Education Loan for Studying in Germany: Everything You Need to Know

Studying in Germany is an attractive option for many international students. Germany offers high-quality education, a rich cultural experience, and various job opportunities. However, financing your education can be a challenge. Candidates should be aware of education loans before applying for studying in Germany. 

Studying in Germany is becoming a popular choice for Indian students. Nearly 50,000 Indian students are enrolled in German universities, which is more than double the number from just five years ago. One reason for this growth is that many public universities in Germany do not charge tuition fees, making it an affordable option for students. However, even though tuition may be low, students still need to think about living expenses and other costs, such as the blocked account requirement of €11,904 needed for visa applications.

For many Indian students, getting an education loan is an important step in funding their studies abroad. There are different types of loans available specifically for studying in Germany. Some banks offer loans without requiring collateral, which is helpful for students who may not have assets to secure the loan. These education loans can cover various expenses, including tuition fees, living costs, and study materials.

It’s important for Indian students to understand the different education loan options available to them when planning to study in Germany. Many banks provide education loan calculators for abroad studies to help students estimate how much money they might need to borrow based on their individual needs. Additionally, international students need to know how to apply for these loans and what requirements they must meet. In this article, we will cover everything you need to know about education loans for studying in Germany.

International students opting to pursue their higher education can expect to experience cultural diversity, friendly natives and a high quality of education. A major education favorite, students would be pleased to know that the majority of public universities in Germany have had their tuition fees waived off. The students would be required to pay only an administrative fee at the beginning of each term. The living costs in Germany is considered moderate, thus putting less financial pressure on Indian students wanting to study abroad.

To make living even further affordable, international students will also have the opportunity to work part-time to ease their living expenses. International students are eligible to work 20 hours per week. This part-time work facility will not only help them ease their living expenses but also allow them to gain relevant work experience in their field of interest. As with most universities, international students can also benefit from the various scholarship programmes listed on the official website of universities or www.daad.de. Germany is home to a world-recognized education system, excellent industry interface, an innovative and research-based environment and multicultural prospects that make the country an excellent choice for students wanting to study abroad.

Types of Education Loan in Germany

If you want to study in Germany and need financial help, you can take an education loan to support your studies. There are two main types of education loans available, secured and unsecured.

• Secured education loan: This type of loan needs you to give something valuable as security. It can be movable assets like fixed deposits or LIC policies, or immovable assets like a house, flat, or land (not agricultural). In India, most public banks ask for collateral to give a loan for studying abroad.
• Unsecured education loan: This loan does not need any collateral, so it is also called a loan without collateral. But since there is no security, the bank takes more risk. That’s why interest rates for these loans are usually higher. Also, this type of loan needs a co-applicant like your parent, sibling, or spouse, and the loan amount depends on their income and CIBIL score.

List of Lenders Providing Education Loans to Study in Germany

There are many lenders that offer education loans for studying in Germany. These include public banks, private banks, NBFCs, and even international lenders. To help you understand better, we have created a comparison of lenders and their loan features. This will help you choose the right lender for your education loan.

Education Loan for Germany with Collateral

Education Loan for Germany without Collateral

Process for Applying For an Education Loan

Procuring an education loan for Germany is as simple as getting an education loan for any other study abroad destinations. The process is the same, with simple modifications. Universities in Germany induct students twice in a calendar year, January and September. Once students have secured admission to the university of their choice, their next big hurdle would be to arrange the funds required for their educational expenses. The cost of studying in the country is extensively cost-effective, with students having to pay no tuition fees for its undergraduate courses and rather minimal tuition fees for its graduate courses.

Students and families looking to avail the student loan would be happy to know that in India numerous Banking and Non-Banking institutions offer education loans at a low rate of interest to commendable students to pursue their higher education overseas. Applying for a student loan has evolved since its introduction and students and their parents looking to apply for the Loan can do so easily. However, before applying for the loan, there are certain particulars that must be kept in mind. Sometimes to acquire a loan may require a collateral as security but this is strictly on a case to case basis. In most of the cases, there would usually be a co-applicant which could be your parent, sibling, in-laws or spouse.

