How to Apply for an Education Loan to Study Abroad


Subhashri Roy
Updated on Jun 30, 2023 10:10 PM IST

For many Indian students, going abroad for their studies has become a dream, and study-abroad loans are the key to making this goal come true. Learn the ropes of the loan application procedure to open doors for overseas study. Learn about the procedures, prerequisites, and tools that may make studying abroad a reality and open doors to a world of opportunities.

How to Apply for an Education Loan to Study Abroad

How to Apply for an Education Loan to Study Abroad: Studying abroad might sometimes seem like a distant goal due to rising costs for higher education, travel, and living expenditures. Study abroad loans have come to be seen as the most effective catalyst for making these goals come true due to the skyrocketing expenses of overseas education. These loans act as the vital link that connects aspirant brains to esteemed colleges throughout the world.

The days when a lack of funds prevented people from seeking knowledge abroad are long gone. For Indian students, study abroad loans have turned into a lifeline, providing them with the much-needed financial assistance to start their academic journey. It is impossible to emphasise the importance of these loans since they give students access to top-notch education, exposure to a variety of cultures, and a lifetime network of contacts abroad.

There are several choices for study abroad loans available today that are geared exclusively toward Indian students. Many study abroad loans with appealing interest rates, flexible repayment choices, and simple application processes are offered by banks, financial institutions, and government programmes. These loans frequently pay for tuition, housing costs, travel expenses, and even living expenses, allowing students to concentrate on their studies and completely immerse themselves in the global academic community.

Let us now find out how to apply for an education loan to study abroad in detail along with the top Indian education loan providers in 2023.

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What is an Education Loan?

An education loan is an amount of money borrowed from a bank or other financial agencies to cover your cost of post-secondary or higher education. It intends to finance the cost of books, supplies, tuition fees as well as living expenses.

Unlike a personal loan, an education loan offers a lower interest rate and if you are qualified for a government-subsidized loan, you will be required to pay even lower interest rates. Education loans usually offer a longer repayment tenure of up to 20 years and payments are often deferred while the borrower is in college. Sometimes, the borrower is offered an additional six-month period after earning a degree, which is known as a “grace period”.

How to Get an Education Loan for Studying Abroad?

Confused about applying for an education loan to study abroad? Given below is the process explained in detail:


  • Step 1: Explore your options and find out what financial gaps you want to fill through the loan. This would require you to figure out how much loan you require.
  • Step 2: Research and shortlist the banks that offer education loans for studying abroad.
  • Step 3: Check the eligibility criteria for each of those education loans and find out if the bank recognises the course you are applying for.
  • Step 4: Compare the education loans offered by different banks for studying abroad and pick one that meets your requirements.
  • Step 5: Before applying for an education loan, always read the terms and conditions of the loan thoroughly.



  • Step 8: Wait for your loan application to be approved. 
  • Step 9: Once your loan is approved, the bank will provide you with a loan document including the various elements of the loan.
  • Step 10: Sign the loan agreement, after which the bank will pay the required amount in instalments or as asked by the university.

Confused About Which Education Loan to Apply for?

Top Indian Education Loan Providers for Studying Abroad

Given below is the list of the top education loan providers in India for studying abroad:

Name of Bank


State Bank of India (SBI)

Eligible courses: Full-time graduate/post-graduate degree/diploma/certificate/doctorate course in any disciplines

Eligible countries: USA, UK, Singapore, Japan, Canada, Australia, New Zealand, Hong Kong, and Europe [Austria, Belgium, Finland, France, Germany, Sweden, Switzerland, Czech Republic, Denmark, Estonia, Greece, Ireland, Poland, Portugal, Italy, the Netherlands, Norway, Russia, Spain, UK

Simple Interest will be charged during the Course Period + Moratorium Period

Axis Bank 


  • Indian citizen

  • At least 50% in HSC or Graduation

  • Obtained admission to career-oriented courses like medicine, engineering, management, etc at the graduate/post-graduate level.

  • Obtained admission through an entrance test or merit-based selection process

No prepayment charges

No pre-closure charges

Repo rate-linked interest rates


Eligible courses: MS, MBA, Executive Management Courses and all other courses (on case-to-case basis)

Eligible countries: 35+ countries

Coverage: 100% of tuition fees determined by the university along with other expenses

Loan repayment up to 14 Years including the Moratorium Period

Punjab National Bank (PNB)


  • Should be applying for any job-oriented professional/technical graduation course/MCA/MBA/MS/diploma/degree courses like pilot training, shipping, aeronautical, etc.

