Education Loan

IDBI Bank Education Loans for Abroad Studies

IDBI Bank Education Loans for Abroad Studies

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Know all about IDBI Bank education loans to study abroad. Get the details like IDBI Bank education loans overview, eligibility, features, how to apply, documents needed, and so on.

GyanDhan
Gurbani Kaur Suri
Updated on:  15 Nov 2023  | Reviewed By: 
Aman 
| 10.5K | 8  min read

IDBI Bank is a leader in the private banking sector with attractive education loan schemes for higher education of Indians. Education loans from IDBI help you study in your dream university abroad without any financial concerns and they offer additional benefits of government interest subsidy schemes and tax benefits under section 80 E. 


While exploring various options, study abroad education loans offered by the IDBI Bank can be considered for various reasons including reasonably high loan amounts, moderate interest rates, flexible tenure, and other convenient terms and conditions. 

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Overview of IDBI abroad education loan 

IDBI education loans to study abroad helps eligible students accomplish their study-abroad dream with student-friendly loan terms. See the following table for an overview of IDBI education loans to study abroad: 

IDBI bank education loans to study abroad

Maximum loan amount

Up to INR 75 Lakhs for select countries and INR 30 Lakhs for other countries

Rate of interest (Floating interest rate linked to RLLR)

10.60%

Processing charges

1% of the loan amount (maximum INR 5,000) + GST (refundable)

Margin money

Up to INR 4 Lakhs - Nil

Between INR 4 Lakhs & INR 7. 5 Lakhs - 15%

Above INR 7.5 Lakhs - 15%

Moratorium period 

Course period + 1 year

Repayment tenure

15 years once the repayment starts

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Features of IDBI abroad education loan

A student must be aware of the features of education loans offered by the IDBI Bank that include the following: 

  1. list items Loan amount limits: The maximum loan amount can be up to INR 75 Lakhs for higher studies in the USA, UK, Canada, Australia, European Union, Singapore, Japan, Hong Kong & New Zealand. For studies in other countries and courses like Aeronautical, Pilot training, Shipping courses etc. the loan limit is restricted to INR 30 Lakhs.
  2. list items Interest repayment in the moratorium period: Paying the interest is optional in the moratorium period. If the interest is paid during the moratorium period, the repayment will be only towards the principal loan amount and otherwise the interest will be accrued to the principal loan amount. 
  3. list items Interest concessions for girl students: There will be an interest concession of 0.5% to girl students.
  4. list items Balance transfer facility: Students can transfer an existing loan of more than INR 4 Lakhs to IDBI to enjoy better features like lower interest rates if IDBI interest rate is lower than the previous bank’s rate of interest. Terms and conditions apply.
  5. list items Top-up provision: IDBI allows for a top-up facility if the student wishes to take another education loan. If the second loan is taken in the moratorium period of the first loan, the moratorium will be extended to match the second loan’s moratorium period.
  6. list items Collateral requirement: Collateral security is required for loan amounts more than INR 7.5 Lakhs via IDBI education loan to study abroad. The collateral can be immovable property or liquid collateral.  Immovable property: The value of the immovable property must be at least 1.33 times of the loan amount and agricultural land is not accepted. Liquid collateral: Liquid collateral must have 100% fixed returns or surrender value of the loan amount after deducting the applicable loan margins. Accepted liquid assets include fixed deposits, LIC policy, government bonds, etc. 
  7. list items Immovable property: The value of the immovable property must be at least 1.33 times of the loan amount and agricultural land is not accepted.
  8. list items Liquid collateral: Liquid collateral must have 100% fixed returns or surrender value of the loan amount after deducting the applicable loan margins. Accepted liquid assets include fixed deposits, LIC policy, government bonds, etc. 
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Eligibility requirements for IDBI education loans to study abroad

Eligibility criteria for IDBI Bank are mandatory to be fulfilled and are not much flexible for students. The major eligibility factors for IDBI education loans to study abroad are personal and academic requirements as listed below: 

  1. list items Students must be Indian nationals including NRIs 
  2. list items The student should secure admission to an IDBI-recognized institution abroad through academic merit or an entrance test. Examples of IDBI-recognized institutions are those featured in the rankings by QS, Webometrics, etc.
  3. list items The course of study must be listed by IDBI 

Courses eligible for IDBI education loans to study abroad

Based on the employability and future earning capacity after studies, IDBI has made a list of eligible courses for study-abroad education loans as you can see below: 

  1. list items Graduation: Job-oriented professional and technical courses offered by reputed universities or institutions abroad.
  2. list items Post-graduation: MCA, MBA, MS, etc.
  3. list items Courses conducted by CIMA- London, CPA in the USA etc. For CPA/CIMA courses only examination fees and travel costs are funded by the education loan.
  4. list items Degree or diploma courses like aeronautical, pilot training, shipping etc., must be recognized by competent regulatory bodies in India or overseas for employment.
  5. list items PG degrees and PG diplomas from reputed institutes or universities.

