Everything You Require for Loan for Study Abroad 2025

Public Sector Banks (PSBs) have observed a growth of 14.8 percent in the education loan, meaning that INR 28,699 crore of the loan amount was disbursed in 2023-2024. These funds help many students access education opportunities in India and abroad. If you also want to study at prestigious institutions in the US, UK, Canada, or elsewhere globally. But, struggling with finances, read this blog to get a loan for study abroad and make your abroad education easy.

When considering education loans, candidates need to compare education loans from different types of providers. There are four types of education loan providers.

Public banks:

Public banks are government-owned financial institutions. They often have low interest rates and special schemes for students pursuing higher education. Due to their government backing, these loans for study abroad are typically considered more secure and reliable.

Private banks:

Private banks are privately owned financial institutions. They may have slightly higher interest rates than public banks. Private banks often provide more personalized services and may be more flexible in offering education loans tailored to specific needs.

NBFCs:

NBFCs are non-banking financial institutions that offer education loans as part of their financial services. They can be an alternative to traditional banks and sometimes offer loans with more relaxed eligibility criteria. 

International lenders:

International lenders are financial institutions to students based on their country and course. They offer flexibility in the terms, interest rates, and eligibility criteria. They are the best option for the student if they don’t have the co-signer and collateral.

 

There are two primary types of abroad education loans: secured loans and unsecured loans.

Secured education loans:

Secured education loans require the borrower to provide collateral, which is an asset of value (e.g., property, fixed deposit, or other assets) to secure the loan. This collateral serves as a guarantee to the lender that the loan will be repaid.

 

You can get an education loan for your fixed deposits, Read here.

Unsecured education loans:

Unsecured education loans do not require the borrower to provide collateral. Instead, the lender assesses the borrower's creditworthiness based on factors such as credit history, income, and co-signers (if applicable).

 

Many lenders provide some key benefits when you get an education loan for study abroad. However, these factors will influence the documentation and your decision-making of the applicant: 

 

 

You might be confused about the top lenders, however, here are some popular lenders that students prefer for loans for study abroad. 

Note: The interest rates are subject to change according to market rates. These rates are updated on Jan 2025.

From loan application to approval and disbursement, the entire loan process is time-consuming, to streamline the student loan application process, it's advisable to begin early. To answer the question “How to take student loan to study abroad?” follow these steps:

Step 1: Research your options:

Before “How to get an education loan?” hits you, research is important therefore, just a branch visit can’t help. You must explore various financing options available, including government banks, private banks and lenders, and scholarships. Each option has its eligibility criteria, interest rates, and repayment terms. 

Step 2: Choose your destination and institution:

How to take education loan? The answer is not too straightforward because the loan approval process depends on your country and university. Some lenders may have specific loan programs for particular countries or institutions. Ensure your chosen destination and university are eligible for the loan program you're interested in.

 

How to get student loan from leading banks? Refer to our ICICI Bank, Axis Bank, and IDFC First Bank loan process blogs and learn about everything from the process to their pre-approved lists of colleges and universities. To learn more about read:

 

• 
  Abroad education loans from ICICI Bank
• 
  Abroad education loans from AXIS Bank
• 
  Abroad education loan from IDFC First Bank

Step 3: Calculate your expenses:

Estimate your total expenses, including tuition fees, accommodation, living costs, and other miscellaneous expenses. This step is crucial in determining the loan amount you need. Create a detailed budget plan to ensure you're borrowing an amount that covers all your financial needs.

 

Also read: Expenses Covered under an Education Loan

Step 4: Understand eligibility criteria:

Different lenders and loan programs have varying eligibility criteria. Typically, you'll need to meet the following criteria:

 

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  Admission to an accredited institution: You must have an acceptance letter from a recognized university.

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  Creditworthiness: Lenders will assess your credit history, income, and co-signer (if applicable).

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  Co-signer (if required): Some lenders may require a co-signer, typically a family member or guardian with a good credit history, to support your application.

To get an education loan abroad, the following general criteria must be met however, specifics may vary by lender:

Nationality:

The applicant must be a citizen of India and have the necessary identification documents. 

Age:

For education loans, many lenders require applicants to be between 18 and 35. Yet, some lenders provide loans to students above the age of 35. 

Course and Institution:

Courses must be full-time and listed in the lender’s approved list. But, the best part is that lenders have different categories including different universities, therefore, covering almost all the universities. 

