It mostly covers your tuition fees, living and accommodation expenses, cost of books, cost of commuting etc.

Banks and financial institutions have their own set of criteria defined for sanctioning the Study Abroad Education Loan. The maximum loan amount ranges from Rs.20 lakhs to Rs.1.5 crore.

Study Abroad Education Loan interest rates vary from 9% to 14% depending on the kind of financial institution. Rate of interest at Nationalised Banks is usually 1% to 2.5% lower than Private banks and NBFCs.

Citizenship: You must be an Indian citizen

Co-applicant: A co-applicant (also known as co-borrower) is a must, and it can be anyone amongst your parents, siblings, legal guardian or a relative.

Program eligibility: Banks have their list of approved programs and Universities, and they do not usually finance distance education, correspondence and certification courses.

Collateral Security

• Loan up to Rs. 4 lakhs - No collateral security
• Rs. 4 lakhs to Rs. 7.5 lakhs - Security in the form of satisfactory third party guarantee
• Loan above Rs. 7.5 lakhs:
  • Collateral security of clear title immovable property
  • Co-obligation of parents /guardians /third party along with assignment of future income of the student for payment of instalments

You can apply for education loan on receipt of offer letter from the University. However, if you are planning to take an education loan it would be better to enquire about the process and start the required documentation beforehand.

If education loan interest rates and processing fee concern you, then you should choose a public sector bank since they offer loans on low-interest rates. Study Abroad Education Loans offered by Nationalized Banks like State Bank of India, Bank of Baroda etc., are usually the most sought after. So, make sure you’re availing a loan at a competitive rate of interest. It makes sense to compare interest rates before applying to any bank.

If you don’t have any immovable property (house, plot, shop, commercial building etc.) but you have an admission in a premier institution, then you can approach Private Banks or NBFCs .

I. Documents of the Applicant

1. Duly filled in Education Loan Application Form
2. Offer Letter /Admission Acceptance Letter from University/College
3. Prospectus of University or copy of online course details
4. Details of University World Ranking
5. Statement of cost of study / Schedule of expenses for the entire duration of the course
6. Receipt of Tuition fees paid to the University (If any)
7. Academic Documents
   • 10th & 12th Marksheets with Diploma Certificate (If any)
   • Marksheets of Graduation along with Provisional / Degree Certificate
   • Standardized Test Scores as applicable (GRE / GMAT / SAT / IELTS / TOEFL / PTE, etc.)
   • Work Experience Certificate (If any)
8. Photocopy of the first and the last page of the Passport
9. Photocopy of PAN Card and Aadhar Card of the Student
10. Photocopy of Student Visa & Air Ticket (At the time of Disbursement)

II. Documents of Co-Applicant

1. In case of Salaried Persons
   • Income Tax Returns and Form No. 16 of last 2 years
   • Salary slips of last 3 months
   • Appointment / Promotion Letter along with copy of Employee Identity Card
   • Bank Account Statement of last 6 months (Salary / Personal Account)
2. In case of Business Person
   • Income Tax Returns, Balance Sheet, Profit & Loss Account, Computation of Income of last 2 years
   • Bank Account Statement of last 6 months (Personal and Business Account)
   • Business Proof – Registration Certificate / GST Registration Certificate
3. In case of Agricultural Income
   • Income Certificate for the last 2 years issued by Tahsildar / Mandal Revenue Officer / A Revenue Department Officer having State Level Gazetted rank
4. Photocopy of PAN Card and Aadhar Card of the co-applicant
5. Documents related to Collateral Security

Education loan disbursement means actual release of funds. The disbursement is done after the loan has been sanctioned. Banks do give their share in many cases before the student receives his visa, whenever student is required to pay a part of tuition fee to the University for release of the final offer letter. Thereafter, once the student receives his visa, banks release the education loan in instalments semester wise.

The tenure of Study Abroad education loan generally ranges from 10 to 15 years. By and large, the repayment starts one year after the course completion or six months after the student is employed - whichever is earlier. But, the interest is charged even during the study period and the moratorium period. Most private banks and NBFCs demand repayment of full or partial interest during the study period.