Education Loan For Study Abroad – Eligibility, Amount & More

Studying abroad can transform your life! Immersing you in new cultures, cutting-edge research, and global networks. But the price tag often feels daunting. From hefty tuition to rent, travel, and even everyday essentials, the expenses stack up quickly. Education loans step in here, giving you the financial cushion to chase your academic ambitions without compromise.

In this blog, we cover everything you need to know about education loans for abroad studies. Learn about education loan eligibility for international students, required documents for abroad education admissions, Best lenders or banks for abroad education loan, government education loans for abroad studies, and how upGrad can guide you through the entire process. Let’s get you one step closer to your dream university.

Top Platforms & Loan Providers for Studying Abroad

A good education loan for studying abroad requires a lot of research and attention to detail. But, it is hard to spare hours on different banking platforms with such a hectic study schedule. On that account, we made a handpicked list of the best financial platforms to get an education loan for study abroad.

Public Sector Banks:

Public sector banks in India provide government-scheme education loans. They provide low-interest rate loans for students for international education, however, they often provide benefits like interest subsidies for females and flexible repayment options. Such loans cover expenses like - Tuition fees, accommodation, travel expenses, books, and other related costs. 

Private Sector Banks:

Private sector banks provide education loans to study abroad with faster processing times. They often have tie-ups with international institutions, thus, hassle-free processing of the global student loan. Such institution covers - Tuition fees, living expenses, travel, and other education-related expenses. 

NBFCs (Non-Banking Financial Companies):

NBFCs (Non-Banking Financial Companies) offer agile, no-collateral international student loans in India for a variety of courses. NBFC covers degrees to vocational programs at premier and niche institutions. Leaders who provide no-collateral abroad education loans deliver faster approvals, personalized credit assessments, top-up loans, and flexible moratoriums. Such dedicated support makes NBFCs a convenient option for financing international education for Indian students.

Digital Aggregator Platforms:

Digital aggregators simplify the education loan for study abroad application process by comparing offers from multiple lenders, helping students find the best deals. When choosing an education loan provider, consider factors like interest rates, loan amounts, repayment terms, and what expenses are covered. Always compare multiple options to find the best fit for your educational needs. 

We at upGrad Study Abroad not only inform students about the best education loan providers in the market, but we also offer courses like IELTS, GMAT, SAT, and more for a successful selection.

Education Loan Eligibility For International Students 

Getting an education loan to study abroad involves meeting certain basic requirements. These criteria are just the starting point; each lender may have additional checks based on the destination country, institution, course, and loan amount.

• Indian Citizenship or Indian Origin: You must be an Indian citizen or a student of Indian origin (PIO/OCI cardholders are usually accepted).
• Confirmed Admission Offer: A valid admission letter from a recognized foreign university or institution is mandatory.  
• Co-applicant Requirement: Most banks insist on a related co-applicant with a regular source of income to act as a financial guarantor.
• Age Criteria: Applicants should be between 18 to 35 years old. However, some lenders may consider mature applicants on a case-by-case basis. In case the applicant is below 18, the education loan will be applied under the guardian’s/parent’s name. 
• Academic Background: A consistent academic record and relevant entrance exam scores (like GRE, GMAT, TOEFL, IELTS) can strengthen your application.
• Course Eligibility: Loans are granted for full-time programs such as undergraduate, postgraduate, MBA, MS, and PhD across disciplines. 

Benefits of Education Loan to Study Abroad

Planning to get a student loan to study abroad comes with big costs. That’s where an education loan for international studies steps in. It eases the financial burden so you can focus on your future.

• Covers all major costs – Tuition, flights, accommodation, books, and more.
• No need to pay everything upfront – You can begin your studies without draining family savings.
• Easy repayment options – Start repaying once you complete your degree and settle in.
• Tax benefits – You can claim deductions on the interest paid, easing long-term costs.
• Gives you financial independence – Learn to manage money while building your credit history.
• Tailored for international students – Loans often include support for specific countries and universities.

 Documents Needed for Study Abroad Education Loan 

Before you apply for an education loan for abroad studies, make sure you have all your paperwork in order. Lenders rely on these documents to confirm your identity, admission status and financial background. Gathering everything up front not only speeds up approval but also shows you’re serious and prepared. Read on to see exactly which papers you’ll need to breeze through the process.

• KYC documents: Aadhaar, PAN, passport
• Admission letter from the university
• Academic records: Mark sheets, certificates, entrance exam scores.
• Co-applicants income proof: Salary slips, IT returns, bank statements
• Estimated cost of education: Fee structure and living expense details from the university
• Passport and visa copy  

Application Process For Education Loan

Applying for an education loan to study abroad is simpler when you know what to expect. Here’s a quick breakdown:

• Apply online via the lender’s website or through trusted aggregator platforms Or apply in person by visiting the bank or financial institution.
• Once you have selected the financial institution and mode, Check your eligibility and compare loan options.
• Submit the application along with the required documents.
• Undergo document verification and financial assessment. Processing time typically 7 to 20 working days, depending on the lender and document readiness. Once done, the applicant will receive a sanction letter.
• Sign the agreement and proceed with disbursement in line with university deadlines.

Collateral Rules for Student Loan for Abroad Studies

When planning to apply for an education loan to study abroad, knowing the collateral rules of the lenders helps you understand how much loan you can borrow, what documents to prepare, and which lenders fit your needs.