  • Should have obtained admission to only PNB-approved university

  • Obtained admission through an entrance test or merit-based selection process

  • Should be an Indian

Scholarship/ assistantship be included in the margin

Coverage: fees, travel expenses, life insurance premium, books, computer and other expenses

Bank of Baroda


  • Should be applying for MBA, MS, MCA and other job-oriented courses

  • Should have obtained admission to only BoB-approved university

  • Obtained admission through an entrance test or merit-based selection process

  • Should be an Indian

Coverage: Tuition fees, travel expenses, life insurance premium, books, computer and other expenses

Top Education Loan Schemes for Studying Abroad in 2022 - A Comparison

Before applying for a study abroad loan, go through the details mentioned in the table below and compare the schemes offered by different banks in 2023:


Loan Amount

Processing Fees

Interest Rate (p.a)


Loan Amount: INR 20 Lakhs

INR 10,000 per application


Central Bank of India

Maximum Loan Amount: INR 20 Lakhs

MCLR + 2%


Indian Bank

Loan Amount: 20 Lakhs

Maximum Loan Amount: No Cap



Union Bank of India 

Maximum Loan Amount: 25 Lakhs




Maximum Loan Amount: INR 20 Lakhs 

1% of loan amount

7.15% onwards

Bank of Baroda

Loan Amount: INR 20 Lakh

1% of loan amount up to INR 10,000



Minimum Loan Amount: Above INR 7.50 Lakhs

Maximum Loan Amount: INR 1.5 Cr

INR 10,000 per application


Canara Bank 

Maximum Loan Amount: 20 Lakhs



Axis Bank

Minimum Loan Amount: INR 50,000

Maximum Loan Amount: INR 75 Lakhs

0 to INR 15,000 + tax

13.70% to 15.20%


Minimum Loan Amount: INR 2 Lakhs

No upper limit

Up to 1.5% of loan amount + tax

9.40% to 13.34%


Maximum Loan Amount: INR 1 crore


9.50% onwards

Note: Details mentioned here are subject to change.

How to Ensure the Education Loan is Sanctioned

To maximise your chances to get your study abroad education loan sanctioned or approved, here are a few tips:

Check the University’s and Lender’s Requirements

Many lenders have requirements pertaining to which universities and degree programs are eligible for the loan. While some may provide loans to a specific list of universities, some might not be limited to a location, university or degree programs. However, every lender would have a specific list of study destinations.

You must make sure to check the university’s requirements as well and apply to only those universities and programs that the lenders approve of. Many universities share a list of lenders or banks that have supported former students.

Have a Repayment Plan

It is extremely important that you have a financial plan to increase your chances of getting your education loan approved. Some lenders need borrowers to pay interest-only or partial-interest payout while they are still enrolled in school. Making arrangements for this and looking for ways to pay them time will prevent the interest from capitalising. Further, if you choose a shorter repayment period, you have a better chance of getting the loan approved.

You, as an international student, will get a number of opportunities to earn some extra money while in college, especially in countries like the US, UK, Canada, and Australia, among others, where work rights are flexible. These may include on-campus or off-campus part-time employment, scholarships and internships. You may also bridge the remaining cost gap (if any) through personal/family savings.

Have a Well-Thought Career Plan

Any lender would want to have an idea about how you are planning to pay off the loan. It is because of this that many banks offer education loans to applicants enrolled in programs that are more likely to offer high-earning careers (for example - MBA, engineering).

Lenders want to make sure that the borrower would end up with a lucrative career after graduation, which could convince the lender that offering an education loan would be worth the risk. In case you already have a history of employment, it is even better as it will show the bank that you have a higher chance of finding employment upon graduation.

Banks vs NBFCs for Study Abroad Education Loan

Although banks have been the go-to option for students requiring education loans to study abroad, non-banking finance companies (NBFCs) have also emerged as a great option to borrow a loan.

Banks are usually rigid with regard to the course the student is applying for, while NBFCs approve loans for almost all courses. In addition, NBFCs cover most of the common expenses including tuition fees, transportation, books, security deposits, and more. Let us now look at the differences between banks and NBFCs when it comes to education loans to study abroad:

Point of Difference



Loan Coverage 

Tuition fees, travel expenses, lodging fees, costs of books, library fees, travel expenses, caution deposit, etc. 

100% of tuition fees, lab fees, travel expenses, exam fees, accommodation costs, caution deposit, cost of books, etc.


Has a definite list of approved universities and categories of courses. 

