Nowadays, with the increasing responsibilities and mounting expenses, funding education has become a crucial task for all the parents as they find it difficult to self-finance their children’s education and support their dream of studying abroad. With the plethora of options available in the market to fund your education due to the huge demand to cover education loans of students who want to pursue higher education overseas, it is very important to understand the basic fundamentals of student loans for studying abroad.

As half knowledge on the subject is dangerous, you should do prior research of the market before making a decision and then choose the best option to fund your education for studying . This article will cover A-Z guide to student loans and will give you the nitty-gritty of student loans for studying abroad. 

A Guide to student loans eligibility to apply for an educational loan

With malleable terms and conditions most of the Indian banks offer loans to meritorious students at a low interest rate who are unable to fund their education and help students to finance their study abroad.

Some of the education loan eligibility criteria to apply for an educational loan are as follows:

  • The applicant applying for an education loan must be a resident of India. 
  • The applicant must have the letter of admission from a recognized university in India or abroad.
  • The age of the applicant must be between 18-35 years while applying for a loan. 
  • The applicant must have a good/decent academic record till date.
  • The applicant must have a secured admission from a deemed university or accredited educational institutions.

Documents required for student loans while applying for an education loan 

Mandatory Documents
(of the applicant and the co-applicant)
  • Application form duly filled and signed in by the applicant
  • 2 passport size photographs 
  • Statement of course expenses
  • Offer letter or confirmation of admission letter
  • Aadhar and PAN card of the applicant
  • Xth/XIIth/any other higher education

Academic document
(of the applicant)
  • Educational marksheet and certificate (Xth/XIIth/Degree/PG)
  • Proof of admission of the course
  • Fee structure
  • IELTS/GMAT/GRE Score card
  • University ranking print out form

Proof of identity
(of the applicant and the co-applicant)
  • Voter ID
  • PAN ID
  • Passport
  • Driving License
  • Aadhar Card

Proof of residence
(of the applicant and the co-applicant)
  • Voter ID Card
  • Passport
  • Electricity Bill
  • Telephone Bill
  • Ration Card
  • Bank account statement
  • Aadhar

Employment or business proof of co-applicant or guarantor
  • 3 months salary slips (if salaried)
  • 6 months Bank statement (if salaried)
  • Form 16 of last 2 years
  • Employer ID card
  • 3 years ITR (if self-employed)
  • 6 month Bank statement (if self-employed)
  • Business proof (if self-employed)

Other documents
  • Letter stating that left over expenses, apart from the loan amount will be borne by the co-applicant
  • Cheque or receipt stating the payment of the processing fee
  • Other cheques for Lawyer and evaluator fees (if your legal and valuation process is done by the bank itself)
  • Property collateral owner’s affidavit (on Rs 20 or 100 stamp paper)

Additional documents (if applicable)
  • Proforma invoice for travel or Laptop etc if asking for it
  • Receipts of advance payments made if any
  • All loan account statements (1 year if any pending loans)
  • Gap certificate if the student has a break or failure in the study
  • Letter explaining the reason for no ITR of co-applicant if applicable

Legal documentation (in case of collateral)
  • Property Title deed
  • Registered sale agreement/ Gift Deed/ Will
  • Original registration receipt for the above agreement
  • Allotment letter by Municipal Corporation/ Authorized Govt. Authority like MHADA, CIDCO, HUDA, DDA, JDA, GIDC, etc (only if applicable)
  • 30 years link document or previous chain of sale deed establishing title or EC is required
  • Latest property tax bill and latest electricity bill bearing the same address
  • Copy of municipality approved building plan or plot layout

Other important documents (in case of collateral)
  • If joint property is divided into two, clear segregation report is required
  • If a huge land was registered and later cut into plots, then mother land registration is required
  • If property value or loan sought is more than 1 cr, two legal and two valuation reports are required

Legal documents required for Gift or Will properties
  • Gift deed and Will should have been registered
  • The property should be registered on New owner’s name
  • Two legal reports required in such cases
  • For will properties, Death certificate of the person who wrote the will is required
    (Any Legal Heir Certificate/ Succession Certificate/ Registered Family Tree is required)

Note: As per the bank laid norms, documents may differ from bank to bank as per the requirements of the applicant and the co-applicant. You can get in touch with our financial experts of WeMakeScholars who will assist you on all the required details for an educational loan. 

Top education loan providers in India for studying abroad

There are various alternatives available in the market where multiple education loan providers are willing to lend loans to students for study abroad.

1. State Bank of India

Interest Rate

8.30% for females
8.80% for males

Min Loan Amount

20 Lakhs

Maximum Loan Amount

1.5 Cr

Tenure of Repayment

 Upto 15 years

Processing Fee

10K + 1800 GST
Approx 10K for Legal and valuation

2. Bank of Baroda

Interest Rate

Prime Universities
7.75% for Females
8.25% for Males

Non-Prime Universities
8.50% for Females
9.0% for Males

Min Loan Amount

10Lakh

Maximum Loan Amount

Prime: Upto 80 Lakhs
Non-Prime: Upto 60 Lakhs

Tenure of Repayment

Upto 15 years

Processing Fee

10K + 1800 GST (10K refundable)

Approx 10K for Legal and valuation

3. Bank of India

Interest Rate

Upto Rs 7.5 Lacs- 10.35 %
Above 7.5 Lacs -9.85 %  

Tenure of Repayment

Upto 15 Years

Processing Fee

No processing charge for study in India
Processing charge Rs 5000 study abroad (Excluding service tax)

