Education Loan for Abroad Studies

Our 5-Step Process to Get Best Student Loans for Studying Abroad
Study abroad
Check Loan Eligibility

What are Education Loans?

An education loan is a financial aid that students apply for to fund their studies abroad. Different banks and financial institutions offer these loans at competitive interest rates, making quality education more affordable for students.

Studying at renowned universities, especially abroad, opens doors to numerous opportunities. However, the cost of such education can be substantial. To bridge the financial gap, education loans for studying abroad become invaluable, enabling students from all backgrounds to pursue their dreams at top-tier institutions across the globe.

With various banks and lenders providing education loans for abroad studies, choosing the right option can be overwhelming. This is where GyanDhan comes in as a guiding light. We help students find the best education loan for their study abroad needs, tailored to their unique profiles, ensuring a seamless and hassle-free loan approval process.

Types of Education Loans for Abroad Studies

Education loans are of two types, one that is taken with collateral i.e. a secured loan and one taken without collateral i.e. an unsecured loan. You need to understand the difference between the two before choosing the one that is right for you.


Secured Education Loan

  1. Requires the borrower to offer any collateral like immovable property, FD, Insurance Policy etc. against which the loan is offered.
  2. Lower rate of interest.
  3. The chances of approval is high.
  4. Longer repayment period.
  5. A higher loan amount can be availed.
  6. No repayment during study period.
  7. Parental income is not required for the approval.

Unsecured Education Loan

  1. The borrower does not need to offer any collateral to get this loan.
  2. Higher interest rate, usually 1.5% - 4% higher than the secured loan.
  3. Is a more risky proposition for the bank, hence is not so easy to obtain a loan without collateral from the bank.
  4. Comparatively shorter repayment period.
  5. Some repayment during study period.
  6. Parental income is required for the approval.
Apply Education Loan For Study Abroad

Types of Lenders Offering Education Loans for Abroad Studies

When considering student loans for studying abroad, you have three main categories of lenders to choose from: banks, Non-Banking Financial Companies (NBFCs), and international lenders. The lending choices within each category are as follows:

  1. Banks: Traditional financial institutions that offer education loans to students pursuing studies abroad and are further divided into public and private banks.

  2. NBFCs: Non-Banking Financial Companies are financial institutions that offer various financial services similar to traditional banks but operate without a banking license.

  3. International Lenders: Financial entities based outside your home country that specialize in offering educational funding for international students.

Key Features of Education Loan for Abroad Studies



Private Banks


International Lenders

Best known for

Secured loans

Unsecured and secured loans

Unsecured loans

Unsecured without co-applicant

Popular choices


Axis, ICICI, and IDFC 

HDFC Credila, Avanse, InCred. And Auxilo 

MPOWER and Prodigy

Interest rate

Starting at 9.8%

Starting at 10.85%

Starting at 11.25%

Starting at 11.00%

Maximum loan amount*

INR 1.5 Cr 

INR 50 Lakh

INR 75 Lakh

100,000 USD

Margin money*

10% - 15%

0 - 10%



Repayment tenure*

Up to 15 years

Up to 15 years

Up to 20 years

Up to 15 years

Repayment options

Free or SI




Processing time*

10 - 15 days

5 - 7 days

5 - 7 days

5 - 7 days

Financial co-applicant required*





Tax benefit*



Only HDFC Credila


SI - Simple Interest, PSI - Partial Simple Interest, EMI - Equated Monthly Installment

Documents Required for Education Loan for Abroad Studies

Education loan required documents vary from lender to lender and also depend on the type of education loan applied for. Here’re the general documents required by almost every lender:

From Both Applicant & Co-applicant

KYC Documents

  • PAN Card
  • Driving License
  • Aadhar Card

Address Proof

  • Aadhar Card
  • Valid water/electricity/ LPG Bill
  • Voter’s ID card
  • Current House Lease Agreement
  • Valid Passport

Academic Record Documents (From Applicant)

  • 10th Result
  • 12th Result
  • Proof of Admission
  • Under Graduate Result Semester Wise (If required)
  • Entrance Exam Result - Abroad institutes (GRE, GMAT, TOEFL, IELTS etc.)

For Salaried Co-applicant

  • Salary slips of the last 3 months
  • Copy of Form 16 for last 2-3 years or copy of IT Returns for last 2-3 financial years, acknowledged by Income Tax Dept.
  • Bank account statement for the last 6 months (salary account).

