A Complete Guide On How To Get Student Loans In India For Studying Abroad

Written by Pierre Noronha

Born and raised in Mumbai, Pierre Noronha thought that he was destined to be a Chartered Accountant, but all that changed when he discovered his love for writing. Taking this new found passion forward, he started working as a content writer for UniAcco.

June 28, 2020

The decision to study abroad can be a life-changing one, but it comes at a price. Literally! With education costs reaching an all-time, many able students find it difficult to pursue further education, especially abroad. The only option for students who can’t bootstrap their education is an education loan. In this blog, we will cover each and every detail related to securing a loan in India for studying abroad. 

Eligibility Of Getting An Education Loan In India

Checking whether or not you’re eligible for an education loan is the first step. The following is the usual criteria followed by banks to determine if an applicant is eligible for the loan or not –

  • The applicant should be a citizen of India.
  • The applicant must have a good academic background.
  • The applicant must have attained the legal age of 18 else his/her parents will have to take the loan.
  • The desired course which the applicant is going to study must be a professional or technical one, as banks give preference to job oriented courses.
  • The applicant must have secured admission to a recognized foreign institution/college/university.

Required documents For Getting An Education Loan In India

It is always advisable to keep handy the required list of documents before applying for an education loan. This practice not only saves time but also gives you the opportunity to arrange for documents you currently don’t have. Here’s the list of such documents –

  • Filled application form.
  •  Photographs: Passport size photographs of the applicant and the co-applicant.
  •  Photo ID: Photo ID of the applicant and the co-applicant. It can be a Voter ID card, PAN card, driving license, Passport or Aadhar Card.
  •  Residence proof: Resident proof of the applicant and the co-applicant.
  •  Academic documents:
  1. o Mark sheet and certificates of the applicant.
  2. o Mark sheet (Score Report) of GRE, IELTS, GMAT, TOEFL, etc. whichever is applicable.
  • Admission proof: Admission letter shared by the college or university.
  • Bank statements: Last six months bank statements of the co-applicant.
  • Income proof: Income proof of the co-applicant.
  • In case of collateral (immovable property), it can be a flat or non-agriculture land, the following documents are required:
  1. o Property title deed
  2. o Building approved plan
  3. o NOC for a mortgage from builder or society

Helpful information

Things to remember while taking an education loan –

Loan Margin – Normally, banks do not cover the whole cost of education. A majority of public sector banks issue loans for 90% of the total amount. The remaining 10% must be borne by applicants themselves. 

Moratorium period – A moratorium period basically means the duration when the borrower does not make any repayment to the bank. This period varies from bank to bank, so make sure you’re aware of the moratorium period given to you by the bank.

Exchange Rate fluctuations – Exchange rates can be volatile, so make sure you always calculate the amount which you will receive at the time of disbursement. 

Best banks that provide education loans for international studies –

HDFC Bank – The maximum loan amount offered by the bank is INR 20 lakhs. In order to avoid the last-minute rush, this bank offers international study loans even before the student has secured admission at the university.

Axis Bank – The salient feature of Axis Bank’s education loans are their competitive interest rates. The bank offers a maximum of INR 20 lakhs and covers different costs like tuition, accommodation, and books.

State Bank of India – This bank offers the highest loan amount at INR 30 lakhs with a loan margin of 15%. The loan repayment tenure can be anywhere between 1 year to 15 years. 

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