Academic Performance:

A good academic track record is required for unsecured loans and gives a sense of security to the lender regarding repayment of the education loan. 

Loan Amount:

An applicant should calculate the loan amount required to sponsor their studies abroad. Also, know the lender’s maximum loan amount, so you can align with the lender’s maximum loan limit.

Repayment Capacity:

The applicant or co-applicant must showcase the ability to repay the loan through stable income or assets. 

Co-applicant:

A co-applicant can be your parent, sibling, or spouse, who shows creditworthiness and income for the education loan. They play a crucial role in getting a loan approval. 

Co-applicants and guarantors play an important role in securing an education loan, specifically for the unsecured education loan. A co-applicant and guarantor may be required to submit additional documents such as income proof, bank statements, and tax returns to help assess their financial capability. But, how does their involvement affect your education loan approval? 

Co-applicant:

The co-applicant for an education loan is someone who shares the responsibility of loan repayment if the primary applicant defaults.

 

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  Eligibility: Applicant is a student and if they lack the financial history or earning capacity, the co-applicant’s financial background is required.

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  Loan Amount: The co-applicants income is required to calculate the loan amount, thus higher income and fewer obligations can help the applicant increase the loan limit.

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  Approval Process: A stable financial background or a high credit score makes the loan approval process smoother and faster.

Guarantor:

A guarantor is backup security for the lender in case both the applicant and the co-applicant fail to repay the loan. However, the guarantor is not mandatory for every lender, it can be necessary in a few cases such as;

 

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  Unsecured Loans: When you are getting an education loan without collateral, lenders may require a guarantor to minimize risk.

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  Creditworthiness: The credit history may make the loan application of weaker applicants stronger, hence, making it easier to secure the loan.

You can refer to the table below to create a checklist of the documents required for the education loan.

Also read: Education loan eligibility criteria

Step 5: Research loan terms:

Review the terms and conditions of the loan for study abroad carefully. Pay close attention to interest rates, repayment schedules, and grace periods. Understand the difference between fixed and variable interest rates and choose the one that suits your financial stability and risk tolerance.

Step 6: Apply for loans:

Once you have selected the lender and understood the terms, it's time to apply for the loan. Most lenders offer online application processes, making it convenient to apply for a loan to study abroad. Be sure to double-check all the information you provide to avoid any delays.

Step 7: Compare loan offers:

If you receive multiple loan offers, take the time to compare them. Consider factors like interest rates, repayment terms, and any additional benefits or fees. Choose the loan that offers the most favorable terms for your financial situation.

Step 8: Plan for repayment:

Always ask the loan counselor about the repayment plan to align it with your financial capability. This planning is required otherwise, it might affect your pockets over a longer tenure.

 

Read about: How to plan your education loan repayment?

Step 9: Confirm with the University:

Many loan for study abroad are not processed by their university therefore, before saying “Yes” to the disbursement confirm it with the university. This will prevent you from getting charged for the unrequired interest rate. 

 

Applying for multiple lenders at the same time for the loan for study abroad. It can be a hectic process and also consume lots of work however, you can prevent this by applying for an education loan through GyanDhan. You can win half the battle as GyanDhan evaluates your profile and selects the best lender for you. Here are the five simple steps to get an education loan:

 

Step 1: Check your loan eligibility.

 

Step 2: An expert education loan counselor will evaluate your profile.

 

Step 3: Team GyanDhan will either arrange a doorstep pickup for your documents or you will receive a customized checklist to upload.

 

Step 4: Once the documents are uploaded, GyanDhan will proceed with the rest of the formalities.
 

Step 5: The bank will disburse the amount as per schedule.

 

 

Securing an education loan for studying abroad can be a complex process, but with expert advice, it is entirely achievable. By understanding your financial needs, eligibility criteria, and terms and conditions, the GyanDhan team suggests the best loan program for you. Not only this, we provide you with a customized document list that ensures a complete file.

 

So, if you are on the lookout for a hassle-free student loan experience with the added advantage of expert assistance, don't hesitate to give GyanDhan a try. We are here to help you achieve your academic goals without any financial stress. To start your education loan journey with us, check your education loan eligibility.

 

Additional Read:

• 
  Education loan from ICICI Bank
• 
  Education loan from Axis Bank
• 
  Education loan from IDFC First Bank 
• 
  Student loan applications in public banks
• 
  Student loan applications in private banks