For Self-employed Co-applicant

  • Business address proof (If Applicable)
  • TDS Certificate (Form 16A, if applicable)
  • Last 3 years ITR
  • Certificate of qualification (for C.A./ Doctor and other professionals)
  • Bank Account statement for the last 6 months
  • Approved layout plan and permissions (if applicable),
  • NOC and allotment letter
  • Possession certificate (if applicable)
  • Copy of prior sale deeds
  • Conversion certificate where the property has changed from agricultural to non-agricultural use
  • Urban clearance certificate
  • Sale/gift/partition deed
  • Khata certificate and extract
  • Encumbrance certificate (EC)
  • Latest property tax receipt

Best Lenders to Get an Education Loan for Abroad Studies

A comprehensive comparison of some of the best lenders offering education loans is tabulated below. Detailed information on each lender's loan amounts, interest rates, moratorium periods, and other essential factors is provided, enabling you to make informed decisions.

Basis of difference



Loan amount (unsecured)

Up to INR 40 Lakh

Up to INR 7.5 Lakh

Interest rate

Starting at 9.8%*

Starting at 11.15%*

Moratorium period

Course + 12 months

Course + 6 months

Processing fees

No processing fee

10,000 INR + GST

Processing time

Up to 7 days

Up to 14 days

Unsecured loan eligibility

Only for masters program


Premiere institute list

Have a list that can lead to fluctuation in interest rate


Loan Approval Basis GRE / GMAT?



*Interest rate as of August 2023

Basis of difference

IDFC First Bank


Axis Bank

Maximum loan amount

Secured loans - INR 1 cr
Unsecured loans - INR 75 Lakh

Secured loans - INR I cr
Unsecured loans - INR 40 Lakh

Up to INR 40 - 75 Lakh

Interest rate

11.50% - 12.25%

9.85% - 15.5%

11% - 11.5%

Margin money


0 - 15%

0 - 5%

Processing fees

1 - 1.25%

0.5 - 2%

0.75% of the loan amount + GST

Moratorium period

Course period + 12 months

Course period + 6 months

Course period + 1 year

Repayment during the course duration

Simple or partial interest

Simple interest

Simple Interest (SI)

Loan tenure

12 years

8 - 12 years

15 years

Co-applicant minimum income

INR 35,000 / per month

INR 60,000 / per month

INR 35,000 / month

Co-applicant age

32 years

35 years

Pre-approved college lists

Colleges and universities are divided into three categories i.e. Platinum, Titanium, and Gold

Colleges and universities are divided into four categories i.e A1, A1, A3 & A4

Loan approval basis GRE / GMAT?




*Interest rate as of July 2023


HDFC Credila




Maximum loan amount

INR 20 - 75 Lakh

INR 20 - 75 Lakh

INR 20 - 75 Lakh

INR 20 - 80 Lakh

Interest rate*

11.25% - 13%

12.25% - 14%

12% - 13.25%

11.65% - 13.5%

Moratorium period

Course period + 1 year

Course period + 1 year

Course period + 1 year

Course duration + 1 year

Repayment during the moratorium period

Simple Interest (SI) or partial Simple Interest (PSI)

Simple Interest (SI) or partial Simple Interest (PSI)

Simple Interest (SI) or Partial Simple Interest (PSI)

Simple Interest/ Partial Simple Interest

Processing fee

0.5% - 1.5% of the loan amount + GST

1% - 2% of the loan amount + GST

0.5% - 1.5% of the loan amount + GST

0.5% - 1% of the loan amount + GST

Loan tenure

12 - 15 years

12 - 15 years

12 - 15 years

12 - 15 years

Margin money





Minimum co-applicant income (negotiable for secured education loans)

INR 30,000 - 60,000

INR 30,000 - 60,000

INR 20,000 - 40,000

INR 20,000 - 40,000

*Interest rate as of July 2023


MPOWER Financing

Prodigy Finance

Interest rates*

Undergraduate courses: 13.99%

Graduate programs - 12.85%

Interest rate: 11% - 14%

Interest rate type



Interest rate discounts

0.25% (on autopay*)

No discount

Target country (to where you want to go)

USA and Canada

Majorly USA and Canada but also have some universities from UK, Australia, Ireland, and 14 more countries.

Number of schools supported




Full simple interest during the study period + 6 months

Full free moratorium during study period + 6 months;

EMI will start after 6 months, of course

Loan tenure

Up to 10 years

Up to 20 years

Programs supported

Bachelors and Masters

Only Masters


Provides loan for a maximum of 2 years of courses only and for the last 2 years of bachelor's degree.

