Education Loan for Overseas Studies from India: Your Go-to Guide

The average fees for all these expenses differ depending on the course, university, and country. However, they almost always cost lakhs of rupees. All expenses combined could range from INR 15 lakhs to 1 crore per annum. But don’t fret, friend! Education loans can be your magic carpet to that dream university abroad. Thanks to different education loans for studying abroad, you can confidently go after your dreams. You’ve got the green light to make those dreams a reality! While securing a loan might sound like a tedious process. However, this blog will take you through the requirements and simplify your application process.

Types of Education Loans for Indian Students Applying Abroad

A. Secured Education Loan for Overseas Studies:

This loan is a type of loan where the borrower provides collateral, such as property or assets, as security against the borrowed amount. This collateral reduces the lender’s risk, resulting in lower interest rates and higher loan amounts compared to unsecured loans. It helps cover various expenses for studying abroad, such as tuition, living costs, and travel.

Learn more about how to avail a secured education loan for your abroad studies. 

B. Unsecured Education Loan for Overseas Studies:

An unsecured education loan for studying abroad doesn’t require collateral as security. It’s based on the borrower’s creditworthiness and income. It covers educational expenses without needing pledged assets but typically offers lower loan amounts and higher interest rates than secured loans.

C. No Collateral No Cosigner Loan for Overseas Studies:

A “No Collateral, No Cosigner Loan” for overseas studies enables students to fund their education abroad without requiring collateral or a cosigner. It’s beneficial for international students who may lack these resources. Terms vary, so careful consideration and exploration of other financial aid options are advised.

D. Secured vs. Unsecured Education vs. No Collateral, No Cosigner Loans:

<td style=“background-color:

fff;">No collateral required, making it more accessible for students without substantial assets<td style=“background-color:

fff;">No need for collateral or a cosigner, making it accessible for students without significant assets.

<td style=“background-color:

fff;">Typically lower interest rates due to collateral, reducing overall borrowing costs<td style=“background-color:

fff;">Higher interest rates compared to secured loans due to the absence of collateral<td style=“background-color:

fff;">Rates may vary, but these loans often offer competitive rates compared to traditional loans.

<td style=“background-color:

fff;">Easier approval due to the presence of collateral, suitable for those with limited credit history<td style=“background-color:

fff;">Approval may be more stringent and dependent on credit history, income, and co-signers<td style=“background-color:

fff;">Typically has a simplified approval process, making it easier for students to secure funding.

<td style=“background-color:

fff;">Flexible repayment terms and longer periods, easing post-graduation financial burden<td style=“background-color:

fff;">May come with less flexible repayment options and shorter terms, potentially causing higher immediate repayment stress<td style=“background-color:

fff;">Flexible repayment options are often available, accommodating the financial circumstances of students.

<td style=“background-color:

fff;">Can assist in building a positive credit history if payments are managed responsibly<td style=“background-color:

fff;">Helps in building credit but might have a lesser impact due to higher interest rates and smaller loan amounts<td style=“background-color:

fff;">Allows students to build a credit history without a cosigner, fostering financial independence.

Benefits	Secured education loan for overseas studies	Unsecured education loan for overseas studies	No Collateral no Cosigner Loan*
Collateral Requirement	fff;">Requires collateral, such as property or assets, reducing risk for the lender
Interest Rates
Approval Process
Repayment Terms
Credit Building

*No Collateral no Cosigner Loans are only available for specific universities and countries. Also, note that good GRE/GMAT scores are a must when you’re applying for this loan.

Study Abroad Education Loan: Eligibility, Documents Required and Application Process

1. Proof of finances and income details to prove your repayment capability
2. The co-borrower(s) must have a bank account in any bank in India with cheque writing facilities.
3. Admission letter from a recognised university or college abroad

B. Education Loan Documents Required

 Here’s a list of documents required to apply for a study abroad education loan:

1. 1. Application form for the loan
2. 2. Standardised test scores & academic transcripts
3. 3. Acceptance letter from the international school/institute
4. 4. KYC documents - Aadhaar Card & PAN card (yours and your parents/co-applicants)
5. 5. Birth certificate
6. 6. Residential Proof (including utility bills, rental agreement, electricity bills over the previous three months, etc.)
7. 7. Income proof of family & bank statements for the last six months (including income tax returns and property proof)

