Updated on: 28 Sep 2023
The Government of India has implemented various schemes and interest subsidies to provide financial assistance to students pursuing studies abroad. These initiatives are designed to support students from economically weaker sections and marginalized communities in their educational pursuits.
It is important to note that though it is commonly referred to as government education loans for study abroad, these initiatives are not direct loans but rather schemes that offer financial aid and interest subsidies. By availing of these schemes, students can benefit from reduced interest rates, flexible repayment options, and other forms of support.
Education loan for abroad studies by Indian government
Under the below-mentioned subsidy schemes, a full interest waiver during the moratorium period is provided. The Government of India interest subsidy scheme is linked with the Indian Banks Association (IBA) and hence applicable only to those banks that are members of the IBA. Loans from NBFCs are not eligible for these schemes.
Subsidy schemes by Indian government
- Dr. Ambedkar Scheme
- Central Sector Interest Subsidy
- Interest Subsidy Scheme by the Government of Gujarat.
- Padho Pardesh Scheme
1. Dr. Ambedkar Central Sector Scheme
The Dr. Ambedkar Central Sector Scheme provides interest subsidies on education loans. This scheme is available for meritorious students who have secured admission in the approved courses at Masters, M.Phil, or Ph.D. courses abroad.
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Eligibility criteria
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- Student should belong to EBC or OBC
- For OBC candidates, total family income shall not exceed INR 8 Lakh per annum
- For EBC candidates, total family income shall not exceed INR 2.5 Lakh per annum
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Loan amount
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Not specified
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![Guidelines ISEL Scheme]()
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2. Central Sector Interest Subsidy (CSIS)
The Ministry of Human Resources Development and Department of Higher Education has formulated this education loan interest subsidy for the students of economically weaker sections for pursuing technical/professional courses in India.
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Eligibility criteria
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- Students should have secured admission to a recognized Indian/foreign university.
- Student’s total family income shall not exceed INR 4.50 Lakh per annum.
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Maximum loan amount
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INR 10 Lakh
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3. Interest Subsidy Scheme on Gujarat Government Education Loan for Study Abroad
Education loan for study abroad by the Gujarat government offers a 100% interest subsidy to economically weaker students from Gujarat who wish to pursue higher studies abroad.
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Eligibility criteria
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- Students must have secured at least 60% in your 12th grade.
- Total family income of the students should be less than or equal to INR 6 Lakh annually
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Loan amount
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Up to INR 15 Lakh
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Courses eligible
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Professional courses at graduate, post-graduate, and diploma levels
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4. Padho Pardesh Scheme
Please note that this scheme has been discontinued by the Government of India.
The objective of this scheme was to award 100% interest subsidies on education abroad loans to meritorious students belonging to economically weaker sections of society and hence enhance their employability.
Eligibility criteria
- You should have secured admission into the approved courses at the Master, Ph.D., or M.Phil level.
- Student must belong to a minority community (Muslims, Christians, Buddhists, Sikhs, and Parsis)
- Student’s total income must not exceed INR 6 Lakh per annum.
Education loan schemes for study abroad education by the Government of India
- Credit Guarantee Fund Scheme
- National Minorities Scheme
- National Safai Karamcharis Scheme
- National Backward Classes Scheme
- National Scheduled Castes Scheme
- National Handicapped Scheme
- National Scheduled Tribes Scheme
1. Credit Guarantee Fund Scheme for Education Loans (CGFSEL)
In 2015, the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) was introduced by the Government of India. This government education loan for study abroad is primarily for students who wish to study abroad but do not have any collateral or co-applicant to pledge. Under this scheme, you can get up to INR 7.5 Lakh loan without any collateral or co-applicant.
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Eligibility criteria
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- Student should belong to Economically weaker section
- Student’s annual family income should be less than INR 4.5 Lakh.
- Students should have secured admission to an approved technical or professional course.
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2. National Minorities Development & Finance Corporation (NMDFC)
The National Minorities Development & Finance Corporation (NMDFC) is a government body that works toward financing the minority sections of society, through State Channelising Agencies (SCAs). NMDFC provides loans to study in India & abroad for professional and job-oriented courses.
NMDFC has divided the minorities into two subsections:
Credit line 1: It refers to the candidate with an annual family income of INR 1.20 Lakh in urban areas & INR 98,000 in rural areas.
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Education loan for study in India
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Up to INR 20 Lakh
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Education loan for study abroad
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Up to INR 30 Lakh
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Rate of interest
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3%
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Moratorium period
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Course duration + 6 months
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Repayment time
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5 years
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For credit line 2: It refers to the candidate with an annual family income of INR 6 Lakh.
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Education loan for study in India
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Up to INR 20 Lakh
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Education loan for study abroad
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Up to INR 30 Lakh
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Rate of interest
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8% - men
5% - women
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Moratorium period
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Course duration + 6 months
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Repayment time
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5 years
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3. National Safai Karamcharis Finance & Development Corporation (NSKFDC)
The NSKFDC actively works toward the economic development of the safai karamcharis/ Manual Scavengers community.