Provides loan for masters STEM courses only

Additional services

Loan top-up* (Avanse and Incred), Path2Success Program (career guidance),

conditional offer letter, and scholarships

Only loan top-up (Avanse and Incred)

Loan Approval Basis GRE / GMAT?



*Interest rate as of July 2023

Our Lending Partners

How to Choose the Best Overseas Education Loan?

Financial institutions can provide funding up to 100% of the course cost, depending on the amount and the borrower's profile.

To secure the most suitable education loan, it is essential to analyze key aspects of the available options. When applying through GyanDhan, our team conducts this analysis on your behalf. If you choose to compare loans independently, consider these factors carefully.

  1. Interest Rate: Even a 1% increase in the education loan interest rate has a substantial financial effect. Example - Loan Amount: Rs. 30,00,000, Loan Repayment in: 5 years after you graduate, Course Duration: 2 years; While at 10%, you’ll pay Rs. 9.7 lakhs in interest, at 11%, you’ll pay Rs. 10.9 lakhs - that’s a difference of 1.2 lakhs for just 1%!. Also, historical changes done by any lender in its interest rates should also be considered.

  2. Interest rate discount: These are offered by lenders to borrowers as a means to reduce the overall cost of borrowing. These discounts are usually offered when borrowers meet certain criteria, such as maintaining a good academic record or setting up automatic monthly payments. This is an important factor to consider as this helps to reduce the overall cost to borrow which can be a great relief for you.

  3. Interest Rate in Different Currencies: Often students face a dilemma of choosing over an education loan in USD with a lower interest rate or an equivalent amount in INR with a higher interest rate. By the previous trend of the rising prices of USD to INR conversion rates, it is a smart choice to go for the loan amount in INR even though it may come with a higher interest rate.

  4. Loan tenure: Repayment tenure or loan tenure refers to the duration of time for which a borrower is required to repay their loan. It is an important factor while making a decision for choosing the lender for you as a shorter loan tenure can help you in saving interest and ultimately a lot of money, but this will lead to higher monthly instalments. In case you cannot bear high monthly installments then you can opt for lenders that have a longer loan tenure.

  5. Tax Rebate: Education loans for foreign studies taken from Indian banks are special in that the entire amount paid as interest is exempt from income tax. This has a huge impact: Example - Loan Amount: Rs. 30,00,000, Marginal tax bracket: 30%, Repayment in: 5 years after graduation, Course Duration: 2 Years, ROI: 10%... If your loan has tax rebate, you can save Rs. 2.9 lakhs!

  6. Margin Money: The amount that you need to pay from your own pocket while the rest is paid by the bank. If a bank offers a 0% margin, it means they’ll fund all your education expenses in the offered loan amount.

  7. Hidden Fees: There are numerous hidden fees that your lender might be charging you and when accumulated these will cost you a considerable amount, such as:

    • Forex Margin: Some lenders charge a forex conversion charge when the overseas education loan is sanctioned in INR and disbursed in some other currency. This can be as high as 1.5%, which translates to Rs. 45,000 for a loan amount of Rs. 30 lakhs.
    • Processing Fees: This varies from zero to as high as 2%. For a loan of Rs. 30,00,000, the processing fees can be as high as Rs. 60,000
    • Cost of Credit Life Insurance: Some lenders make it mandatory for the applicant to go in for credit life insurance with their education loan scheme so that their loan amount is protected against any unfortunate eventualities. If the premium amount is on the higher side then it eventually increases the cost of the education loan as well.
    • Mandatory Cross-Sell: Some lenders try to cross-sell other policies before sanctioning the education loan, even though it is not required on the applicant’s end.

As you can see, by selecting the right overseas education loan, the reduction in cost can be as high as 5-6%.

Frequently Asked Questions

What does autopay mean in the context of education loans?

Autopay, in the context of education loans, refers to a convenient payment method where the borrower authorizes the lender to deduct the monthly loan instalment automatically from their bank account on a specified date. This automated payment ensures timely repayment and reduces the chances of missing deadlines, helping students manage their loan obligations efficiently.

Explain the concept of an education loan top-up.

An "education loan top-up" allows borrowers who have an existing education loan to obtain additional funds over and above the original loan amount. This option is beneficial when students require extra financial assistance due to increased educational expenses or unforeseen circumstances. The top-up amount is added to the existing loan, and the borrower continues to repay the combined loan amount as per the agreed terms.

What determines the interest rate on an education loan?