 

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Documents required for IDBI education loan for abroad studies

Documentation is crucial when you apply for an education loan. IDBI ensures the eligibility of the student and co-applicant for an education loan by analyzing the personal, financial, and academic documents to be submitted by the student and co-applicant. 

Documents from the applicant

  1. list items KYC documents as proof of identity, age, and address
  2. list items Academic mark sheets from class 10th onwards
  3. list items Result of the entrance exam
  4. list items Offer letter or any other proof of admission
  5. list items Schedule of expenses for the course
  6. list items Passport-size photographs
  7. list items Details of the previous or existing loan if any
  8. list items PAN card
  9. list items Aadhaar - mandatory for availing the benefit of the government subsidy scheme
  10. list items Security documents 
  11. list items A valid passport
  12. list items Self-attested copy of VISA.
  13. list items Self-attested copies of travel documents to claim reimbursement of travel expenses.

Documents from co-applicant

  1. list items KYC documents as proof of identity, age, and address
  2. list items Passport-size photographs
  3. list items Details of the previous or existing loan if any
  4. list items PAN card
  5. list items Proof of income or employment or business
  6. list items Asset liability ascertaining net worth if applicable

Co-applicants income proof requirements

Salaried (Any one of the below)

  1. list items The last 3-month salary slip
  2. list items Salary Account statement for last 3 months with salary credits.

 

If income in addition to salary like pension, rent, etc. is considered - documentary evidence viz. ITR or bank account statement or rent agreement, etc. to be obtained.
SEP and SENP – Audited/ CA Certified P & L and BS for last 2 years. 

Others
Income Certificate by Competent Authority (Tahasildar and above, BPL Card issuing authority, etc.)

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Expenses covered by IDBI education loans to study abroad

The following are the major areas of expenses covered under the study abroad education loan scheme by IDBI bank: 

  1. list items Fees required for the school, college, or hostel
  2. list items Living expenses for staying in or out of campus. The quantum of allowed expenses will be based on the cost of living on the campus.
  3. list items Fees for examination, library, and laboratory. 
  4. list items Caution deposit and other bills. Students must provide valid receipts or bills and the maximum amount allowed is up to 10% of total tuition fees.
  5. list items Study-related purchases like books, equipment, instruments, laptop, etc., and additional expenses like study tours, project work, etc. Up to 20% of the total tuition fee is allowed for this category of expenses. 
  6. list items Insurance premium for the student. 
  7. list items Service tax and Cess if applicable.
  8. list items Travel expenses
  9. list items Guaranteed Investment Certificate (GIC) for Canada.

 

Note: Expenses covered under loan in countries where tuition fee is waived: If the tuition fee is waived, the education loan will cover all the above expenses except the first. However, tangible collateral security is mandatory in such cases irrespective of the loan amount.

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How to apply for IDBI abroad education loan?

Students can apply for education loans from IDBI bank online or offline as per their preference. The online application can be made via the Vidyalakshmi portal for ease and convenience as the portal simplifies the process for students. Also, students can fill in their contact details to get connected with the bank for assistance in applying for an education loan. 

Offline applications can be made by visiting the nearest branch of IDBI bank with relevant documents. The executive will guide you through the process for a successful application. Here you can see the application form for education loans from IDBI bank. 

Before making a final opinion, go through the details of education loans by IDBI and consider the pros and cons to make a better decision. Contact a local branch and talk to the executives for more clarity and guidance regarding your education loan application to IDBI. If you want to explore more education loans, check your education loan eligibility for IDBI and other banks and apply for the best options.

Check Your Education Loan Eligibility

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Frequently asked questions

Can I study vocational courses with education loans from IDBI?

IDBI has a list of eligible courses for education loans based on the employability and future earning potential of the students. Since vocational courses are not included in the list it will be difficult to get education loans from IDBI for vocational courses. 

Does IDBI give education loans to study abroad without collateral?

You can get education loans up to INR 7.5 Lakhs without any collateral security from IDBI. But collateral security is required for loan amounts more than INR 7.5 Lakhs from IDBI. 

Is it possible to get funding for expenses other than what are listed by IDBI? 

Usually IDBI education loans cover the major areas of expenses a student has while studying abroad. If any additional expenses turn up, students can request for funds by providing valid proof to the bank. 

What are the interest subsidy schemes available in IDBI education loans? 

IDBI offers government interest subsidy schemes in education loans if proper documents for eligibility are submitted by the applicant or co-applicant. The following are the major interest subsidy schemes available on IDBI education loans:

  1. list items Central Interest Subsidy Scheme 
  2. list items Padho Pardesh Scheme (discontinued)
  3. list items Dr. Ambedkar Central Sector Scheme of Interest Subsidy

Is the repayment tenure flexible for education loans from IDBI? 

IDBI offers a longer repayment period of 15 years that starts when the repayment commences. The repayment tenure is flexible for students since there is no prepayment penalty on IDBI education loans. Students can pay back the education loan anytime before the limit of 15 years. 

Check Your Education Loan Eligibility


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