The Ultimate Guide To Educational Loans For Studying Abroad

The Ultimate Guide To Educational Loans For Studying Abroad

In one of our recent posts, we saw how to approach various means of scholarships to cover your study abroad expenses. Scholarships are few and available only to those that fit in specific criteria, mostly academic. So what about others? Well, read on, as we cover education loans for studying abroad in this ultimate guide!

Know The Basics

The term ‘loan’ is a common vocabulary, but there are a few other terms that you must understand in order to know how loans work. 

Loan Provider

This can be a bank, a financial institute, or even your university. 


These are the expenses covered by the loan. Since the loan is handed over to the student, it is up to your discretion on how to spend them – whether on tuition or on living expenses. This is unlike scholarships, which needs to be paid directly towards your tuition fees.

Maximum Amount

The maximum amount for study abroad loans differs from bank to bank, but generally covers most of the educational expenses.


This is the person who co-signs the loan. This assures the loan issuing authority that in case the student defaults, the loan is to be repaid by the co-signer.


This is an asset that you commit against the loan. It is generally a property that you/your family owns, but it can also be other movable assets. In case of a default, the bank will sell this asset and recover the outstanding amount.

Interest Rate

The rate of interest at which you pay the loan back.


The burden of repayment is on the student. Repayment generally starts after the education program is over. This is where educational loans are different than other loans in which repayment starts immediately. However, note that the interest will still be levied on the borrowed amount during the course of your studies.

Eligibility And Documents Required

Each loan provider has specific criteria, but the following minimum requirements hold for any of them.

  • Proof of identity documents – passports, age and residence proof, etc
  • Proof of admission
  • Proof of estimated financial expenses
  • Schedule of estimated financial expenses
  • Academic statements such as degree certificates and mark sheets, etc
  • Income tax statements for up to last three years
  • Proof of ownership of the collateral

The Procedure

Generally, the procedure to secure an education loan is as follows.


Visit your preferred bank/loan institute and fill in their education loan application form which may ask for your personal details, study abroad program details, amount sought, collateral details, etc.


After your application, a loan provider representative will discuss with you the terms and conditions of your loan. There are a few special clauses that need to be verified before finalizing on a loan. Here are a few of them.

  • What if I default?
  • What if I pay back the loan before time? Is there any penalty?
  • What income tax benefits do I get?

Note that you may be able to negotiate with them on lowering the interest rate or removing the prepayment penalty, if any. So give your best shot!

Document Submission

After an agreeable discussion with the bank, you may proceed with submitting your documents as required.

Background Verification

The bank generally does a background verification, which may also involve a police checkup, to verify your criminal/credit history.


Once the documents are verified and the background is checked, the bank will approve the loan. 


The actual disbursal of the loan amount will take place only after a formal approval and any other process as per the bank.
Generally, the timeline for the entire process is around 1.5 months, so you must start the process early.

Loan Providers

The following loan providers are most sought-after by Indian students seeking education loans for studying abroad.

  • State Bank of India
  • Allahabad Bank
  • Axis Bank
  • HDFC Credila
  • Punjab National Bank (PNB)
  • Bank Of Baroda
  • IDBI Bank
  • Indian Overseas Bank (IOB)
  • State Bank of Mysore
  • Avanse Financial Services
  • Syndicate Bank
  • Canara Bank

You may find further details about their education loans on their individual websites. We recommend you compare and contrast various choices to understand which would be the best option for you, given your amount sought and intended repayment duration.

Getting an education loan can take a lot of financial stress off your shoulder. So you must try to get the best deal that you can. We wish you good luck with the same!

At Beyond Consultant, we help you bring your dreams to life, by guiding in your overseas education journey. For a free consultation, please get in touch with us here.


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