The interest rate on an education loan is determined by various factors, including the applicant's creditworthiness, co-applicant's financial profile, loan amount, loan tenure, type of interest rate (fixed or floating), and the lender's internal policies. Students with a strong credit history and co-applicants with stable financial backgrounds are more likely to secure a lower interest rate.

Define margin money concerning education loans.

Margin money in education loan refers to the portion of the total educational expenses that the borrower needs to finance from their own funds. It is the percentage of the course cost that is not covered by the loan and needs to be borne by the student or their co-applicant. The remaining amount, after deducting the margin money, is financed through the education loan.

How long is the moratorium period for education loans?

The moratorium period for education loans is the time during which the borrower is not required to make any loan repayments. It typically starts from the course completion date and extends for a certain period afterward, allowing the student to focus on finding employment and settling into their new career. The duration of the moratorium period varies among lenders but is usually around 6 to 12 months.

What is the purpose of education loan insurance?

Education loan insurance provides financial protection to the borrower and their family in case of unforeseen events, such as the borrower's untimely demise or permanent disability. This insurance coverage ensures that the loan does not become a burden on the family, as the insurance company settles the outstanding loan amount, allowing the borrower's educational aspirations to be fulfilled even in their absence.

What are the different types of interest rates available for education loans?

Education loans typically offer two types of interest rates - fixed and floating. In a fixed interest rate, the rate remains constant throughout the loan tenure, providing stability in repayment amounts. On the other hand, in a floating interest rate, the rate fluctuates based on market conditions, potentially leading to varying monthly installments.

Who is eligible to be a co-applicant for an education loan?

A co-applicant for an education loan is generally a close family member, such as parents, guardians, or spouse, who agrees to take joint responsibility for repaying the loan along with the primary borrower (the student). Co-applicants should meet the lender's eligibility criteria, which may include having a stable income and a good credit history.

How can one avail tax benefits on education loans for abroad studies?

In India, under Section 80E of the Income Tax Act, individuals can avail tax benefits on the interest paid on education loans. The entire interest amount paid during the financial year is eligible for deduction without any upper limit. However, the principal amount repayment does not qualify for tax benefits.

What is the maximum loan limit for study loan for abroad?

In secured student loans for studying abroad, one can get up to INR 1.5 cr. In overseas education loans without collateral, students can apply for study loans of up to INR 75 Lakh. This loan amount limit can increase or decrease depending on the applicants and co-applicants profile, country, course, etc.

What is collateral in the context of education loans?

Collateral refers to any movable or immovable property offered to a bank as security for a loan. Most Indian banks require collateral to minimize the risk involved in extending credit. It can be in the form of liquid assets like bonds, fixed deposits, shares, or immovable properties like houses, commercial properties, or land. Agricultural land is generally not accepted as collateral.

What is the role of a guarantor in an education loan?

A guarantor plays a significant role in an education loan. If the borrower defaults on payment, the guarantor has a legal obligation to repay the loan amount. If the loan amount exceeds INR 4 lakh, the bank may ask for a guarantee from a third party. In such cases, the guarantor holds the liability to repay the entire loan amount to the bank in case the borrower is unable to do so.

Written by Anam Shams

Anam Shams is a seasoned professional in the study abroad field with deep knowledge of admissions and loans. With a passion for helping aspiring students fulfill their academic dreams, Anam combines extensive experience with a commitment to simplifying the complex processes of studying overseas. A trusted advisor, Anam empowers students to navigate admissions seamlessly and secure financial support, making international education more accessible and attainable

Specializes in:
Education loan , Study Abroad Admissions

Photo aman jain
Reviewed by Aman Jain

Aman Jain graduated from IIT Kanpur, and currently functions as the CMO at GyanDhan. He is deeply passionate about creating equality in higher education and has directly interacted with 2 Lakh students in his 8-year-long journey.

Specializes in:
Education loan , Study Abroad Admissions

Upcoming Events

Everything About Unsecured Loans to Study Abroad

  Fri, December 08, 2023    18:00 IST

Live Q&A with University of Texas Student

  Sat, December 09, 2023    20:00 IST

Ask Anything: Insights from Indian Students in the US

  Mon, December 11, 2023    20:00 IST

Looking For Help in Foreign Education Loan? Arrange a Call From an Expert:

Enter Mobile no. Without Any Prefix.
By entering my phone number here, I hereby authorize GyanDhan to contact me through call, message or WhatsApp. \ It will override my registry on the NCPR/NDNC

Help our experts understand you better by filling our 2-Minute Form,
to find the right education loan

Get instant loan offer suitable to your profile !