Best Education Loan in India to Study Abroad in 2027
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Which are the best education loan in India for studying abroad? We have explained loan types. It includes features of the loan, eligibility, and documents. This makes it easier for you to compare different options. So, you can choose the correct loan for their studies.
The best education loan in India for study abroad depends on your collateral profile. Public banks (SBI, BoB, Union Bank) offer the lowest secured rates from 8.65% to 10.50%. Private banks and NBFCs offer collateral-free loans up to 75 Lakhs.
- Maximum Sanction Limit: Up to 1.5 Crores to 3.0 Crores with physical collateral at public lenders. Up to 50 Lakhs to 75 Lakhs without collateral via private lenders and NBFCs (Depends on your profile).
- Interest Rates: Floating rates between 8.65% and 10.75% p.a. for public sector banks. 10.25% to 13.50% p.a. for private lenders and NBFCs.
- Moratorium Terms: Full course duration plus 6 to 12 months grace period before monthly EMI payments start.
- Margin Money: 0% for premier category global universities; 10% to 15% for other foreign institutions.
- Tax & TCS Benefits: 100% tax deduction on interest paid under Section 80E for up to 8 years, and a low 0.5% TCS under LRS on education loan remittances exceeding 7 Lakhs.
Securing the best education loan in India for studying abroad is the most viable way for Indian students to finance foreign degrees. Comprehensive student loan products cover international tuition fees, university accommodation, flight tickets, equipment, and required overseas living expenses.
- Best Education Loan in India
- Types of Student Loans for Studying Abroad
- How to Get Education Loan for Abroad Studies 2027: Step-by-Step Guide
- Eligibility Criteria for Best Education Loan
- List of Documents Required for Student Loan in India
- Best Education Loan in India FAQs
Best Education Loan in India
Low-interest rates, student-friendly rules, more moratorium periods for student loans, and easy repayment options are the key points to finding the best education loan in India. At the time of a study loan application, most students in India prefer government student loans over those offered by private institutions due to lower interest rates and better repayment terms. It is always advisable to start planning your education loan early. For that, you should know when to start thinking about finances to study abroad.
Here we have mentioned a table to help you understand the current interest rates of Indian Banks.
| Bank | Rate of Interest (approx.) | Maximum Loan Amount (approx.) |
|---|---|---|
| State Bank of India (SBI) | 8.65% - 11.15% | Up to 1.5 Crore |
| Bank of Baroda (BoB) | 8.70% - 10.75% | Up to 1.5 Crore |
| Punjab National Bank (PNB) | 9.25% - 11.25% | Up to 1.5 Crore |
| Union Bank of India | 9.30% - 11.75% | Up to 1.5 Crore |
| Indian Overseas Bank | 9.75% - 12.75% | Up to 40 Lakhs (Higher with collateral) |
| Canara Bank | 9.50% - 10.35% | Up to 1 Crore |
Types of Student Loans for Studying Abroad
When searching for the best education loans in India to study abroad, students can choose between secured and unsecured options depending on their financial background. These can be taken from banks, financial institutions, and other lending agencies to support your dream. Before you proceed to apply for student loans in India, here are certain things to know before applying for an education loan to study abroad.
Secured vs. Unsecured: Selecting the Best Education Loan for Abroad Studies
Before applying, students must assess whether a secured loan or an unsecured loan offers the best education loan for abroad studies based on their family's asset portfolio.
| Feature | Secured Loan (With Collateral) | Unsecured Loan (Without Collateral) |
|---|---|---|
| Security Pledged | Immovable property (house, flat, non-agricultural plot) or liquid assets (FDs, LIC surrender value). | None. Approvals rely on co-borrower income, CIBIL score, and student academic merit. |
| Interest Rates | Lowest available (Starting from 8.65% to 10.00% p.a.). | Higher risk-adjusted spread (Starting from 10.25% to 13.50% p.a.). |
| Loan Amount | High borrowing capacity up to 1.5 Crores to 3.0 Crores. | Capped between 40 Lakhs (Banks) and 75 Lakhs (NBFCs). |
| Approval Timeline | 14 to 25 working days (Includes property legal title and valuation checks). | 3 to 7 working days via digital underwriting. |
How to Get Education Loan for Abroad Studies 2027: Step-by-Step Guide
Learn how to get education loan for abroad studies without delays or visa issues. Follow these 7 clear steps to get approved and receive your funds on time:
- Get Your Admit Letter and Cost Sheet: Secure your university offer letter. Download the official cost breakdown (I-20, CAS, or estimate sheet) showing exact tuition fees, room costs, and health insurance.
