Student Loans for Studying Abroad | Admitkard

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Vishesh Chogtu
Modified on 2021-11-22 
Read time: 13 mins
Source: GyanDhan

There are a lot of perks and  benefits in pursuing your undergraduate or graduate study abroad. On a professional front, it gives you a perfect career by providing a job you love. It feeds your knowledge and boosts your skill sets by creating challenging problems that need creative solutions that stimulate your grey cells more. 

However, to study abroad, you need to undergo a long application process which includes many screening levels. Apart from these, you need to take travel and stay, allowances for the day-to-day requirements like groceries, network connections, etc. In this process education loan ensures one less burden to you, i.e., finances. It provides financial solutions for every step of your journey, from pre-admission loans for proof of funds to pre-visa disbursement loans that help you with the visa formalities and fast-track loan which expedites your admission process.​

The process of applying for an educational loan to study abroad is extremely easy. Continue reading this article to learn more about this process of obtaining student loans and the necessary steps, procedures and protocol involved in acquiring them. 

Why take Student Loans?

Apart from the obvious financial assistance, there are a number of reasons that make it advantageous to avail student loans for pursuing higher studies.

They are as follows: 

  • Attractive Interest Rates: Student loans are offered at phenomenally low interest rates that make it an attractive option for students who are looking to procure loans without having to burn too much overtime. 
  • Leaven the Burden of hefty tuition fees: Most Colleges have exorbitant student tuition fees, and are almost too high a burden to bear without financial support. Having student loans helps alleviate the stress and this financial weight, by allowing you to pay back the amount at your own pace. 
  • Investment for immediate assistance: Upon completing college, most people have the ability to fit into a corporate environment and by scaling up in the hierarchy, they put themselves in the best position to pay back these student loans. Thus, these student loans give immediate assistance to pay the college the fees with relative security regarding the future. 
  • Peace of Mind: One can never underestimate the relief one gets when there are no lingering debts that one has to pay while studying. By availing student loans, one can focus on academics and career without constantly having the thought of insurmountable college fees on the back burner of one’s mind. Thus, student loans provide peace of mind and a sense of purpose by freeing themselves from the shackles of pressure and stress. 
  • Building a Credit history: Upon graduating and properly entering the real world, most students have to pay off their student loan and avail a student loan as their first transactions. Thus, by successfully availing and clearing a student loan debt, one has the ability to start building a credible credit history, which can be beneficial for future endeavors and ventures.  

Also read : Education Loan to Study Abroad


Eligibility for Students Loan

The eligibility of education loans for student requires a student to be ;

  • Minimum of age 18
  • Must be an Indian citizen
  • Pursuing graduate/postgraduate degree or a PG diploma.
  • Must have secured admission to a recognised university
  • Must have a passport
  • Collateral/guarantor is required for a loan
  • Their income source should be from a parent or guardian.
  • Should have a good academic record.

Here are the mandatory documents that a student needs to provide to the banks while applying for a student loan:

  • Duly filled and signed application form with affixed photographs
  • 2 photographs of passport size
  • Copy of exam mark sheets of 10th/12th or latest education certificate
  • Statement of course expenses/cost of study
  • Aadhaar Card and Pan Card of the student and Parent/ Guardian

Educational Loans by different banks

There are various banks that offer viable student loan options to students who wish to procure financial assistance for pursuing higher studies. Each bank has their own set of requirements in terms of paperwork, varying rate of interests, and other specifics. We have compiled the details on a few banks that are popular for providing student loans at incentivising rates. 

ICICI Bank 

All Indian citizens who wish to apply for Student loans can easily acquire student loans via ICICI Bank as they remain steadfast in their commitment to empower student’s academic aspirations and freeing them from their financial shackles. 

Maximum loan amount: Rs 1 crore with collateral and Rs 40 Lakhs without collateral

Interest Rate: 11.5% per annum

Loan Tenure: 

Loan Without Collateral:

For UG – Moratorium period + 5 years

For PG – Moratorium period + 8 years

Loan With Collateral:

For UG – Moratorium period + 7 years

For PG – Moratorium period + 10 years 

Margin Money: Upto 20 Lakhs – Nil % and Above 20 Lakhs – 15%

Specific Details:

It is Mandatory for students to repay during their study period. A repayment holiday is given for a period of the course duration and an extra 6 months. These specifications are subject to variations depending on course, institution and country of study. Students who wish to pursue a job oriented degree can avail these loans and in general the loan takes around 7 days to process and release the loan amounts. These loans aim to cover various payments of a student’s life and are relatively free from restrictions. 

