be used for additional costs like travel and study materials. This makes international education a possibility for everyone.
2.Moratorium Period
Education loans for abroad studies offer a grace period, known as a moratorium. You can delay repayments until you find a job.
This breathing room lets you concentrate on your studies. You can upskill without the immediate stress of managing debt.
3.Tax Benefits
Education loans usually have lower interest rates compared to other loan options.
In addition, the Indian Income Tax Act (Section 80E) provides tax deductions on interest payments on education loans in India for study abroad.
This makes it a cost-effective investment in your future.
4.Covers Sundry Expenses
Education loans in India for study abroad go beyond simply covering tuition fees. They can finance various education-related expenses. These include travel costs and study materials. Education loans can even pay for study abroad trips.
How does a student qualify for an education loan for abroad studies?
These are the usual eligibility criteria. Remember that some banks may have slightly modified rules. But most of it is the same for all banks.
Indian Resident
You must be a citizen of India. Those who are Indian citizens but have been abroad for a large number of years (Resident but Not Ordinarily Resident in Income Tax parlance) are also considered. Banks may or may not grant an NRI Indian an education loan in India for study abroad.
Age Limit
Most banks require applicants to be more than 18. Some banks like ICICI have an upper threshold of 35 years old. Individuals over the age of 35 who want to pursue a doctoral degree abroad can apply for special consideration.
Educational Qualification
Loans are offered for pursuing courses at recognized undergraduate, postgraduate, or diploma programs in India or abroad.
Academic Performance
Banks may set minimum marks requirements in previous exams (e.g., 10th, 12th, graduation).
Admission Confirmation
Proof of admission to your chosen institution is mandatory for loan disbursement. Banks mostly send the loan amount directly to the institution.
Co-applicant/Guarantor
An eligible co-applicant (parent, sibling) or guarantor with a strong financial standing may be a requirement.
When applying for an education loan for abroad studies, you’ll need to provide specific documents to the bank. Here’s a comprehensive list of the necessary paperwork:
Documents of Applicant
- ID Proof: You can use any of these - PAN card, Aadhar Card, Voter ID card, Driver’s License, Passport
- Age Proof: Same as above.
- Address Proof: Aadhar Card, Voter ID card, Driver’s License
Documents of Co-signer
- Form 16, past three years (for salaried co-signer)
- Salary Slip, past one year (for salaried co-signer)
- P/L Account, Balance Sheet, past three years (for co-signer owning business)
- Bank Statement, past three years
- Income Tax Return, past three years
Documents related to collateral
- Title Deed of house, property
- Document showing ownership of an asset (such as jewelry)
- Remember that this is a general overview. It's always best to check the specific document criteria of the bank you're interested in.
Different banks and financial institutions have different fee structures and charges. You need to understand these costs upfront.
Let’s explore some of the common fees and charges associated with education loans:
Interest Rates
This is the core expense of an education loan for study abroad. It varies based on your creditworthiness and the reputation of the degree.
Processing Fees
Banks charge a one-time fee. It is usually a percentage of the loan amount. The processing fee covers loan application processing costs. It is capped at about ₹10,000 in most banks.
Prepayment Charges
Do you want to pay off your education loan for abroad studies early? Be mindful of potential prepayment charges depending on the bank and your loan terms. Some banks don’t levy a prepayment penalty.
Late Payment Charges
Missing an EMI installment can incur late payment charges. You must pay on time to avoid late fees. Late fines also impact your credit score.
Miscellaneous Charges
Depending on the bank, there might be additional fees. These are for document retrieval or loan statement requests.
Nearly every bank in India offers education loans for abroad studies. This is a concise list:
- State Bank of India
- Punjab National Bank
- Bank of Baroda
- ICICI Bank
- Bank of India
- Bank of Maharashtra
- Central Bank of India
- Axis Bank
- Kotak Mahindra Bank
- Canara Bank
- Mpower Finance (NBFC)
- Prodigy Finance (NBFC)
Here's a breakdown of the steps involved in applying for a education loan for abroad studies:
Step 1: Research and Eligibility Check
Explore different banks and NBFCs offering education loans for abroad studies. Compare their interest rates, loan amounts, processing fees, and repayment terms.
Ensure you meet the eligibility criteria set by your preferred bank.
Step 2: Application Process
Collect the required documents. these usually include:
Application form
Photographs
Mark sheets of previous exams (10th, 12th, graduation)
Proof of admission
Income proof of co-applicant/guarantor (if required)
KYC documents (PAN card, Aadhaar card)
You can apply online through the lender's website or visit a branch in person.
Step 3: Loan Processing and Approval
The bank will verify your documents and assess your loan application. Upon successful verification and creditworthiness assessment, the bank will sanction your loan. You'll receive a loan agreement outlining the terms and conditions.
Step 4: Loan Disbursement
Carefully review and sign the loan agreement. Ensure you understand all the terms and conditions.
Once the agreement is signed, the bank will disburse the loan amount.
This is a lengthy process. It is preceded by you visiting numerous branches and waiting hours.
Between the stress of admission and the time factor involved this is a hassle you can do without.
Want to do it the smart way? Head right over to FundRight
Our AI-enabled lending platform does all the heavy lifting. Upload your documents and you will see your loan approved at warp speed.
What do you have to do?
Register on the FundRight platform.
Upload your documents.
You will find over 15 banks and NBFCs that grant loans.
Take advice from our experts.
Your loan will get approved in just a few days.
Find your best study abroad loan offers in just 2 days.
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Geetha Murthy – Parent