• Collateral Requirement Threshold: Most banks ask for collateral if the loan amount exceeds ₹7.5 lakhs.
• Accepted Collateral Types: Residential property, fixed deposits, non-agricultural land, life insurance policies, and government securities are generally accepted.
• Ownership Criteria: The collateral must be owned by the borrower or a close family member, and it should be free of legal disputes.
• Valuation Process: Banks conduct a legal and market valuation of the collateral before approving the loan.
• Loan-to-Value Ratio: The loan amount sanctioned depends on the assessed value of the collateral, usually covering 70–100% of it.
• Collateral for Top Universities: Admission into top global universities may lead to relaxed collateral requirements with some lenders.
• Processing Time: Collateral-based/secure student loans take longer to process due to legal and property checks.

H2: How Scholarships & Education Loan Works?

Scholarships and education loans often work hand in hand to help students manage and calculate the cost of studying abroad. Here's how the two are combined:

• Loan Sanction Based on Remaining Cost: When you receive a scholarship, it reduces the total cost of education. The bank considers the scholarship amount and then calculates the loan based on the remaining expenses like tuition, accommodation, and living costs.
• Proof of Scholarship: During the loan application process, you submit official documentation of the scholarship (award letter, amount, duration). This is factored in while determining your loan eligibility.
• Better Loan Terms: A scholarship (helps if it’s a top study abroad scholarships) can improve your financial profile in the eyes of lenders. It may lead to a lower loan amount, reduced collateral requirements, or improved interest rates.
• No Overlapping Funding: Banks ensure that the combined value of the loan and scholarship does not exceed the total cost of attendance. This keeps your repayment amount realistic and avoids unnecessary debt.

Responsibility of a Guarantor in an Education Loan

Having a guarantor while getting a student loan for international studies is often a mandatory requirement, especially for loans with collateral or high-value funding. The guarantor of education loans in India provides an added layer of financial security to the lender. Understanding what this role entails helps both students and their guarantors make informed financial decisions:

• Eligibility Criteria: Guarantors are typically parents or relatives with a stable income, good credit history, and the ability to repay the loan if needed.
• Document Submission: They must provide financial documents, including income proof, bank statements, and tax returns as part of the loan process.
• Legal Obligation: Once the loan is sanctioned, the guarantor is legally bound to the repayment responsibility, just like the primary borrower.
• Credit Impact: Any default in repayment can negatively affect the guarantor’s credit score and future borrowing capability.
• Personal Liability: In the event of non-repayment, the guarantor's assets or income may be used to recover the dues.

Countries Eligible for Abroad Education Loan In India

Most of the study-abroad destinations are supported by Indian banks through education loans. However, loan eligibility varies by country and institution. This helps avoid delays and ensures your chosen university is covered. Below are popular countries and top universities where Indian students can access education loans.

United States

The US remains the top destination for Indian students seeking world-class education and global exposure. Indian lenders widely support students pursuing degrees at institutions such as the Massachusetts Institute of Technology (MIT), Stanford University, Harvard University, University of California Berkeley, Columbia University, and Carnegie Mellon University. 

United Kingdom

The UK has long been a favorite among Indian students, particularly for programs in law, business, and engineering. Education loans are commonly available for top universities like the University of Oxford, University of Cambridge, Imperial College London, University College London (UCL), and the London School of Economics (LSE).  

Canada

Canada is increasingly popular due to its quality of life, post-study work rights, and immigration-friendly policies. Indian banks provide loans for institutions such as the University of Toronto, the University of British Columbia, McGill University, the University of Waterloo, and Western University.

Australia

Australia offers excellent education in STEM, healthcare, and management. Loans are available for universities like the University of Melbourne, University of Sydney, Australian National University (ANU), Monash University, and the University of New South Wales (UNSW). Financial aid generally covers tuition fees, student health insurance, and accommodation.

Germany

Germany is attractive for its low or no tuition fee model, especially at public universities. Top funded institutions include the Technical University of Munich (TUM), RWTH Aachen University, Heidelberg University, and Freie Universität Berlin.

Ireland

Ireland is gaining traction for programs in technology, finance, and pharmaceuticals. Indian students applying to Trinity College Dublin, University College Dublin, or National University of Ireland Galway can secure loans for tuition and daily expenses, with simplified visa processes often adding to the appeal.

Singapore

Singapore offers globally ranked programs with a strong focus on business, tech, and engineering. Indian lenders usually support institutions such as the National University of Singapore (NUS), Nanyang Technological University (NTU), and Singapore Management University (SMU). 

The Netherlands

Known for its quality education and English-taught programs, the Netherlands is a fast-growing study destination. Students applying to TU Delft, University of Amsterdam, Erasmus University Rotterdam, or Leiden University are eligible for loans to fund their education and living costs.

New Zealand

New Zealand’s research-driven institutions and student-friendly policies make it an emerging favorite. Students at the University of Auckland, University of Otago, and Victoria University of Wellington can avail of education loans to cover tuition, accommodation, and other essentials.

Conclusion

Education loans for study abroad are an important financial tool for students aspiring to pursue higher studies abroad. While the process involves multiple steps, like checking education loan eligibility for international students and more. Careful planning of education loans and the right guidance can significantly ease the journey. It’s essential to evaluate study abroad education loan lenders not just on interest rates, but also on overall terms, service quality, and long-term flexibility.

That's where upGrad Study Abroad comes into the limelight. We offer structured support throughout this process, making your academic journey fly effortlessly.