Education Loan

How Much Loan Can I Get For Education Abroad?

How Much Loan Can I Get For Education Abroad?

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Discover your options for studying abroad with our guide on secured and unsecured education loans, maximum loan amounts, and application steps

GyanDhan
Rohit Gidwani
Updated on:  29 Feb 2024  | Reviewed By: 
Aman 
| 95 | 8  min read

Unlocking the funds for your overseas education journey raises a crucial question: "How much student loan can I get for study abroad?" This blog sheds light on navigating through education loans, detailing the factors influencing loan amounts and the distinction between secured and unsecured loans. It offers a comprehensive look at different lenders' maximum loan capacities and demystifies GyanDhan's application process. Designed to empower students with knowledge, this guide is your first step toward financially securing your dream of studying abroad, ensuring you have the necessary insights to fund your future.

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Types of Education Loans

Before we set of answering how much loan can I get for studying abroad it is important to know the types of education loan. When planning for education abroad, students often consider education loans as a primary source of funding. Understanding the nuances between secured and unsecured education loans is crucial for making an informed choice that aligns with one’s financial circumstances.

Secured Education Loans

Secured education loans require borrowers to pledge an asset as collateral, such as real estate, fixed deposits, or other valuable assets. The presence of collateral lowers the risk for lenders, which usually results in lower interest rates and more favorable loan terms for borrowers. The loan amount is often higher, sometimes covering up to 100% of the educational expenses depending on the value of the collateral. However, the risk for borrowers is the potential loss of the collateral asset if they fail to repay the loan.

 

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Unsecured Education Loans

Unsecured education loans do not require any collateral from the borrower. These loans are granted based on the borrower's credit score, financial history, and potential earning capacity. Since these loans pose a higher risk to lenders, they often come with higher interest rates and more stringent repayment conditions. The advantage of unsecured loans lies in their accessibility to students who may not have significant assets for collateral but have a strong academic background and potential for future earnings.

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Maximum Loan Amount from Different Lenders

When considering education loans for studying abroad, a pivotal factor to examine is the maximum loan amount offered by various lenders. This key detail can significantly influence your financial strategy, ensuring you have the necessary funds to cover all expenses of your overseas education, including tuition, living expenses, and more. A comparative look at the maximum loan amounts from different lenders will equip students and their families with the essential information needed to navigate through their financial planning for an international education effectively.

Lender Name Maximum Loan Amount Secured Maximum Loan Amount Unscured

SBI

Up to 1.5 Cr INR

Up to 7.5 Lakh INR 

UBI

Up to 1.5 Cr INR

Up to 40 Lakh INR

Axis Bank

Up to 1 Cr INR

Up to 75 Lakh INR

ICICI Bank

Up to 2 Cr INR

Up to 1 Cr INR

IDFC FIRST Bank

Up to 1 Cr INR

Up to 75 Lakh INR

HDFC Credila

Up to 1 Cr INR

Up to 75 Lakh INR

Auxilo

Up to 75 Lakh INR

Up to 75 Lakh INR

Incred

N/A

Up to 80 Lakh INR

Avanse

Up to 1 Cr INR

Up to 50 Lakh INR

MPOWER Financing

N/A

Up to 85 Lakh INR

Prodigy Finance

N/A

Up to 100% cost to study

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Factors Influencing Maximum Loan Amount

Here are the factors that answers your question - how much loan can I get for studying abroad?

