Do you want to study abroad but don’t have enough money? An education loan for overseas studies can help. It’s money you borrow to support your studies in another country. This loan covers your tuition fees, living expenses, and travel costs. There are two types: secured (with something valuable like a house) or unsecured. The interest rates can differ, and you start paying it back after you finish studying, with a bit of extra time called a grace period. Usually, you need someone else to support your application, like a co-applicant or guarantor. You’ll also need to provide some documents when you apply for the loan.

Have you been dreaming of studying in another country but worried about the money?

Let’s face it, when it comes to chasing our dreams, we need to think about the practical stuff too. Tuition fees are just the beginning. You’ve got to consider accommodation, daily expenses, books, equipment, insurance, and more. The costs for all these things can vary based on what you’re studying, where you’re studying, and which university you’re attending. But they usually add up to a lot of money, ranging from INR 15 lakhs to 1 crore per year.

But hey, don’t worry! Education loans can be your ticket to that dream university abroad. With different types of education loans available, you can confidently pursue your dreams. You have the green light to turn those dreams into reality! Sure, getting a loan might seem like a hassle, but this blog will walk you through what you need and simplify the application process.

Types of Educational Loans for Indian Students Applying Abroad

Now that we know what an education loan is, let’s explore the various types of student loans that Indian students can access.

1. Secured Education Loan for Overseas Studies

This type is referred to as a secured loan. With a secured loan, the borrower offers something valuable like property or assets as security against the money borrowed. By providing this collateral, the borrower reduces the risk for the lender. As a result, secured loans typically have lower interest rates and allow for higher loan amounts compared to unsecured loans. This money can be used to cover different expenses for studying abroad, including tuition, living expenses, and travel costs.

2. Unsecured Education Loan for Overseas Studies 

An unsecured education loan for studying abroad is a type of loan that doesn’t need collateral as security. Instead, it’s based on the borrower’s creditworthiness and income. This loan covers educational expenses without requiring any pledged assets. However, unsecured loans usually offer lower loan amounts and come with higher interest rates compared to secured loans.

3. No Cosigner/No Collateral Loan for Study Abroad

A “No Collateral, No Cosigner Loan” for overseas studies allows students to finance their education abroad without needing collateral or a cosigner. This type of loan is helpful for international students who may not have access to these resources. However, the terms of these loans can vary, so it’s important to carefully consider and explore other financial aid options before deciding.

4. Secured vs. Unsecured Education vs. No Collateral, No Cosigner Loans

Secured Education Loan for Overseas Studies

  • Collateral Requirement: Requires collateral like property or assets, which reduces the risk for the lender.
  • Interest Rates: Typically have lower interest rates due to the presence of collateral, reducing overall borrowing costs.
  • Approval Process: Easier approval process, suitable for those with limited credit history, due to the presence of collateral.
  • Repayment Terms: Flexible repayment terms and longer periods, easing post-graduation financial burden.
  • Credit Building: Can help build a positive credit history if payments are managed responsibly.

Unsecured Education Loan for Overseas Studies

  • Collateral Requirement: No collateral required, making it more accessible for students without substantial assets.
  • Interest Rates: Because there is no collateral involved, interest rates are higher than for secured loans.
  • Approval Process: Approval may be more stringent and dependent on credit history, income, and co-signers.
  • Repayment Terms: May come with less flexible repayment options and shorter terms, potentially causing higher immediate repayment stress.
  • Credit Building: Helps in building credit but might have a lesser impact due to higher interest rates and smaller loan amounts.

No Collateral No Cosigner Loan for Overseas Studies

  • Collateral Requirement: No need for collateral or a cosigner, making it accessible for students without significant assets.
  • Interest Rates: Rates may vary, but these loans often offer competitive rates compared to traditional loans.
  • Approval Process: Typically has a simplified approval process, making it easier for students to secure funding.
  • Repayment Terms: Flexible repayment options are often available, accommodating the financial circumstances of students.
  • Credit Building: Allows students to build a credit history without a cosigner, fostering financial independence.

Note: No Collateral No Cosigner Loans are only available for specific universities and countries. Good GRE/GMAT scores are usually required when applying for this loan.

Study Abroad Education Loan: Eligibility, Documents Required and Application Process 

Let’s break down the loan eligibility criteria, application process, required documents, and banks offering student loans in India:

1. Education Loan Eligibility in India

  • You need to provide proof of finances and income details to demonstrate your repayment capability.
  • The co-borrower(s) have to have an account with a bank in India that allows them to write checks.
  • You must have an admission letter from a recognized university or college abroad.