Documents Required:

  • Identity Proof
  • Address Proof
  • Past Academic Record
  • Proof of Financial Records

Syndicate Bank

Syndicate bank offers a plethora of student loan options which vary on the basis of the amount required by the student. These are paired with attractive interest rates which make them viable options for financial assistance. 

SchemesMaximum Loan AmountInterest RatesLoan Tenure
Synd Vidya Rs. 20 Lakh9.75% to 11% P.A15 Years + 1 year
Synd Super VidyaRs. 2 Crore8.25% P.ASubject to Variation
Synd Vidya AbroadRs. 1.5 Crore 10.25% P.A15 years
Synd Vidya Skill Loan Scheme – NewRs. 1.5 Lakh9.65% P.AUp to 7 years
Synd Vidya Vocational CoursesRs. 2 Lakh11.75% P.A7 years

All Indian Nationals are eligible to apply for the student loan irrespective of the course they wish to apply. There are certain specifications which vary depending from person to person, and there are specific concessions which are offered depending on the category a person hails from.

Documents Required:

  • Identity Proof
  • Address Proof
  • Past Academic Record
  • Proof of Financial Records

Also read : How to Get an Education Loan in India for Study Abroad?


Vijaya Bank

SchemesMaximum Loan AmountInterest RatesLoan Tenure
Baroda VidyaRs 4 Lakh9.85% P.A12 monthly instalments
Baroda GyanRs 10 Lakh – 80 Lakh8.75% P.A10 – 15 years
Baroda ScholarRs.60 lakh to Rs.80 lakh8.25% P.A10 – 15 years
Baroda Educational Loan to Students of Premier InstitutionsRs.7.5 lakh to Rs.80 lakh7.60% P.ACourse Duration + 1 year

Documents Required:

  • Identity Proof
  • Address Proof
  • Past Academic Record
  • Proof of Financial Records

IDBI Bank

SchemesMaximum Loan AmountInterest Rates
Non -Vocational coursesRs 20 Lakh8.25% P.A
Vocational/ Skill Development CoursesRs 20 Lakh8.65% P.A
Premier Education Institutes coursesRs 20 Lakh6.75% P.A

Bank of Baroda

SchemesLoan amountInterest RatesLoan Tenure
Baroda VidyaUpto Rs.4 Lakhs9.85% P.APaid back in 12 instalments
Baroda GyanUpto Rs.4 Lakhs9.00% P.AUpto 15 years
Baroda Educational Loan Upto Rs.4 Lakhs7.85% – 8.85% P.AUp to 15 years
Baroda ScholarUpto Rs.4 Lakhs8.50% – 9.15% P.AUp to 15 years

Documents required:

  • Complete KYC of the applicants
  • Academic Records
  • Entrance Exam Results
  • Statement of Cost of Study
  • Bank Account Statements
  • Property Documents
  • Proof of Indian Citizenship
  • Application Form
  • Address Proof
  • Identity Proof

Canara Bank

SchemesLoan AmountsInterest RatesMargin Amounts
IBA Model of Educational LoanUpto 7.5 Lakhs without collateral and above 7.5 Lakhs with collateralUp to 7.5 Lakh:   ongoing  One Year MCLR+2.00 %Above 7.5 Lakh:  ongoing One Year  MCLR+1.50 %Upto 4 Lakhs Nil percentage and Above 4 lakhs it is 5% for India and 15% for abroad. 
IBA Skill LoanNeed Based amount of Rs 5000 to Rs. 1.5 Lakhs. On-going One Year MCLR+1.50%Nil Margin
Vidya TurantMax Amount of Rs. 20 Lakhs to Rs 45 Lakhs depending on instituteOngoing One year  MCLR(RoI is subject to change)Upto 4 Lakhs Nil percentage and Above 4 lakhs it is 5%
Vidya ShakthiMaximum Amount of 7.5 LakhsOngoing One year  MCLR(RoI is subject to change)Upto 4 Lakhs Nil percentage and Above 4 lakhs it is 5%
Vidya SahayMaximum Amount of 1 LakhOngoing One year MCLR+2.00% (Subject to change)Nil Margin

