An education loan is money borrowed from banks or other financial institutions to pay tuition fees in your country or abroad. 

With the hype of going abroad for education in India, the number of people seeking education loans has also increased. Many Indian Banks are offering Education Loans for Studying abroad. 

This article will illuminate the details of such financial institutions, eligibility criteria to get student loans, repayment time, etc. 

Getting an education loan can help you with entire tuition fees and other expenses, including living and hostel expenses, travelling expenses, examination fees, library/laboratory fees; purchase of books/equipment/instruments/uniforms; passage money for studies into India; purchase of computers/laptops considered necessary for the completion of the course. 

However, this cannot be said for all the Banks and other financial institutions offering loans. 

Things to remember while applying for education loans in India

Moratorium Period: The time is the time during which the student/applicant needs to make any repayment to the bank. The moratorium period could be as long as the course duration plus one year.

Collateral: Movable or immovable property offered to the bank as security for a loan higher than the prescribed amount. 

Loan Margin: Scarcely Bank offer the total amount. Generally, they pay up to 90% of the total amount, and the student/applicant must manage the remaining 10%.

Education Loan Providers in India

• Banks
• NDFCs (Non-Banking Financial Companies)
• Foreign Lenders

Popular Types of Education Loans

• Education Loans with Collateral (Secured Loans)
• Education Loans without Collateral: Higher Interest Rates

Eligibility Criteria

• The applicant and Co-applicant should be a citizen of India
• Applicants should fall into the age group of 16-35
• Applicants should have secure admission in graduate or postgraduate programs in India or abroad.
• Applicants need to offer collateral in some cases. 

Indian Banks Offering Education Loans for Studying Abroad: SBI Bank

State Bank of India (SBI Bank) grants generous loans to Indian Citizens for studying abroad. 

This is the feature of the SBI Student Loan Scheme offered by SBI Bank to Indian Nationals. 

• Repayment period: 15 years after course completion+  12 months of repayment holiday. You can begin to repay one year after the completion of the course. 

• Margin

• For Loans up to 4 Lakhs: No charge
• For Loans above 4 Lakhs: 5% for education in India, 15% for overseas education.

• Security

• For loans up to INR 7.5 Lakhs: Only Parent/ Guardian as co-borrower. No Collateral Security or third-party guarantee is required.
• For loans above INT 7.5 Lakhs: Alongside Parent/Guarina as Co-borrower, tangible collateral security is also required.

• EMI Generation: 

• The accrued interest during the moratorium and course period is added to the principal, and repayment is fixed in Equated Monthly Installments (EMI).
• If total interest is serviced before the commencement of repayment, EMI is fixed based on the principal amount only.

• Processing Charge: 

• No charge for loans up to INR 20 Lakhs
• Charge of “INR 10,000+ taxes” for loans of above 20 Lakhs.

Source: SBI Bank

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Indian Banks Offering Education Loans for Studying Abroad: HDFC Bank

HDFC Bank has distinct education loans for Indian Education and Abroad Education. 

Features: 

• Loan Amount: Up to INR 30 Lakhs for education in India, no upper limit for education abroad with collateral 
• Interest Rates: 8.64%

• Repayment time/ Tenure: Up to 14 years, including the moratorium period

• Collateral Options: 

• Moveable – Fixed Deposit with HDFC Bank or HL with HDFC Ltd
• Immoveable Collateral – Flat, House, Bungalow, Land (Non-Agricultural), Shop, etc.

• Charges:

• Pre-payment Charges: Nil
• No Object Certificate (NOC): Nil
• Delayed Payment Charges: @ 2 % per month of instalment ( MI/PMII)+ applicable taxes thereon  
• Origination Fees: 1.5% + Taxes of the Sanction Amount & in Non-Refundable

Indian Banks Offering Education Loans for Studying Abroad: Axis Bank

• Loan:
•  Minimum INR 50,000 to a value that can cover your tuition fees, hostel charges, costs of books etc. 
• A minimum of 40 Lakhs of unsecured loan. A secured loan has no set upper limit. 
• Interest: Look at the table below.

• Eligibility: 

• 18 years of age
• Minimum 50% marks during HSC and graduation
• Obtained admission in career-oriented courses such as Medicine, Engineering, Management, etc., either at the graduate or post-graduate level.

• Charges: 

• Prepayment Charges: Nil
• Penal Interest on delayed / overdue EMI: @24% per annum, i.e.@, 2% per month on the overdue instalments.

Indian Banks Offering Education Loans for Studying Abroad: Punjab National Bank

• Margin:

• Up to INR 4 Lakhs: NIL
• Above 4 Lakhs: 15%

• Security:

• For loans up to INR 7.5 Lakhs: Only Parent/ Guardian as co-borrower. No Collateral Security or third-party guarantee is required.
• For loans above INT 7.5 Lakhs: Alongside Parent/Guardian as Co-borrower, tangible collateral security is also required.

• Repayment time: Up to 15 years, including a moratorium period/repayment holiday. 

• Documentation Charge: Varies.

Documents Required to Apply for Education Loan for Study Abroad

General Document Checklist

• Fully Completed and Signed Application
• 2 Passport-sized photos (Applicant and Co-applicant)
• Photo ID (Applicant and Co-applicant)
• Academic Documents of Applicant/student
• Proof of Admission
• Residence Proof (Applicant and Co-applicant)
• Income Proof of Co-applicant
• Bank statements of Co-Applicant (last 6 months-12 months)
• Collateral details

Documents in Details

Technical Documents

• Title deed (all the pages to be attached)
• Copy of approved layout plan and permissions case specific
• Revenue document (Khata / Patta)
• BDA ALLOTMENT -NOC AND ALLOTMENT LETTER
• Non-Encumbrance certificate
• Possession Certificate (In case the flat is taken from a builder)
• A latest Property tax receipt
• Copy of Prior sale deeds
• Conversion certificate
• Urban clearance certificate (Case-specific)

Collateral for Education Loans in India

You can get an education loan- with or without limit- with collateral. You can use the following as collateral or immovable property. 

• Flat/ Apartment
• House
• Non-Agriculture Land
• Fixed Deposits

You might need these documents to keep collateral in the Bank. 

• Property Title Deed
• 7 / 12 extracts in case of land
• Registered Sale Agreement Along With Society Share Certificate
• Original Registration receipt for the above agreement
• Allotment Letter By Municipal Corporation / Authorized Govt. Authority Like MHADA, CIDCO, etc. Please add HUDA, DDA, JDA, GIDC etc
• Previous Chain of Sale Deed establishing title
• Latest Maintenance bill, along with Receipts issued by the builder/ society,
• The latest Property tax bill, along with receipts,
• NOC for a mortgage from society/builder,
• Approved building plan
• Encumbrance certificates as on date etc.

Non-Banking Financial Companies (NBFC) offering Education Loans

There are several NBFCs offering student loans in India. Some of the NDFCs are-

• Credila
• Part of the HDFC Bank.
• The repayment time is 10 years. 
• Interest Rates are floating.
• Avanse
• Part of the DHFL group. 
• Processing charge: 1-2% of the loan amount. 
• Covers tuition fees and other expenses. 
• Interest rates are floating.
• International Student Loan Program (ISLP)
• The minimum loan amount is USD 1,500. 
• There is no limit on the maximum amount. 
• This program is for students who want to study in the US. 
• The loan can help with tuition fees and other expenses. 
• The repayment period can be extended up to 15 years. 
• Global Student Loan Corporation (GSLC)

100,000+ students achieved their study abroad dreams with us.  Start your journey today.   Talk to an Expert