Student Loan Options for Indian Students Studying Abroad

How to Secure a Student Loan

Studying abroad is a dream for many Indian students, offering access to high-quality education, global exposure and greater career opportunities. However, the cost of international education can be a significant financial burden. To make this dream achievable, various banks and financial institutions in India provide student loans specifically for studying abroad. These loans cover a range of expenses such as tuition fees, accommodation, travel and sometimes even living expenses. In this article, we explore student loan options for Indian students, eligibility criteria and the application process to help aspiring students make informed decisions.

Eligibility Criteria for Student Loan Options for Indian Students

Before applying for a student loan, you have to understand the eligibility requirements set by banks and financial institutions. Here are the common criteria:

• Admission to a recognized institution: To qualify for a loan, the student must have secured admission to a recognized university or college abroad. Admission to professional courses like medicine, engineering and management often has higher approval chances.
• Indian citizenship: The applicant must be a resident Indian. Some banks also allow Non-Resident Indians (NRIs) to apply, but the terms may vary.
• Academic performance: A strong academic record can boost loan approval chances. Although a poor academic history doesn’t automatically disqualify applicants, banks may assess past performance before approving the loan.
• Age limit: Generally, applicants must be between 18 to 35 years old. The exact age limit varies from one financial institution to another.
• Guarantor or co-applicant: Most banks require a guarantor, who could be a parent, guardian or relative. The guarantor’s income and credit history will also be evaluated to assess loan repayment capacity.

How to Apply for a Student Loan

Applying for a student loan in India involves a systematic process. Here’s a step-by-step guide:

• Research loan options: Before applying, research different loan options and compare interest rates, loan amounts, repayment terms and other factors.
• Check eligibility: Ensure that you meet the bank’s eligibility criteria, including academic and financial requirements.
• Gather required documents: You will need various documents, including proof of admission, academic records, identity proof, residence proof and financial documents such as the guarantor’s income proof and tax returns.
• Apply online or offline: Many banks offer the option to apply both online and offline. Fill out the application form and submit the required documents.
• Loan processing and approval: Once you submit your application, the bank will review it, assess the guarantor’s financial stability and may require a face-to-face interview. Once approved, the bank will disburse the funds either directly to the institution or to your account.
• Disbursement and usage: After the loan is approved, the funds will be disbursed as needed, either in full or in installments. The loan usually covers tuition fees, travel expenses and sometimes living costs abroad.

Loan Options to Consider

There are multiple loan providers in India that cater to students planning to study abroad. Below are some of the top options:

1. State Bank of India (SBI) Global Ed-Vantage Scheme

The SBI Global Ed-Vantage Scheme is one of the most popular student loan options for studying abroad. It offers:

• Loan amount: Up to INR 1.5 crore.
• Interest rate: Starts from 8.65% (with a 0.50% concession for female students).
• Repayment: Begins six months after course completion, with a repayment period of up to 15 years.
• Coverage: Tuition fees, travel, accommodation and other expenses.

2. HDFC Credila

HDFC Credila is a dedicated education loan provider and offers flexible options tailored to international students.

• Loan amount: Varies based on student needs.
• Interest rate: Floating rate starting from 11%.
• Repayment: Flexible repayment plans, including part-payment during the course.
• Coverage: Tuition fees, travel, accommodation and living expenses. Pre-admission loans are also available.

3. Axis Bank Education Loan for Abroad Studies

Axis Bank provides education loans for Indian students wanting to pursue higher education overseas. The loan features include:

• Loan amount: Up to INR 40 lakh.
• Interest rate: Floating rate starts at 9.00%.
• Repayment: The repayment period is up to 15 years, with a grace period of six months to one year after course completion.
• Coverage: Tuition fees, travel and other academic expenses.

4. ICICI Bank Student Loan

ICICI Bank offers a broad range of student loans for international studies, with customized repayment plans.

• Loan amount: Up to INR 1 crore.
• Interest rate: Ranges from 10.50% to 12.00%, depending on the course and institution.
• Repayment: Repayment starts six months after course completion, with flexible tenure options.
• Coverage: Tuition fees, accommodation, travel and other education-related costs.

5. Punjab National Bank (PNB) Udaan Scheme

Punjab National Bank offers the PNB Udaan Scheme for students pursuing professional courses abroad.

• Loan amount: Up to INR 1 crore.
• Interest rate: Starts from 8.65%.
• Repayment: The repayment period can extend up to 15 years.
• Coverage: Tuition, living and travel expenses.

Important Considerations

When applying for student loan options for Indian students, it’s important to consider the following:

• Interest rates: Compare interest rates across different banks. Lower rates mean smaller EMIs (Equated Monthly Installments), which make loan repayment easier.
• Repayment moratorium: Many banks offer a moratorium period, which allows students to start repayment after completing the course or securing a job. Check the length of this moratorium as it varies across lenders.
• Processing fees and hidden costs: Some banks charge a processing fee for approving loans. Be sure to ask about these charges and any hidden costs before signing the loan agreement.
• Collateral requirements: Loans above INR 7.5 lakh often require collateral such as property or fixed deposits. Make sure you understand the collateral requirements for higher loan amounts.