Last Updated on November 8, 2025
Thinking about going to school abroad but put off by the skyrocketing costs? You’re definitely not alone. Every year, thousands of Indian students put their international dreams on hold as they believe that tuition fees, accommodation and living costs are beyond their means. But the good news is your dream university does not have to remain out of reach.
With the right education loan for study abroad, you can pay for not only tuition but also living, travelling and even visa costs – all without eating into your family’s savings. From SBI, the largest government bank in India to private lenders such as ICICI or HDFC Credila, there are special loan packages for students going to places such as the UK, USA, Canada, and Australia.
So, before you write that acceptance letter off, let’s see how the right education loan can help make your study-abroad dream a life-changing reality.
Why an Education Loan is the Smartest Way to Fund Your Study Abroad Dream
Did you know the average cost of a master’s degree in the U.S. can easily cross ₹40 lakhs? And that is before you even think about rent or groceries? It is no wonder so many students pause at the price tag. Yet, every year, thousands of Indian students still make it happen. And not because they are sitting on piles of savings. They are doing it with the help of an education loan.
A good loan for students is not just about covering tuition. It’s a bridge that connects your acceptance letter to a classroom in another country. It lets you focus on your studies instead of worrying about finances. And here is the thing: graduates from top global universities often earn salaries that more than repay the investment.
Instead of emptying your family’s savings, an education loan spreads the cost across years, making your dream financially realistic. In short, it turns “maybe someday” into “I am leaving next semester.”
Now that you know why it makes sense, let us see how education loans actually work.
Types of Education Loans for Studying Abroad
When it comes to funding your studies overseas, not all loans are the same. The kind of student loan you choose can decide how easy your journey feels. Both before and after you fly out. Broadly, education loans fall into two main categories: secured and unsecured, with a few flexible options in between offered by banks and NBFCs.
Secured Education Loan for study abroad
A secured loan is the traditional route. You pledge something valuable. A property, fixed deposit, or insurance policy, all as collateral. Because the bank has a guarantee, the interest rate is usually lower, and you can borrow a larger amount. For example, SBI’s Global Ed-Vantage scheme allows up to ₹1.5 crore for overseas study at competitive rates when backed by security.
Unsecured Education Loan for study abroad
An unsecured loan does not need collateral. Instead, the bank relies on your co-applicant’s financial profile and your own academic record. ICICI Bank and HDFC Credila, for instance, offer unsecured options that can reach 40 to 50 lakhs INR for well-qualified students. The trade-off? Slightly higher interest rates.
NBFC and Specialized Education Loan for study abroad
Then there are NBFCs and specialised lenders like Avanse or InCred that process loans faster and often with less paperwork. Their flexibility makes them popular with students who are racing against admission or visa deadlines.
Think of it like two routes to your dream university. One backed by your family’s assets, and another backed by your potential.
Eligibility Criteria for an Education Loan in India
Before you apply for an education Loan for study abroad in India, it helps to know what most banks look for. The rules are not identical everywhere, but the basics stay fairly consistent.
First off, you need to be an Indian citizen with a confirmed admission letter from a recognised foreign university. Most lenders ask for a strong academic record, usually a minimum of 60% in your last qualifying exams. If you have done well in competitive tests like GRE, GMAT or IELTS, that often strengthens your case for Education Loan for study abroad.
Next comes your co-applicant. Usually a parent, sibling, or guardian. Banks want to see proof of a steady income and a solid credit history. This reassures them about repayment.
Age limits vary a little. For instance, SBI typically lends to students between 18 and 35 years, while ICICI and HDFC Credila may extend flexibility for postgraduate applicants. Requirements differ, but the idea remains simple: show that you are academically capable and financially backed to make good on your study-abroad plans.
Documents Required for a Student Loan
When you apply for a student loan, the paperwork can feel overwhelming. But it is really just about proving who you are, what you plan to study, and how you will repay. Think of this as your financial “admission file”. The stronger it is, the faster your approval.
Start with the basics: a completed loan application form, your passport, and the admission letter from your chosen university abroad. Next come your academic transcripts, 10th, 12th, and degree certificates, along with relevant test scores such as IELTS, GRE or GMAT, depending on your course and destination.
Most banks, including SBI and ICICI, also ask for income proofs from your co-applicant, such as Form 16, IT returns, or salary slips. If you are applying for a secured education loan in India, you will also need collateral papers. Property documents, valuation reports, or fixed deposit receipts.
Keep everything neatly organized. It not only saves time but also tells your lender you mean business.
In essence, the documents you need for an education loan for study abroad includes:
- Completed application form
- Passport and admission letter
- Academic transcripts and exam scores (IELTS, GRE, etc.)
- Income proofs (Form 16, IT returns, salary slips)
- Collateral papers (for secured loans)
Read more: Study in UK for Indian Students 2026
How Much Can You Borrow as Education Loan for Study Abroad
The amount you can borrow for Education Loan for study abroad really depends on your course, destination, and financial profile. In most cases, banks and lenders in India offer anywhere between ₹30 lakhs and ₹3 crores for overseas studies.
