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10 Must-Know Loan Facts for the Right Student Education Loan to Study Abroad

Saumya Singh      December 27, 2022

About this article

Quality education has an important role in shaping your future. However, quality education does not come cheap. Indian students, driven with ambition and brighter career prospects are increasingly seeking to study at foreign universities. There is a plethora of options when it comes to higher educational institutes abroad. However, funding remains a crucial aspect of selecting a course. This is where education loans for students can play a significant role. 


Before you can indulge in acquiring a loan for your study abroad, keep in mind these must-know loan facts:  


  1. Individuals between 18 and 35 years can apply for education loans study abroad at pre-approved institutions. 
  2. Students can get loans for management courses, healthcare courses, engineering courses, as well as multiple graduation and post-graduation programs. 
  3. Borrowers need to pay a margin of 5% to 15% for education loans to study abroad. 
  4. Your loan will have a moratorium period or holiday period, only after which you will be required to start with your EMIs. This period could last up to the duration of the course or up to the time period till you find employment and varies from bank to bank.
  5. Education loans for students can be repaid via monthly instalments through ECS or post-dated cheques to the bank. 
  6. Banks approve education loans for a period of 7 years, including the moratorium period.
  7. There can be a co-applicant, however, the student is the primary borrower. A co-applicant can be a spouse, a parent or a sibling. There is usually a collateral security deposit for loans.
  8. For studying abroad, a student must also look for part-time jobs or sponsorship as the loan amount itself is not enough.
  9. Insurance is compulsory for studying abroad.
  10. In case of non-repayment, the student’s own credit history as well as his co-applicants history gets affected.



Popular banks offering education loans in India

  • State Bank of India
  • Axis Bank
  • United Bank of India
  • HDFC Bank
  • Avanse Financial Services
  • Credila (HDFC Bank Company)
  • ICICI Bank
  • Indian Overseas bank
  • Punjab National Bank
  • Dena Bank
  • Vijaya Bank etc.


When deciding upon which bank provides the best interest rate for the education loan, keep in mind that, education loan is more like an investment. Low interest rate, even if it is 0.5% less, along with a longer repayment period is more helpful. So, it is very essential that you should carefully study and understand the conditions for applying in different banks before choosing the most favourable bank. You should usually choose a bank which provides the facility for extension of the repayment tenure in case of delay under unforeseen circumstances.


Also, know in detail what does your education loan cover? The loan amount does not come to you. It goes directly to the institution where you want to study, at the beginning of each semester. Hence, it should cover all the benefits and services offered so that you do not have to incur any additional costs.

Saumya Singh
Saumya Singh

Content Writer

Saumya is an enthusiastic reader with a keen inclination toward literature, academics, and marketing. Ideas, strategy, and impact are what keep her belief in marketing intact. Oh, and playing with content is her hobby.

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