Documents Required:

  • Identity Proof
  • Address Proof
  • Past Academic Record
  • Proof of Financial Records
  • Proof of Course Enrolment

HDFC Bank

Maximum loan amount: Rs 30 Lakhs with collateral and Rs 7.5 Lakhs without collateral

Interest Rate: Rates become more preferential for Premier Institutes (Subject to vary)

Loan Tenure

Loan Without Collateral: Moratorium Period up to a maximum of 15 years

Specifics: 

Indian Nationals between the age groups of 16 to 35 years of age, are eligible to apply for student loans for funding full time higher studies courses. The interest rates are extremely attractive and while they are subject to variations, they start from around 9.15% P.A and can go up to a maximum of 12.16% P.A. 

Documents Required: 

  • Proof of Academic Institute Enrolment in the form of Admission Letter
  • Complete KYC of Student in the form of Age Proof, Signature Proof, Identity Proof and Residence Proof
  • Income Documents in the form of either Salary Slips, and Bank Statements or Audited Balance Sheets and Statement of Income for a period of last 2 years. 
  • Completed Application form
  • Photograph

PNB

SchemesLoan AmountRate of InterestLoan Tenure
PNB SaraswatiUpto 7.5 Lakhs with minimum collateral and above 7.5 lakhs with solid collateral securityRLLR + BSP + 2.00%Up to 15 years
PNB PratibhaUpto 7.5 Lakhs with minimum collateral and above 7.5 lakhs with solid collateral securityRLLR + BSP + 1.25%Up to 15 years
PNB UdaanUpto 7.5 Lakhs with minimum collateral and above 7.5 lakhs with solid collateral securityRLLR + BSP + 2.00%Up to 15 years
PNB KaushalUpto 7.5 Lakhs with minimum collateral and above 7.5 lakhs with solid collateral securityRLLR + BSP + 1.50%3 years for Up to Rs 50000, 5 years from Rs 50000 to Rs 1 Lakh, and 7 years for loans above 1 lakh.  
PNB HonhaarUpto 7.5 Lakhs with minimum collateral and above 7.5 lakhs with solid collateral securityRLLR + BSP + 2.00%Up to 15 years
PNB Pravasi Shiksha LoanUpto 7.5 Lakhs with minimum collateral and above 7.5 lakhs with solid collateral securityRLLR + BSP + 2.15%Up to 10 years beyond the moratorium period

Repo Linked Lending Rate (RLLR) = 6.55%; BSP = 0.25%

All Indian Students who wish to pursue higher education can apply for these student and educational loans schemes and avail financial assistance. 

Documents Required:

  • Completed Application form
  • Passport Size Photographs
  • Identity Proof
  • Address Proof
  • Academic Records and Documents
  • Proof of Admission
  • Income Proof
  • Collateral Documents
  • Bank Statements 

Allahabad Bank

Allahabad Bank is one of the few banks that provide financial assistance in the form of Educational loans on a need basis to ensure that students can achieve their dreams and are not confined to monetary limitations. 

Category of AdmissionMax Loan AmountRate of Interest
IIMs, ISBs, XLRIRs. 20 LakhBase Rate + 1.5%
IITs, BITS, and premier Institutes,Rs. 15 LakhBase Rate + 2.0%
NITs, BITS, and reputed institutesRs. 10 LakhBase Rate + 2.5%
Recognized CollegesRs. 10 LakhBase Rate + 3.0%
Management QuotaLoan Up to and above Rs. 4 LakhBase Rate + 3.0%

Specific Details: 

These student loans can be availed by students who wish to pursue higher education either in India or abroad. A Margin rate is applicable on these loans. The rate is Nil for all loans under 4 Lakhs and is 5% (India) and 15%(abroad) for loans above 4 lakhs. For loans under 7.5 Lakhs, the maximum repayment tenure is 10 years. For loans above 7.5 lakhs, the loan has to be repaid within 15 years. 

What is Collateral?