  • list items Type of loan: Secured or Unsecured: The distinction between secured and unsecured loans is a primary factor affecting the loan amount. Secured loans require the borrower to offer an asset as collateral, significantly reducing the lender's risk. This security enables lenders to offer larger loan amounts at potentially lower interest rates. On the other hand, unsecured loans, which do not require collateral, are considered higher risk, resulting in generally lower maximum loan amounts and higher interest rates to mitigate the lender's risk.
  • list items Value of collateral: In secured loans, the loan amount is directly related to the value of the collateral provided. Banks typically lend a percentage of the collateral's value, usually in the range of 80-90%, though it can reach up to 100% in exceptional circumstances. The key takeaway here is that the greater the value of the collateral, the higher the potential loan amount, enabling borrowers to access more funds for their education.
  • list items Co-applicant income: For unsecured loans, the financial stability and income of the co-applicant are crucial. A co-applicant with a strong financial background and high income reduces the perceived risk of default, thus potentially increasing the maximum loan amount that the lender is willing to offer. This assessment helps ensure that there are sufficient funds for loan repayment, especially in the absence of collateral.
  • list items Applicant profile: The applicant's academic record and achievements play a significant role in the loan application process. Lenders look for evidence of the applicant's potential for success, including academic performance, awards, and other recognitions. A robust academic profile reassures lenders of the applicant's future career prospects and earning potential, which in turn can influence the loan amount positively.
  • list items Targeted country: The country where the applicant plans to study significantly impacts the loan amount. Countries with high employment rates and strong economies, like the USA, are viewed more favorably by lenders. These countries offer better job prospects post-graduation, thereby reducing the risk of loan default and allowing for larger loan amounts.
  • list items Targeted course: The chosen field of study is another important consideration. Courses in the STEM fields are particularly valued due to their high demand and the potential for lucrative employment opportunities post-graduation. Consequently, students pursuing these courses are often eligible for larger loan amounts. Conversely, non-STEM courses, which may have lower perceived earning potentials, could result in smaller loan amounts being offered.

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Application Process via GyanDhan

GyanDhan simplifies the process of applying for an education loan for studying abroad. Their service is designed to help students find the best loan option tailored to their needs. The process involves a few key steps:

  • list items Check eligibility: Start by using GyanDhan's loan eligibility tool to get an estimate of the loan amount you could be eligible for. This preliminary assessment is based on your academic profile, the country you wish to study in, and your financial background.
  • list items Loan discussion: A GyanDhan education loan counselor will reach out to discuss your financial needs and study plans. They'll evaluate your situation and advise on the most suitable lender options, focusing on those that align best with your specific requirements for studying abroad. This personalized guidance ensures you're matched with a lender that fits your financial and educational goals.
  • list items Document submission and verification: After discussing your loan requirements, you'll need to submit the necessary documents for your application. This typically includes academic transcripts, financial statements, proof of admission, and any other documents required by the lender. The lender will then verify these documents to assess the credibility of your application and ensure all provided information is complete and accurate.
  • list items Approval and disbursement: Upon successful verification of your documents, the lender will issue a loan sanction letter detailing the terms of your loan, such as the amount, interest rate, and repayment plan. You must sign this letter to accept the terms. Following your acceptance, the funds will be disbursed according to the lender's policies, which may involve releasing the total amount in one lump sum or in installments to align with the payment schedule of your educational institution.

So there you have it – getting your education loan sorted for your overseas studies isn't as daunting as it seems. From loan types to how much you can borrow, it all boils down to a few key factors. Curious about "How much student loan can I get for study abroad?" GyanDhan's got your back. Jump into checking your loan eligibility with them and move a step closer to your dream university abroad.

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Frequently Asked Questions

Can I apply for an education loan before getting my admission letter?

Yes, you can start your education loan application process before securing your admission letter. Many lenders offer conditional pre-approval based on your academic profile and the course you plan to pursue. However, final loan approval and disbursement will require a confirmed admission letter from the educational institution.

Are there specific countries for which banks are more likely to approve education loans?

Yes, banks and financial institutions often have a list of preferred countries where they are more willing to lend, typically based on the job prospects and reputation of educational institutions in those countries. Countries like the USA, UK, Canada, Australia, and Germany are often on these preferred lists.

Can the interest rate on an education loan change during the repayment period?

For loans with a floating interest rate, yes, the interest rate can change based on fluctuations in the market lending rates. Fixed-rate loans, however, maintain the same interest rate throughout the loan's tenure. It's important to understand which type you're considering before finalizing the loan.

Is it possible to extend the repayment period of an education loan?

Yes, in certain circumstances, lenders may allow for an extension of the repayment period. This generally requires a formal request and justification, such as financial hardship. Keep in mind that extending the repayment period will likely result in a higher total interest cost over the life of the loan.

Are there any tax benefits associated with repaying an education loan?

Yes, under Section 80E of the Income Tax Act in India, the interest paid on an education loan for higher studies is eligible for a tax deduction. This deduction can be claimed for a maximum of 8 years starting from the year you begin repaying the loan. This benefit is available for loans taken for higher education for the taxpayer, their spouse, children, or for a student for whom the taxpayer is a legal guardian.

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