Some additional documents are required if you are applying for an educational loan to study abroad without collateral:

1. 8.University acceptance form with tuition fees
2. 9. KYC of the co-applicant
3. 10. Address proof along with electricity bill
4. 11. Applicant’s savings account details
5. 12. Form 16 and salary slip (applicable if co-applicant is a salaried person)

C. Application Process for Education Loan

1. Online application for student loans to study abroad:

• To submit an online application from the desired source, attach the required paperwork, and submit it.
• After thoroughly checking the submitted paperwork, the lender will contact applicants and proceed with the loan application.
• Niyo Global has partners who can help you get the best education loan to study abroad, at the best interest rates, instead of going to all banks separately. You just have to fill out one digital application, and they

Finance your dreams with ease. Get a study abroad education loan and our zero forex card.

• Applicants can acquire a loan by visiting the local branch and submitting the required paperwork.
• A representative will provide extensive insight on the reviewed paperwork submitted, after which the applicant will be asked to fill out the application in person if they agree with the terms.
• The applicant can also contact the lender, express interest, and discuss terms before applying.

It is best to have all required paperwork up-to-date and organised for a smooth loan application process.

D. Banks Offering Education Loans 2023

Prominent banks in India that offer education loan for overseas studies include -

<td style=“background-color:

fff;">0.5 - 1% of loan amount

<td style=“background-color:

fff;">10.95% onwards<td style=“background-color:

fff;">0.5% - 1% of the loan amount + GST

<td style=“background-color:

fff;">10.15% - 11.15%<td style=“background-color:

fff;">INR 10,000 + GST (Non-refundable)

<td style=“background-color:

fff;">9.7% - 11.15%<td style=“background-color:

fff;">1.00% of loan amount (maximum Rs. 10,000)

<td style=“background-color:

fff;">9.25% - 9.75%<td style=“background-color:

fff;">An initial fee of INR 5,000 is required from students, and it will be reimbursed if the student secures the loan within three months from the sanction date. Otherwise, no processing fees apply.

Bank	Interest Rate (p.a.)	Processing Fees
HDFC Credila Education Loan	fff;">10.25% - 12.75%
ICICI Bank
State Bank of India (SBI)
Bank of Baroda
Union Bank of India

Foreign education can be expensive even after excluding your living expenses, which is why student loans are issued to finance your higher studies. There are several types of education loans, and payments for each can be deferred depending on the lender. The basic types include private and federal educational loans by the government, although the latter typically charge higher rates despite following traditional lending methods.

1. Reduces Strain on Family Expenses and Savings: A student loan eliminates the need to liquidate investments in fixed deposits, mutual funds, or bonds. Education loans by the government, such as the Pradhan Mantri Vidya Lakshmi Karyakram_,_may help students get other financial benefits, such as lower interest rates.

2. Freedom to Pay Post-Education – EMIs, apart from using a repayment schedule while planning family finances, are an easily accessible method.

3. Covers a wide range of expenses besides tuition fees: Yet another benefit of an education loan for overseas studies is that it provides financial backing not only for tuition fees but also covers living and travel expenses, other study and resource material costs, and additionally caters to costs related to academic pursuits.

4. Repayment Terms Made Easy: Flexible collateral and co-borrower terms are easy and stress-free.

5. Encourages Financial Independence: Encourages independent financial habits by allowing study abroad applicants to repay loans on their own, creates environments to start building their credit history, and enables cheaper loans in the future. 

6. Building Credit History: Another underestimated benefit of education loans is that, when managed responsibly, they contribute significantly to building a strong credit history. Timely payments and consistent handling of these loans demonstrate financial reliability, positively impacting one’s credit score. This responsible behaviour lays the groundwork for future financial opportunities, reflecting your ability to manage substantial long-term commitments. 

7. Facilitating Financial Discipline: Creates an extra layer of protection for the financial profile, helping prevent identity theft and fraud. A more robust credit score indicates low risk for you as a candidate, showing lenders that you might be eligible for free services or bigger loans.

Learn more about the benefits of studying abroad for Indians!

Frequently Asked Questions