In essence, collateral can be defined as a form of financial security to the lender. These can be assets, properties, bank balances, etc. What qualifies as collateral is often determined by the lender and is entirely up to the lender’s discretion. Depending on the purpose of the loan, the amount of collateral required is subject to vary. In short, one can consider any valuable possession as a form of collateral that reduces the risk for the lender. This property is subject to being seized by the lender upon failure of repayment. In alternative agreements, these can be mortgaged or sold as well. 

Collaterals are useful as those loans which are secured by collaterals, come at better interest rates. Also, having agreed upon a collateral makes the borrower that much more motivated to ensure repayment.

Loan Coverage and Benefits

Costs covered under a student loan:

  • College Tuition Fees and Admission Fees
  • Hostel Fees
  • Miscellaneous Fees in terms of Stationary and Laboratories 
  • Cost of Books, uniforms, equipment, etc. 
  • Caution Deposits that may be required
  • Travel Expenditure for students going abroad
  • Insurance Premiums that may be required
  • Expenses during study tours and project works
  • Academically oriented purchases such as laptops, computers, gadgets etc. 

Benefits:

  • No Charges on part repayments of the money lent
  • A wide range of costs that are covered apart from tuition fees
  • Pre-Visa options for students willing to travel abroad
  • Quick disbursement of loan money
  • Tax Benefits via Certain Schemes

Scholarships to finance your studies

For those students who are worried about the prospect of having to be indebted through a student loan, scholarships are the perfect mode for claiming financial aid. Not only do scholarships provide crucial financial aid and coverage for fees that are owed to the university, but the mere fact that they are offered as a reward for academic excellence is a gratifying experience of its own. Scholarships are offered by Universities themselves, the Government or by NGOs. 

Scholarships are extremely important as they provide people with the opportunity to learn purely on the basis of merit and takes the financial status of the applicant out of the equation. They help students focus on studies and motivate themselves towards academic excellence. 

Eligibility

Each and every scholarship has its own eligibility criteria that have to be met by those who wish to avail the scholarship. These eligibility criteria are split into two parts – General eligibility and specific eligibility criteria. It is therefore imperative that applicants go through the list of criteria and thoroughly review them before sending in their application. 

Requirements

Once an applicant is eligible to avail a scholarship, there are certain requirements that have to be satisfied by the applicant. There are some scholarships that provide free money with no requirements purely on a need basis. Other scholarships have requirements in the form of minimum academic grades, minimum financial income, extracurricular requirements, etc. There are also requirements on the basis of place of employment, nationality, that fall under the miscellaneous category. 

Terms and Conditions

Every aspect of college and academic life has its own set of quirks and asterisks that have to be underlined. Scholarships are no different in this regard as they often are subject to a pre-defined set of terms and conditions. These conditions are absolute and in most cases, failure to abide by them can result in termination of scholarship funds. Therefore, always go through the fine print and read through the terms and conditions specified before agreeing to any scholarship scheme. 

FAQs

Do I need Collateral to Apply for Student loans?

Ans: No! It is not compulsory that one must have collateral to avail any form of student loan, educational loan or financial aid. However, the need becomes more prominent with an increase in the amount of loan offered. In General, banks offer loans upto 4 Lakhs with no need for financial security, mortgaging, or collateral

What is the maximum amount of Student loan I can get?

Ans: Different banks have different amounts that they set as the higher limit for student loans. While these are subject to vary from one bank to another, in general, most banks settle for a higher limit of 25 Lakhs within India and upto 40 Lakhs outside India.  

✅Can a poor student study abroad?

Ans: Some students might wonder how they can study abroad with less money in hand. … There are many similar questions that we have received from students like you. So will you be able to study abroad even if you don’t have sufficient money? The precise answer is – yes, you’ll definitely get to do that!

✅ How can I study in USA for free?

With the help of scholarships from universities, government, and private institutions, getting your degree in the USA for free is highly possible. Scholarship providers can be very selective to their recipients. Thus, you should apply for as many scholarships as you can to increase your chances of getting accepted.

✅ Is education in Norway free?

Public universities in Norway do not charge students tuition fees, regardless of the student’s country of origin. This is a unique opportunity to obtain a degree at a quality university at no cost, and one of many reasons why Norway has become an attractive country for foreign students.


Student Loans for Studying Abroad

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Vishesh Chogtu

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