Many students want to study abroad but don’t have enough money to pay the fees. So, many banks offer education loans to help those students. An abroad study loan is a financial aid option designed to help students cover the costs of pursuing higher education overseas. These loans can be secured or unsecured, and they typically offer flexible repayment terms and competitive interest rates.
Key Features of Abroad Study Loans
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Eligibility: Eligibility criteria vary among lenders, but generally require applicants to be Indian citizens, have a good academic record, and have secured admission to a recognized university abroad.
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Loan Amount: Loan amounts can cover up to 100% of the total education expenses, including tuition fees, living expenses, travel expenses, and other miscellaneous costs.
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Repayment Options: Repayment typically begins after a moratorium period, which can be extended up to six months after completing studies. Flexible repayment options, such as EMI plans, are available.
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Interest Rates: Interest rates for abroad study loans are typically floating, linked to benchmark rates like the RBI’s repo rate.
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Collateral: Secured loans require collateral, such as property or fixed deposits, to lower interest rates and increase loan eligibility. Unsecured loans may be available for deserving students.
Interest Rates of Different Banks for Abroad Study Loan
| Bank Name | Interest Rate |
| State Bank of India | 8.15% to 11.75% |
| Punjab National Bank | 9.25% to 11.25% |
| ICICI Bank | 10.85% to 12.50% |
| Axis Bank | 13.70% to 15.20% |
| Bank of Baroda | 9.70% to 11.15% |
| Allahabad Bank | 12.50% onwards |
| HDFC Bank | 9% to14 % |
| Indian Bank | 8.85% to 10.75% |
| Union Bank of India | 8.70% and above |
Benefits of Abroad Study Loans
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Financial Assistance: Provides financial support to pursue higher education abroad.
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Flexible Terms: Offers flexible repayment options and moratorium periods.
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Competitive Interest Rates: Provides loans at competitive interest rates.
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Tax Benefits: Tax deductions are available under Section 80E of the Income Tax Act for interest paid on education loans.
Considerations Before Applying
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Thorough Research: Carefully research and compare loan options from different lenders to find the most suitable one.
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Financial Planning: Create a detailed budget to ensure you can manage the loan repayment after your studies.
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Explore Scholarships: Apply for scholarships and grants to reduce the financial burden of studying abroad.
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Seek Guidance: Consult with education consultants or financial advisors for personalized guidance.
Eligibility for Apply Abroad Study Loan
- Must be an Indian citizen.
- The target university or college to which you are admitted must be from the list approved by the Bank.
- The co-applicant must be one of these only – Father, Mother, Brother, Sister, Spouse (Husband/Wife), and Maternal/Paternal Uncle.
- Applicant’s age must be between 16 – 35 years.
Nupur Tanan
"Nupur Tanan" works at Financewisdom.in. She has experience in writing a vast range of varied content. She write knowledgeable, well-researched, and engaging articles on various personal finance and banking related topics.