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Eligibility criteria
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Students should have obtained admission for a specified professional or technical course for the ongoing academic session.
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Loan quantum
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Up to INR 10 Lakh - India
Up to INR 20 Lakh - abroad
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Rate of interest
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4% per annum
(0.5% rebate for women who wish to pursue education in India)
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Moratorium period
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1 year
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Repayment tenure
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5 years
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4. National Backward Classes Finance & Development Corporation (NBCFDC)
The NBCFDC is a government undertaking that provides education loans for both study in India and abroad.
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Eligibility criteria
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- Students should be a member of a backward class (as notified by the Central Government/State Government).
- Student’s per annum income of the family should not exceed INR 3 Lakh.
- Students should have secured admission to a professional or technical course through an entrance test/merit-based selection process.
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Loan quantum
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Up to INR 15 Lakh - India
Up to INR 20 Lakh - abroad
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Rate of interest
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4% p.a. ( Men)
3.5% p.a. (Women)
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Moratorium period
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5 Years
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Repayment tenure
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15 Years
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5. National Scheduled Castes Finance & Development Corporation (NSCFDS)
The NSCFDC is a government body that works for the welfare of the scheduled castes.
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Eligibility criteria
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- Students must have a valid Scheduled Caste (SC) certificate.
- Students' family income should be up to INR 3 Lakh per annum.
- Students must have secured admission to a recognized university. university abroad on the basis of merit.
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Loan quantum
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Up to INR 20 Lakh - India
Up to INR 30 Lakh - abroad
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Rate of interest
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4% (0.5% rebate for women beneficiaries)
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Moratorium period
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Course duration + 6 months
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Repayment tenure
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10 years for loans below INR 7.5 Lakh
15 years for loans above INR 7.5 Lakh
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6. National Handicapped Finance & Development Corporation (NHFDC)
The NHFDC was formulated by the Ministry of Social Justice and Empowerment. Students with disabilities are eligible for availing education loans to study in India or abroad for professional undergraduate & postgraduate courses under this scheme.
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Collateral requirement
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Required for loans more than INR 7.5 Lakh
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Loan quantum
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INR 10 Lakh - India
INR 20 Lakh - abroad
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Rate of interest
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4%
(0.5% rebate for women beneficiaries)
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Moratorium period
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Course duration + 1 year
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Repayment tenure
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7 years
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Note: In exceptional cases, the collateral requirement can be waived off if the officer granting the loan is satisfied with the net worth of parents who would be executing the documents as ‘joint borrowers.
7. National Scheduled Tribes Finance and Development Corporation (NSTFDC)
The NSTFDC was set up by the Ministry of Tribal Affairs in 2001. It provides financial aid for technical and professional courses to study in India or abroad.
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Loan quantum
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Up to INR 20 Lakh - India
Up to INR 30 Lakh - abroad
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Rate of interest
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4% (0.5% rebate for women beneficiaries)
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Moratorium period
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6 months after the course is completed or getting employment.
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Repayment tenure
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10 years for loans below INR 7.5 Lakh
15 years for loans above INR 7.5 Lakh
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The Government of India has taken several initiatives to promote education for the underserved sections of society. Education loans for abroad studies by the Indian government offer benefits such as lower interest rates and flexible repayment options, enabling students to pursue higher education while minimizing their overall costs. You can seek an abroad education loan from the Indian government given that you meet the pre-set eligibility criteria and have accepted an offer letter from your chosen foreign university. Moreover, subsidy schemes have also been launched that provide the required financial help with lower interest rates and easy repayment options.
However, if you fail to fulfill the government eligibility criteria and are looking for the right education loan to fund your study abroad journey, then GyanDhan is your one stop solution. From evaluating your profile to providing the best education loan possible for you, we have it all covered. So check your education loan eligibility to start your education loan journey.
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Frequently asked questions
What are some top education loans for abroad studies by the Indian government?
Some top government education loan for study abroad are:
- Dr. Ambedkar Central Sector Scheme
- Education loan scheme by NFDC
- Central Sector Interest Subsidy
What is the minimum percentage required to apply for an education loan for abroad studies by the Indian government?
The minimum percentage required to apply for an education loan for abroad studies by the Indian government is 60% mostly. To avail the government loans/schemes, students should hold a strong academic background.
What are the documents required for applying for an education loan for abroad studies by the Indian government?
Documents required for education loan for abroad studies by the Indian government-
- Photo ID
- Residence proof
- Academic documents of student
- Offer letter of the university/college
- Bank statement of the last 8 months of co-applicant
- Income proof of the co-applicant
- Collateral proofs
- Income tax return documents (if the applicant is self-employed)
Is there any subsidy on education loans for abroad studies by the Indian government?
Yes, there are several government schemes to avail interest subsidies on education loans, such as the Central Scheme of Interest Subsidy, and Credit Guarantee Fund Scheme to name a few.
When will the repayment start for the education loan for abroad studies by the Indian government?
The repayment tenure usually starts 6 months or 1 year after the program completion or after getting employed, whichever is first.
First published date: 19 Oct 2017