Courses can be at postgraduate, undergraduate, or diploma levels, preferably in the non-vocational stream. 

Many nationalised banks also offer education loans for vocational courses

Comparatively more flexible on the type of courses 

Processing Time

Private banks approve loans faster than public sector banks.

Faster in approving education loans irrespective of the course


Stricter rules and regulations

Simpler terms irrespective of the course chosen by the borrower

Government Subsidy

Offer interest rate subsidies to those from the weaker sections of society (applicable during the moratorium period)

No interest rate subsidies

Loan Amount

There is an upper limit 

Ranges between Rs. 20L and Rs. 30L, based on the course and university. However, this may vary from one bank to another

No cap

Security Collateral

Require security collateral

For loans below Rs. 4L, no security is required.

For loans between Rs. 4L-Rs.7.5L, a third-party guarantee is required.


Based on the loan amount and credit history of the borrower

Interest Rates

Uniformity is linked to the bank’s marginal cost of funds based on the lending rate (MCLR)

Set their own interest rates based on the market competition and cost of operations; higher interest rate


Can be done within seven years

Interest repayment can begin during the moratorium period

Principal repayment can be done as monthly instalments

Can be done within seven years

Moratorium Period

Ranging from six months to up to one year

Six months

Documents Required

List of Documents

ID Proofs

Residence Proofs

Signature Proofs

Concessions for Women

Might be available


Pre-closure charges


Might levy pre-closure charges based on the reason for closure, the profile of the borrower and tenure left

It has never been simpler to apply for an education loan to study abroad in this era of infinite possibilities. But before making a choice, students must do extensive study, weigh their alternatives, and carefully consider the terms and circumstances. Study abroad loans are the foundation that enables Indian students to realise their full potential as they continue to foster their ambitions of studying abroad. These financial aids are more than simply figures on a balance sheet; they stand as the entrance to a world of learning, development, and opportunities on a worldwide scale. Indian students may expand their wings and fly to new heights with the correct loan in hand, leaving their imprint on the international stage and achieving their dream of receiving a top-notch and quality education.

For further information about study abroad loans in India, please write to us at Stay tuned! 

Have Further Doubts About Study Abroad Loans?


Can I get a student loan to study abroad as an Indian student?

Yes, Indian students can apply for student loans to study in other countries. Several banks and financial institutions in India provide education loans tailored exclusively for students seeking higher education abroad. These loans often have strict eligibility requirements, such as acceptance into a recognised educational institution and the availability of a co-applicant or collateral. It is best to check with several lenders to get the best possibilities.

What are the requirements for an education loan to study abroad?

Admission letters from a recognised educational institution, evidence of academic qualifications, a detailed course structure and cost breakdown, proof of funds for any additional expenses, collateral or guarantor, a good credit history, and a comprehensive study plan are typically required for an education loan to study abroad. Requirements may differ based on the loan provider and country of study, therefore it's best to check with individual financial institutions for more information.

Which bank is best for education loans abroad in India?

Several banks in India provide education loans for students studying abroad. State Bank of India (SBI), HDFC Bank, Axis Bank, ICICI Bank, and Punjab National Bank (PNB) are other common options. The "best" bank for student loans overseas, on the other hand, might vary based on aspects including interest rates, repayment alternatives, customer service, and eligibility criteria. It is advised that you evaluate the products of several banks and select the one that best meets your needs and preferences.

Can I get a 100% loan to study abroad?

Obtaining a 100% loan to study abroad is typically difficult. Most financial institutions provide school loans that pay a portion of total expenditures up to a specified level. In rare circumstances, though, some banks or scholarship programmes may grant complete support to excellent individuals. To complement your financial needs, it is important to investigate and explore alternative financing possibilities, such as scholarships, grants, and part-time work.    

Can I get 20 lakhs education loan to study abroad without collateral?

It may be tough to obtain a 20 lakh education loan to study overseas without collateral. For larger loan sums, many banks need collateral or a guarantor. However, certain banks may provide unsecured loans up to a specified amount without requiring collateral. It is essential to check with other banks and investigate their loan options, as eligibility requirements and loan conditions might differ.

What is the maximum loan amount for study abroad for Indian students?

The maximum study abroad loan amount varies based on the bank or financial organisation granting the loan. The loan amount can often range from INR 20 lakhs to INR 1 crore or more, depending on criteria such as the course being followed, the country of study, and the applicant's and co-applicant's repayment capabilities. It is recommended that you check with several banks and loan-granting institutions to establish their unique loan restrictions.

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