Key Highlights
- Understand the education loan process for international studies
- Compare secured and unsecured loans for Indian students
- Learn how to apply for an education loan for abroad studies effectively
- Discover interest rates, repayment options, and government schemes for 2025–26
- Get practical tips to improve your loan approval chances
Introduction
Studying abroad opens doors to world-class education and global opportunities, and also significant financial commitment. Accounting for tuition fees to living costs, most Indian families turn to education loans as a practical way to fund higher education abroad.
The good news is that today, obtaining an education loan for studying abroad is more accessible than ever before. With banks, NBFCs, and even Fintech lenders offering customised products for international students, the process has become streamlined and transparent. Understanding the fine steps and preparing early can make all the difference between a quick approval and a delayed or a rejected application.
Why an Education Loan Is More Than Just Financial Support
Before looking into the process, it is worth pausing to understand why an education loan is not simply a source of funds, but a calculated investment in your long-term growth.
Education loans allow students to build financial responsibility early, maintain family savings, and access premium universities that may otherwise seem out of reach. Furthermore, lenders now structure their offerings with flexible repayment tenures, moratorium periods (repayment starts 6–12 months after graduation), and even options for co-applicants living abroad.
In short, the modern education loan process enables students to focus on academic success while lenders handle the financial logistics.
Step-by-Step Guide: How to Get an Education Loan for Abroad Studies
Step 1: Assess the Total Cost of Education
Begin by calculating your total estimated expenses. This includes tuition fees, accommodation, travel, insurance, visa costs, and living expenses. Most lenders finance 85–100% of the total cost depending on your eligibility and collateral type.
Mentora Tip: Keep official fee structures, offer letters, and estimated living expenses handy. Banks require these documents to validate your loan amount.
Step 2: Check Eligibility Criteria
Before you apply for an education loan, understand the common eligibility requirements:
- Indian citizenship
- Admission confirmed to a recognised university abroad
- Strong academic record
- Co-applicant with a stable income (usually a parent or guardian)
- Collateral (for secured loans) such as property or fixed deposits
Some lenders also assess the employability potential of your chosen course when deciding the loan amount.
Step 3: Choose Between Secured and Unsecured Loans
There are two primary types of education loans for studying abroad:
| Type | Description | Typical Loan Amount | Interest Rate (Indicative) | Repayment Tenure |
| Secured Loan | Requires collateral (ex: house, FD, insurance policy) | Up to ₹1.5 crore | 9–11% | Up to 15 years |
| Unsecured Loan | No collateral required; depends on credit profile | Up to ₹75 lakh | 10.5–13.5% | Up to 10 years |
Mentora Tip: If you have a strong co-applicant and high creditworthiness, unsecured loans can be just as competitive as secured ones.
Step 4: Compare Lenders and Interest Rates
Evaluate multiple options before finalising. Banks like SBI, HDFC Credila, Axis Bank, ICICI Bank, and NBFCs offer attractive products. Additionally, government-backed schemes like the Vidya Lakshmi Portal simplify the education loan apply process through a unified online platform.
Factors to compare include:
- Interest rates (fixed or floating)
- Processing fees
- Moratorium period
- Prepayment flexibility
- Overseas disbursement policies
Step 5: Gather Required Documents
You will need the following documents during the education loan process:
- University admission letter
- KYC documents (Aadhaar, PAN, passport)
- Academic records (Class 10/and 12th/and Degree certificates)
- Fee structure or estimate from the university
- Income proof of co-applicant (salary slips, ITR, bank statements)
- Collateral documents (if applicable)
Having complete and verified paperwork significantly accelerates approval.
If you’re planning to finance your studies, here’s a guide on the key documents needed to apply for an education loan abroad.
Step 6: Submit the Application
Once ready, apply for an education loan for study abroad through your preferred bank’s branch in-person or visit their online portal. The lender will evaluate your academic background, course ROI (Return on Investment), and repayment capacity.
After preliminary verification, you will receive a sanction letter specifying the loan amount, interest rate, and disbursement terms. This is an essential document for visa applications.
Step 7: Loan Disbursement and Repayment
After visa approval and university enrolment, the bank disburses funds directly to the university or your foreign account. Repayment generally begins 6–12 months after course completion, allowing students time to find employment.
Many banks also offer interest subsidies during study periods or flexible repayment options for overseas employment.
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Key Factors Influencing Loan Approval
- University Reputation and Course ROI: Top-ranked universities often attract quicker approvals.
- Co-Applicant’s Financial Strength: A stable income source builds lender confidence.
- Academic Consistency: Strong marks demonstrate discipline and reliability.
- Collateral Quality: For secured loans, clean ownership documentation is crucial.
How Mentora Overseas Supports Your Education Loan Journey
Mentora Overseas Education partners with leading banks and NBFCs to simplify every stage of the education loan process. Our expert counsellors help you identify the most suitable lender, prepare required documentation, and maximise your loan eligibility. Right from comparing options till obtaining a sanction letter in time for your visa, Mentora ensures that finances never stand in the way of your study abroad goals.
Conclusion
Securing an education loan can be feel overwhelming & stressful in some cases, but with proper guidance and preparation, it becomes a smooth process. At Mentora Overseas, we help students understand every step — from choosing the right lender to preparing the required documents — so you can confidently finance your study abroad journey.
Frequently Asked Questions
How early should I start the education loan process?
Start at least 3–6 months before your university deadline to allow time for approval and disbursement.
Is collateral mandatory for an education loan for studying abroad?
No. Many banks offer unsecured loans based on your co-applicant’s profile and credit score.
What is the typical repayment period for education loans?
Tenures range from 7 to 15 years, with a moratorium period until you finish your course.
Can I get an education loan without confirmed admission?
You can begin the process, but disbursement will only happen after you receive the official offer letter.
How does Mentora Overseas help with the loan process?
Mentora provides end-to-end support in lender selection and document preparation to securing the sanction letter and ensuring timely disbursement.