4. Bank of Maharashtra

Interest Rate

Upto Rs 7.5 Lacs-8.90 %
Above 7.5 Lacs - 8.55 %

Maximum Loan Amount

Upto 10 Lacs- In India
Upto 20 Lacs- In Abroad

Tenure of Repayment

Maximum 7 years after the commencement of Repayment

5. Canara Bank

Interest Rate

Upto Rs 7.5 Lacs - 10.70%
Above 7.5 Lacs - 10.50 %

Maximum Loan Amount

Upto 10 Lacs- In India
Upto 20 Lacs- In Abroad

Tenure of Repayment

Maximum 15 years after the commencement of Repayment

6. Central Bank of India

Interest Rate

9.00% for males
8.50% for females

Maximum Loan Amount

Upto 10 Lacs- In India
Upto 20 Lacs- In Abroad

Tenure of Repayment

Maximum 15 years after the commencement of Repayment

7. Indian Overseas Bank

Interest Rate

Upto Rs 7.5 Lacs - 10.65%
Above 7.5 Lacs - 11.65 %

Maximum Loan Amount

Upto 30 Lacs- In India
Upto 40 Lacs- In Abroad

Tenure of Repayment

Maximum 7 years after the commencement of Repayment

8. Punjab National Bank of India

Interest Rate

From 4 lakhs to 7.5 lakhs-
11.40% for males
10.90% for females

Above 7.5 lakhs-
11.15% for males
10.65% for females

Maximum Loan Amount

Upto 10 Lacs- In India
Upto 20 Lacs- In Abroad

Tenure of Repayment

Maximum 15 years after the commencement of Repayment

9. Union Bank of India

Interest Rate

Upto Rs 4 Lacs - 11.85%
From Rs 4 Lacs to 7.5 Lacs- 11.50%
Above 7.5 Lacs - 10.60 %

Maximum Loan Amount

Upto 20 Lacs- In India
Upto 30 Lacs- In Abroad

 Tenure of Repayment

Maximum 15 years after the commencement of Repayment

10. UCO Bank 

Interest Rate

Upto Rs 7.5 Lacs- 9.10 %
Above 7.5 Lacs - 9.50 %

Maximum Loan Amount

Upto 10 Lacs- In India
Upto 20 Lacs- In Abroad

Tenure of Repayment

Maximum 15 years after the commencement of Repayment

11. ICICI Bank

Interest Rate

Secured - 10.50%
Unsecured- 10.75%

Maximum Loan Amount

Upto 50 Lacs- Domestic Courses
Upto 1 Cr- International Courses

Tenure of Repayment

Upto 8/10 years for UG Course
Upto 10/12 years for PG Course

12. Axis Bank

Interest Rate

Upto 4 Lacs- 15.20%
From 4 to 7.5 Lacs- 14.70%
Above 7.5 Lacs- 13.70%

Maximum Loan Amount

Upto 75 Lacs

Tenure of Repayment

Maximum 7 years after the commencement of Repayment

13. HDFC Bank

Interest Rate

Upto 20 Lacs- 9.25%- 13.42%
Above 20 Lacs- 9.25%-13.52%

Maximum Loan Amount

Upto 20 Lacs- In India
No upper Limit- In Abroad

Tenure of Repayment

Maximum 7 years after the commencement of Repayment

Note: All Government Banks offer 0.50% concession in the interest of girls.

Points to keep in mind while applying for an education loan in India for Study abroad

1. Check your eligibility before applying for a loan- Before applying for an education loan in India for studying abroad, check your education loan eligibility criteria in advance and then proceed ahead. 

2. Calculate the loan amount- Determine your loan amount you need to finance your education like college fees, examination, laboratory, travel expenses, cost of books, laptop, library fee and other equipment. 
In a few cases, students forget to calculate their moratorium period while calculating EMI payments which will eventually affect the monthly payments you have to pay to your lenders. To avoid doing this, use an EMI loan calculator to calculate your monthly EMI accurately. 

3. Apply for an education loan to avoid hassle at the last moment- After confirmation of admission in the college, most colleges do not accede adequate time for fee payment. The applicant has to process the sufficient funds at the last minute. To avoid hassle at the last minute, one should apply for an education loan in advance. Our team at WeMakeScholars will help you in the entire loan process and get your loan sanctioned in 15-20 days.

4. Compare other loan lenders before taking an education loan- Different banks offer different interest rates with satisfactory repayment policies. Well-versed research of the market will enable you to explore various options and help you select the top lender to fund your education abroad. 

5. Prepare all the required documents-  Check all the documents you will need to avail an education loan. To avoid last-minute hassle arrange all the documents like collateral related documents, legal documents, academic related documents etc. 

6. Plan your EMI’s and repayment tenure- Education loan repayment in India for study abroad starts after the moratorium period (repayment holiday). So, keeping future perspectives in mind, plan your repayment tenure and EMI’s accordingly.

Conclusion

This guide to student loans will help you navigate through all the required details. It is advised that students do their own market research before applying for an education loan and strictly meet the eligibility criteria as banks do not lend loans incase of lack of documents.  At WeMakeScholars our team understands the requirements of the banks and also values student’s time and efforts, because of which we help students with abroad education loans with 14+ banks. We will help you get the best education loan lender according to your profile. 

Note: WeMakeScholars is an organization funded and supported by the Government of India and is associated with 10+ public/private banks/ NBFCs in India. We have helped millions of students by connecting them with the best education loan lenders across India. We have a dedicated financial team to assist you with any education loan related query. As we are Government funded, there is NO FEE charged for the services offered.