A good education can often be the key to achieving life success. Getting a higher education at a university outside of your own country can help you get a better job. In many industries, this possibility is also considered as a fantastic learning opportunity.
The cost of education, combined with living expenditures while studying abroad, adds up to a significant figure, which is a major concern for anyone considering studying abroad. This is when a student loan comes in helpful.
In India, almost all banks, as well as several NBFCs and fintech lenders, offer education loans. We’ve compiled a list of some of the best educational loan companies for international studies.
The Characteristics of Education Loans in India
- The amount of the education loan granted might range from Rs 4 lakh to Rs 40 lakhs. On a case-by-case basis, amounts greater than these may be permitted.
- Anyone between the ages of 18 and 35 can apply for an education loan to study abroad.
- Management, architecture, the arts, fashion, and law are just a few examples.
- These loans can be used to study a variety of areas, including science, math, and engineering.
- Because the principal borrower may not be employed, the loan must be co-signed by a co-applicant (either a parent, sibling, or other close family).
- The co-credit applicant’s score is taken into account when approving the loan.
- The applicant may be required to cater a margin of 5-15 percent.
- Tuition payments, book costs, food and lodging costs, lab and library fees, travel costs, study tour costs, and so on are all covered by an educational loan.
- A moratorium period applies to an education debt till the studies are completed. Only basic interest is charged on the borrowed amount during this time. During this time, the applicant will only have to pay interest.
- Depending on the lender’s policies, the term of an education loan can last up to 15 years, including the moratorium period.
- Under Section 80E of the Internal Revenue Code, the interest paid on an education loan EMI is tax deductible.
India’s Top 6 Banks for Education Loans
Educational loans are considered priority sector lending, hence all banks offer educational loan packages.
1. State Bank of India is an educational loan provider.
SBI provides education loans to students who want to further their education in India or abroad. SBI offers two forms of education loans, depending on the amount of money needed.
Student Loan Scheme This scheme allows you to borrow up to Rs 20 lakh in loans. The scheme’s specifics are as follows:
| Maximum Amount | Duration of the Loan | Requirement for a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Rs 20 lakhs | 15 years, excluding a one-year moratorium | For loans up to Rs 4 lakh, there is no interest. For loans above Rs 4 lakh, there is a 5% interest rate for studies in India and a 15% interest rate for studies abroad. | 10.05% fixed | For loans up to Rs 20 lakh, there is no interest. |
SBI Global Education Advantage
This is a loan offered only to those who intend to pursue higher education overseas.
| Maximum Amount | Duration of the Loan | Requirement for a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Rs 20 L – Rs 1.5 cr | 15 years, omitting a one-year moratorium and the course time | Year after year, it’s required. | 10.05% fixed | Rs 10,000 |
On both plans, female applicants will receive a 0.5 percent loan rate reduction. For loans beyond Rs 7.5 lakhs, collateral is required.
2. HDFC Bank is a education loan provider.
The following are the terms and conditions of an HDFC education loan.
| Maximum Amount | Duration of the Loan | Requirement for a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Rs 20 lakhs | Up to 15 yrs excluding moratorium of 1 yr | For loans up to Rs 4 lakh -Nil Above 4 lakh- 5% for studies in India or 15% for studies abroad | 9.55 -13.25% | Rs 1000 or 1% of the loan, whichever is higher |
Collateral is required for loans exceeding Rs7.5 lakh.
3. Education Loan Provider – ICICI Bank
ICICI Bank offers education loans to help many students achieve their goal of obtaining a higher education. ICICI Bank offers loans to international undergraduate students.
For Undergraduate Studies:
| Maximum Amount | Duration of the Loan | Requirement for a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Rs 50 lakh for courses in India and Rs 1 crore for those abroad | 5yrs for loans without collateral and 7yrs with collateral | No margin for loans upto Rs 20 lakh. 5-15% for those above Rs 20lakh | Starts from 11.75% | 1% of the loan amount plus taxes |
For Postgraduate Studies:
| Maximum Amount | Duration of the Loan | Requirement for a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Courses in India cost Rs 50 lakh, while those abroad cost Rs 1 crore. | Loans with no collateral have a six-year repayment period, whereas those with collateral have an eight-year repayment period. | For loans up to Rs 20 lakh, there is no margin. For individuals earning more than Rs 20 lakh, the tax rate ranges from 5% to 15%. | It all starts at 11.25 percent. | 1% of the loan amount, plus interest and taxes |
Loans with no collateral for a small group of institutions: UG courses can cost up to Rs 20 lakh, while PG programmes can cost up to Rs 40 lakh.
