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Study Abroad Educational Loans for Indian Students


  • What is a Study Abroad Educational Loan?
  • Indian Student educational loan eligibility
  • Documents required to apply for a loan
  • Tips to follow before applying for educational loans
  • Components of loans granted by banks

Studying abroad is a dream for many students. However, these dreams are sometimes shattered due to the lack of funds or finances. Studying abroad can be an expensive affair which entails several heads of cost. Study Abroad Educational Loans will help to fill the financial lack for students for abroad education

  • College tuition fees
  • Boarding and lodging in a foreign country
  • Travelling expenses
  • Visa costs
  • Miscellaneous expenses

Managing funds for all these heads can be a difficult task. However, all is not lost. Students can apply for loans to overcome financial burdens while studying abroad.

A loan is defined as the lending of money by one party to another on the understanding that the borrowing party will return the loan amount with interest to the lending party within a stipulated period.

Here, the borrower shall be in debt to the lender as long as the loan amount remains outstanding in the books of accounts.

Now, you may ask how to get a loan for abroad studies. This question entails a detailed step-by-step procedure.

A personal meeting with your study abroad consultant will be able to give you a deeper insight into the details of how to get loans for your studies abroad.

However, through this blog, we have tried to give you a rough idea of what you may encounter during the process. These are some of the steps in how can you get a student loan to study overseas.

Study Abroad Loan Eligibility For Indian Students


The first thing students should know is student abroad loan eligibility.

If you find yourself fulfilling the following criteria, then you are eligible to apply for a student loan to study in a foreign country

1. The Student Must Be a Citizen of India

A citizen is a person who is regarded as an integral part of a country. A person’s citizenship in India is governed by the rules laid down in the Citizenship Act 1955. According to the Act, citizenship of India can be acquired in the following ways:

  1. Citizenship at the commencement of the Constitution
  2. Citizenship by birth
  3. Citizenship by descent
  4. Citizenship by registration
  5. Citizenship by naturalization
  6. By incorporation of territory (by the Government of India)
  • People who were domiciled in India as of 26th November 1949 automatically became citizens of India by citizenship at the commencement of the Constitution.
  • Persons born in India on or after 26th January 1950 but before 1st July 1987 are Indian citizens.
  • A person born after 1st July 1987 would be an Indian citizen if either of the parents were a citizen of India at the time of birth.
  • Persons born after 3rd December 2004 are Indian citizens if both parents are Indian citizens or if one parent is an Indian citizen and the other is not an illegal migrant at the time of birth.
  • Citizenship by birth is not applicable for children of foreign diplomatic personnel and those of enemy aliens.
  • Another student loan eligibility criterion is that students must be 18 years or above (if the student is below 18, the loan shall be in the parent’s or guardian’s name).

The legal age for students to apply for educational loans is 18. However, minors can also apply for loans through their parents or major guardians.

2. Academically Inclined

Although all students can apply for loans, the ones who are more likely to succeed in procuring loans are the ones that can show their academic proficiency.

The lender is more likely to give a loan to a student who has more academic achievements than one who does not.

3. Students Must Show Admission Into a Foreign University

To secure a loan, students must show the acceptance letter of the college they intend to join. The bank will act accordingly.

Documents required for Indian students who aspire to study abroad:

One method of getting a loan for abroad studies is to have all your documents ready well in advance. Here is a checklist to help you prepare for your educational stint abroad.

  • Address proof
  • Birth certificate
  • Duly filled application forms
  • Passport size photographs
  • Passport
  • Academic certifications and marks sheets
  • Test scores of entrance compulsory examinations like TOEFL, GRE, SAT, IELTS, etc
  • Bank statements of co-applicant
  • Income proof of co-applicant
  • In the case of collateral, proof of title deeds.

Details to Keep in Mind While Applying for A Loan for Studies Abroad

Banks give loans to students with an average interest of 10 to 15%. Generally, all banks issue educational loans to students only with the addition of a co-appellant signature.

Banks have different rules regarding the payback of loans. Some banks stipulate that students can return loan amounts when they start their employment.

How to Get a Loan for Abroad Studies


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Now that you are eligible to apply for a loan and have prepared your documents, you must now study the procedure for how to get a loan for abroad studies.

1. Select Recognised Courses

Once you have selected the course you wish to pursue in a foreign university, you must find out if the bank recognises the period for loan eligibility.

2. Compute the Loan Amount

The next step is to figure out the entire course amount and then calculate how much loan you can get for studying abroad.

Many times students may have saved some money for their future academics. In such cases, your loan amount from the bank will be reduced to a considerable extent.

Different banks give different loan amounts to students at varied interest rates. Usually, the higher the loan amount, the higher the interest rate.

3. Do a Comparative Study

It is advisable to do a comparative study of the different loan amounts with interest offered by other banks. Also, find out from the banks about the payback rules.

4. Loan Application

Once you have made the comparative study, the next step in how to get a loan for abroad studies is to fill out the loan application forms given by the bank.

Once the bank approves your educational loan, the bank will issue a bank loan statement containing all the loan details. Read the details carefully and sign the loan document.

On signing the document, the bank shall grant and release the loan amounts as and when required during the course.

Some Components of Loans Granted by Banks:

1. Collateral

When the loan exceeds a certain amount, some banks require collateral. Collateral is defined as movable or immovable property belonging to the loan applicant and is in the bank’s custody until the entire loan amount, along with interest, is repaid to the bank.

In certain circumstances, the student cannot pay the bank loan amount. In such cases, the bank will recover the amount from the collateral.

2. Interest Amount

Interest is defined as an amount the borrower shall pay the bank for the cost of the loan amount. Accordingly, different banks have different interest rates.

These interest rates are based on many factors like loan amount, period, etc.

3. Currency

Loan amounts from banks in India are in Indian rupees and, therefore, must be repaid in Indian rupees only.

4. Money Recipient

Loans from banks are paid directly to the recipient college. The banks release the loan amount to the college as and when demanded by the college or university abroad.

What Do Loans Usually Cover?

Loans are not only applicable for tuition fees but also cover other aspects of studying abroad, like boarding and lodging, books, travelling, and other related requirements.


Applying for a bank loan can be a strenuous process. Therefore, you should contact your trusted study abroad consultant.

A study abroad consultant has the expertise and knowledge about the various available and best loans that suit your requirements.

Contact your study abroad consultant to make a better decision when it comes to applying for study abroad bank loans.

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