- Choose Your Loan Type: Pick a government bank (SBI or Bank of Baroda) for the lowest interest rates if you have property to pledge. Pick private banks or NBFCs (Axis, ICICI, HDFC Credila) if you need a collateral-free loan up to INR 50 to INR 75 Lakh with fast approval.
- Apply Online: For public banks, register on the Vidya Lakshmi Portal and fill out the common application form. Select up to three bank schemes. For private lenders, apply directly on their official websites.
- Upload Required Documents: Submit your marksheets (10th, 12th, degree) and test scores (IELTS, TOEFL, GRE). Add your co-borrower’s income proof: 3 months' pay slips, 2 years' Form 16/ITR, and 6 months' bank statements.
- Complete Property Checks (Secured Loans Only): Hand over original property papers to the bank. The bank’s lawyer checks property titles, and an engineer verifies property value on-site.
- Collect Your Sanction Letter: The bank issues your official loan sanction letter once your file passes credit checks. Use this letter as proof of funds for your student visa interview and university clearance.
- Sign Agreement and Receive Funds: Sign the final loan contract. The bank wires tuition fees straight to your university. They send living costs to your overseas blocked account, GIC, or student forex card.
Choosing the best study loan in India to study abroad involves more than just interest rates.
Quick Comparison: Self-Funded vs. Education Loan
| Feature | Self-Funded (Savings) | With Education Loan |
|---|---|---|
| Tax Benefit | None | High (Section 80E) |
| TCS Rate | 2% (on amounts >10 Lakh) | 0.5% or 0% |
| Upfront Cash | Full amount required | Low/Nil |
| Visa Ease | High documentation | Simplified Proof of Funds |
Eligibility Criteria for Best Education Loan
The eligibility criteria for student loans vary from bank to bank. However, we have mentioned some eligibility criteria for student loans in India.
- Age: Must meet the lender's age criteria. 18 to 35 Years.
- Academic Record: A good academic record is preferred. 60% in 10th and 12th.
- Admission: Confirmed admission to a recognised institution.
- Co-applicant: Must meet the lender's income and credit requirements. 720 or above.
- Collateral: May be required for secured education loans.
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List of Documents Required for Student Loan in India
Here is the list of required documents for student loans that students need to keep handy at the time of application.
- Valid ID card approved by the government, such as PAN/ Passport/ Driver’s License/ Voter ID card
- Proof of Residence/ Address (either): Recent copy of utility bill
- Income Proof of applicant or co-applicant
- Valid Indian Passport
- Academic Records
- Entrance Exam Results such as GMAT, GRE Exam, TOEFL, and IELTS.
- Proof of admission, including the offer letter or admission letter from the university
- Statement of cost of study/ Schedule of expenses
- 2 passport-size photographs
This concludes our guide on finding the best education loans in India to study abroad. We have covered all the required information about the topic related to the query of a student who is going to study abroad.
Best Education Loan in India FAQs
Commonly asked questions
Applicants with good academic scores and a family income of less than INR 8 Lacs per year are eligible to apply for government education loan schemes. Additionally, admission to a recognised institution, age limit, and Indian citizenship are crucial eligibility factors.
The best bank for education loans in India for studying abroad is often the State Bank of India (SBI). It's a public sector bank which offers student loans with attractive ROI. Other than this, Punjab National Bank, Bank of Baroda, HDFC Bank, and ICICI Bank are some reputed banks which offer education loans.
Under its Global Ed Vantage scheme, you can avail up to INR 1.5 crore. Also, with flexible repayment up to 15 years. Comparing terms and rates based on your specific needs is advised.
Yes, you can get it easily. Many Indian banks and NBFCs offer education loan without collateral for MBBS studies, especially for reputed universities.
The maximum collateral-free limit is not same for every lender. It generally falls between INR 7.5 Lacs to INR 75 lakh, depending on the lender and your eligibility.
Repayment does not start immediately. It typically begins after a "moratorium period," which covers your course duration plus one year (or sometimes 6 months after securing a job). This flexible repayment term allows you to find employment before you start paying back the monthly EMIs.
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Raj Vimal is an education writer and editor with over 8 years of experience. He helps Indian students find the right universities, visas, and courses abroad. Currently, he leads content strategies at InfoEdge India
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