For example, the State Bank of India’s Global Ed-Vantage scheme allows loans up to ₹1.5 crore for full-time programs abroad, while ICICI Bank can extend as much as ₹3 crore for select universities and courses. HDFC Credila and other NBFCs often provide customised limits based on your university ranking and repayment potential.
It is also linked to what and where you study. An MBA student in the U.S. might qualify for around 50 to 60 lakhs INR, considering higher tuition and living costs. A STEM student in Germany could need about 25 to 30 lakhs INR. Lenders evaluate your co-applicant’s income, collateral, and academic record to decide the final figure. The stronger your overall profile, the higher your chances of approval. And better terms too.
Key Factors to Consider Before Choosing a Lender for Education Loan for Study Abroad
Choose a lender who is transparent, fast, and responsive. When comparing options for an education loan in India, do not just look at the loan amount. Look at how each bank or NBFC treats you through the entire process.
Start with the interest rate. Some lenders offer fixed rates, which stay the same throughout repayment. Others go for floating rates that can change with market trends. SBI’s Global Ed-Vantage loan starts around 9.2%. Private banks like ICICI may offer slightly higher but flexible terms.
Check the processing time and fees. ICICI and HDFC Credila are known for quick digital approvals, but they might charge small processing fees.
Review repayment terms too. Many banks allow up to 15 years for repayment with a moratorium covering your study period plus 6 to 12 months.
Finally, consider customer service and credibility. A lender that answers your queries quickly is worth far more than a marginally lower rate.
How Repayment of Education Loan for study abroad Works
You start repaying not before you even pack your bags. Most education loans come with a moratorium that is equivalent to the time of your course, plus an additional 6 to 12 months after graduation. This gives you time to find work and get financially stable before your first EMI begins.
Once the grace period is over, regular repayments begin. You can opt for fixed EMIs or a flexible step-up plan whereby the EMI becomes gradually higher as your income grows. Banks like SBI, ICICI give you the option to repay early or partly without taking heavy penalties which can help in reducing the total interest.
Missing payments can hurt your credit score and, if the loan is secured, put your collateral at risk. Whether or not you could afford it, keeping up to date with your EMIs would instil trust and keep your financial record clean, something that will matter long after you are done with your degree!
Tax Benefits on Education Loan for Study Abroad
One of the lesser known advantages of taking an education loan in India is the tax benefit under Section 80E of the Income Tax Act. This provision allows you to claim a deduction on the entire interest paid on your education loan for a period of up to eight years. Or until the interest is fully repaid, whichever comes first.
The best part? There is no upper limit on the amount you can claim. This means if you pay 1 lakh INR as annual interest, that full amount can be deducted from your taxable income.
Mistakes to Avoid While Applying for a Student Loan
When you are eager to secure funds, it is easy to rush through the process. But small missteps can cost you later. Here are a few to watch out for when applying for a student loan:
- Jumping at the first lender without comparing options
- Applying too close to admission or visa deadlines
- Ignoring key terms like fixed vs. floating interest rates
- Submitting incomplete or inaccurate information
- Skipping a realistic repayment plan
Do not let paperwork anxiety make you sign something you do not fully understand. Take a day, read the fine print, and ask questions. Your future self will thank you for it.
Read more: UK Study Visa Interview Questions with Answers 2026
Final Advice on Making Your Global Education Dream Affordable
Studying abroad is one of the biggest investments you will ever make. But it should not drain your present. The right education loan for study abroad can turn a dream that feels distant into a plan that is actually possible. From tuition and housing to travel and visa costs, a well-chosen loan helps you focus on what really matters.
So take the time to compare lenders, understand repayment options, and plan ahead. And if you are unsure where to begin, you do not have to figure it out alone. Talk to Admissify’s study abroad experts today and find the loan that fits your goals, not just your profile.
FAQs
An education loan for study abroad helps Indian students cover tuition, living, and travel costs while pursuing higher studies overseas, with repayment starting after course completion.
Depending on the lender and course, student loans in India can range from ₹30 lakhs to 3 crores INR for overseas education.
Any Indian student with confirmed admission to a recognised foreign university and a financially stable co-applicant can apply for an education loan in India.
Yes, most loans for students include living, accommodation, and travel costs in addition to tuition fees.
Yes, under Section 80E, the interest paid on an education loan is fully deductible from your taxable income for up to eight years.
As a dynamic social media content strategist and storyteller, Bhaskarjyoti blends creativity with data-driven precision to turn aspirations into action. With a keen understanding of what today’s students seek, he has redefined how study-abroad dreams are communicated, combining global trends with grounded Indian values. He also works across student guides, scholarship explainers, university deep-dives, and thought pieces, making study-abroad content both insightful and accessible. Always curious, always evolving – he believes that great content is not just about reach, but about impact. And that the right story, told the right way, can change a life.