Also, read:

• SBI Education Loan for Study Abroad: Ultimate Guide
• Student Guide to Germany
• Studying Abroad attracts tax collected at source (TCS) of 0.5 and 5%

Eligibility criteria to apply for an education loan to study in Germany

• The student is required to be a citizen of India
• The student must have obtained admission to a university/ course that is recognized by the funding institution and eligible for grant
• The student must have attained the age of 18 years or his/her parents should apply for the loan.
•  The applicant must have secured admission to a job-oriented course. 

Documents Required to Apply for an Education Loan for Germany (2025)

Nationalized banks such as State Bank of India (SBI) provides Education Loan to deserving students who wish to go to Germany for higher studies. However, before the bank is able to process the loan amount, there is a list of documents that need to be furnished by the borrower. These include:

• Letter of admission from the college/University
• Loan application form filled out in full
• Documents on the cost of studies
• Identification proof
• Residence proof
• PAN details of the borrower
• Guarantor/co-borrower’s/student's bank statements
• Guarantor/co-borrower’s/student's statement of assets
• Guarantor/co-borrower’s/student's proof of income

Expenses covered under the loan include

The university, at the time of admission, would provide you with documents that would clearly mention the fee as well as the entire amount required for completion of the intended course. Please note that while universities in Germany do not charge a tuition fee, there are other expenses that students come across during their stay in the country, and which are taken care off under the loan amount. However, the loan sanctioned by an institution would be solely for education purposes and not cover personal expenses. Candidates can visit our website to apply to India's top education loan providers through Shiksha Study Abroad. The loan amount sanctioned would take care of:

• Tuition fees (if any)
• Accommodation expenditures
• Caution deposit money (security)
• Travel expenses 
• Study tours and project work during the academic year
• Purchase of books, laptop, and stationary
• Other reasonable expenses that would be required to successfully complete the course

Blocked Account

Education in Germany is a very serious affair and they have everything calculated to the last cent. Every year, according to the prevailing economic conditions as well as the relevant fee structure, the university would request that a monthly sum is provided for the student to facilitate his living expenses in the country as well as completing his education, This is called a Blocked Account amount. This usually varies from state to state and ranges from €992 per month. This would include your accommodation, living expenses, and even travel pass costs.

Once students reach Germany, they are required to open a Student Loan Account with a local bank where they are required to deposit the ‘Blocked Amount’ for the entire calendar year. Every month they would be allowed to withdraw the sanctioned monthly amount to cover their monthly expenditures. This is a mandatory practice applicable to all international students who choose to pursue higher education in Germany.

Repayment

As mentioned earlier, international students will have the opportunity to work part-time to ease their living expenses. International students would be eligible to work 20 hours per week. Moreover, after the completion of their total course duration, students have the option of applying for an 18-month Residence Permit to look for a job that corresponds to their area of qualification. During these 18 months, they can take up any kind of employment to support themselves and fund their job search.

Students who have applied for an education loan from a nationalized bank are required to start the repayment process after the completion of the course period and moratorium period (Repayment commences one year after the course completion or 6 months after securing a job, whichever is earlier). However, students should understand the moratorium time varies for different loan-providing institutions. Candidates looking for assistance with university admissions can get in touch with our Shiksha Study Abroad Counsellors on our website. 

Top Business Schools in Germany

In this section, we are going to take a look at the top business schools in Germany. 

• WHU - Otto Beisheim School of Management
• HHL Leipzig Graduate School of Management
• University of Mannheim
• Munich Business School
• Frankfurt School of Finance & Management
• European Business School Munich
• Jacobs University Bremen

Loan Options for Germany: Comparison Table 

Also read:

• Germany Student Visa Guide
• Best Student Cities in Germany
• Popular Job Sectors in Germany
• Studying in Germany: All you need to know
• 7 Steps to Study in Germany for Free