4. Axis Bank is a education loan provider.
Axis Bank offers Education Loans for both in-country and out-of-country studies, starting at Rs. 50,000 and with low interest rates. Individuals can choose from a variety of loan options to meet their needs.
| Variant | Maximum Amount | Duration of the Loan |
|---|---|---|
| PRIME ABROAD | Rs 40 lakh | 15 years |
| PRIME DOMESTIC | Rs 40 lakh | 15 years |
| Loan for working professionals | Rs 20 lakh | 10 years |
Rate of Interest: 15.2 percent for loans up to Rs 4 lakh, 14.7 percent for loans between Rs 4 lakh and Rs 7.5 lakh, and 13.7 percent for loans over Rs 7.5 lakh.
Nil up to Rs 10 lakh, Rs 15000+GST for sums up to Rs 20 lakh, 0.75 percent on differential loan amount above 20 lacs + GST.
5. PNB for Study Abroad is an education loan provider.
| Maximum Amount | Duration of the Loan | Requirement for a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Need-based lending that is based on the borrower’s ability to repay | 15 years | For loans up to Rs 4 lakh, there is no margin. 15% for those earning more beyond Rs 4 lakh | Up to Rs7.5L-9.05 percent floating rate depends on repo rate -9.75 percent above 7.5L | 1% of the loan amount, with a minimum of Rs 10,000 |
PNB Udaan is a plan offered by Punjab National Bank that provides education loans to students who want to pursue higher education overseas.
The Top 5 Indian Non-Banking Financial Companies (NBFCs) That Provide Education Loans for Studying Abroad
Many NBFCs, in addition to banks, provide education loans for higher education abroad. NBFC education loans frequently have less stringent eligibility requirements.
NBFCs are also more willing to finance for courses outside of the mainstream. When you take out education loans from NBFCs, the loan processing time may be shortened. However, depending on your credit score and the course you want to take, they may require extra collateral.
NBFCs do not offer EMI payment moratoriums on education loans and charge a higher interest rate than banks.
1. Avanse is a provider of education loans.
Avanse, a new-age education loan provider, was founded in 2013 with the goal of providing seamless loans to Indian students who want to study abroad. The following are the specifics of Avanse’s educational loans:
| Maximum Amount | Duration of the Loan | Requirement of a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Need-based Starting from Rs 1lakh | 10 years including course tenure | No margin required | Avanse Base Rate +Spread Depends on your credit profile and the course undertaken | 1-2 percent of the loan amount, depending on the circumstances |
The amount of collateral needed is influenced by the loan amount as well as other factors.
2. HDFC Credila is a second education loan provider.
HDFC Credila is India’s first specialised education loan, created to help students pursue their dreams of pursuing higher education overseas. Credila can approve you for a loan even before you have a confirmed admission.
| Maximum Amount | Duration of the Loan | Requirement of a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Need-based From Rs 1 lakh onwards | 12 years old | There is no need for a buffer. | Benchmark Lending by Credila (12.55 percent current) Rate+Spread It depends on your credit history, the collateral you’ve supplied, the course you’ve attended, and other factors. | 1-1.25 percent of the loan amount, depending on the circumstances |
3. Tata Capital is a provider of education loans.
Another well-known NBFC that lends educational loans for higher education abroad is Tata Capital.
| Maximum Amount | Duration of the Loan | Requirement of a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| 75,000 to 25 lakhs rupees | 6 years old | There is no need for a buffer. | 10.99% onwards | From there, it’s a percentage of 10.99 percent and above. |
4. Auxilo
Auxilo is a newcomer to the school loan market, but it has already built a reputation for itself by providing educational loans to a large number of students. The following are the major characteristics of the Auxilo education loan:
| Maximum Amount | Duration of the Loan | Requirement of a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| Students’ needs are taken into consideration. | 10 years | There are no margin loans available. | Auxilo base interest rate (now 12.7 percent) plus a spread It depends on your credit history, the collateral you’ve supplied, the course you’ve attended, and other factors. | Up to 2% of the total loan amount sanctioned |
There are also no-collateral loans accessible. If you provide collateral, you can take advantage of special interest rates reserved for collateral-backed loans.
5. InCred is a education loan provider.
InCred is a non-bank financial institution that provides education loans to all aspiring students. The following are the details of their loans for study abroad:
| Maximum Amount | Duration of the Loan | Requirement of a Margin | Interest Rates | Processing Fee Charged |
|---|---|---|---|---|
| 1 crore rupees (Secured ) 40 lakh rupees (unsecured) | 10-15 years | There are no margin loans available. | From 12 percent onwards It depends on your credit history, the collateral you’ve supplied, the course you’ve attended, and other factors. | 1-1.5 percent of the loan amount approved |
You may be able to get a higher rate on an InCred education loan if you provide collateral. In some situations, you may also be eligible for a larger loan amount and have a better chance of getting your loan approved.
Get Loan Assistance From ForeignAdmits
At ForeignAdmits, we understand how important this decision is. We are here to help you every step of the way, from finding the right school to getting admitted and securing scholarships.
ForeignAdmits have a team of experienced counsellors. We can provide you with customized guidance based on your individual needs contact us today to get started. We look forward to helping you achieve your educational and career goals!