2. Education Loan Documents Required

Here’s a list of documents needed to apply for a study abroad education loan:

  1. Application form for the loan.
  2. Standardized test scores & academic transcripts.
  3. Acceptance letter from the international school/institute.
  4. KYC documents – Aadhaar Card & PAN card (yours and your parents/co-applicants).
  5. Birth certificate.
  6. Residential Proof (including utility bills, rental agreement, electricity bills over the previous three months, etc.).
  7. Family income documentation and the last six months’ worth of bank statements (containing income tax returns and property documentation)

If you are applying for an uncollateralized school loan to study abroad, you will need to provide additional documentation:

  1. University acceptance form with tuition fees.
  2. KYC of the co-applicant.
  3. Address proof along with electricity bill.
  4. Applicant’s savings account details.
  5. Form 16 and salary slip (applicable if the co-applicant is a salaried person).

3. Application Process for Education Loan 

Online application for student loans for studying abroad

  • Start by submitting an online application from your chosen source and attach the necessary paperwork.
  • Once your paperwork is submitted, the lender will carefully review it and contact you to proceed with the loan application process.
  • Niyo Global has partnered with institutions that can assist you in obtaining the most suitable education loan for studying abroad, offering competitive interest rates. Instead of approaching multiple banks individually, you only need to complete one digital application through Niyo Global’s platform. They will facilitate the process for you.

Offline application for a student loan to study abroad

  • Visit the local branch of the lender to acquire a loan and submit the necessary paperwork in person.
  • A representative will carefully review the submitted paperwork and provide detailed information about the loan terms and conditions.
  • If the applicant agrees with the terms, they will be asked to fill out the loan application form in person.
  • Alternatively, the applicant can contact the lender to express interest and discuss the terms of the loan before formally applying. This allows for clarification and understanding of the loan process before proceeding with the application.

Banks Offering Education Loans 2023

Here are some prominent banks in India that offer education loans for overseas studies, along with their interest rates and processing fees:

HDFC Credila Education Loan

  • Interest Rate (p.a.): 10.25% – 12.75%
  • Processing Fees: 0.5 – 1% of the loan amount


  • Interest Rate (p.a.): 10.95% onwards
  • Processing Fees: 0.5% – 1% of the loan amount + GST

State Bank of India (SBI)

  • Interest Rate (p.a.): 10.15% – 11.15%
  • Processing Fees: INR 10,000 + GST (Non-refundable)

Bank of Baroda

  • Interest Rate (p.a.): 9.7% – 11.15%
  • Processing Fees: 1.00% of the loan amount (maximum Rs. 10,000)

Union Bank of India

  • Interest Rate (p.a.): 9.25% – 9.75%
  • Processing Fees: An initial fee of INR 5,000 is required from students, and it will be reimbursed if the student secures the loan within three months from the sanction date. Otherwise, no processing fees apply.

Benefits of Education Loan for Abroad Studies

Higher education abroad can be costly, even when living expenses are excluded. That’s why student loans are available to finance your studies. There are various types of education loans, and the repayment terms can vary depending on the lender. The main types include private loans and federal educational loans provided by the government. However, federal loans often have higher interest rates despite following traditional lending methods.

Here are some advantages of education loans for overseas studies:

  1. Reduces Strain on Family Expenses and Savings: Student loans help avoid the need to liquidate investments like fixed deposits or mutual funds. Government education loans, such as the Pradhan Mantri Vidya Lakshmi Karyakram, may offer financial benefits like lower interest rates.
  2. Freedom to Pay Post-Education: EMIs allow for easy repayment after completing studies, providing flexibility in family financial planning.
  3. Covers a Wide Range of Expenses: Education loans cover not just tuition fees but also living, travel, study materials, and other academic costs.
  4. Easy Repayment Terms: Flexible collateral and co-borrower terms make repayment stress-free.
  5. Encourages Financial Independence: Students can repay loans independently, fostering financial habits and building credit history for cheaper loans in the future.
  6. Building Credit History: Timely payments contribute to a strong credit history, opening doors to future financial opportunities.
  7. Facilitating Financial Discipline: Education loans protect financial profiles, reducing the risk of identity theft and fraud, and potentially leading to eligibility for better services or larger loans.


1. Can I apply for a student loan without collateral to study abroad?

Yes, students can apply for education loans to study abroad in India with private banks that offer loans without collateral. These unsecured education loans are typically sanctioned for students admitted to specific universities.

2. Can I get a loan of 100% to study abroad? 

The full cost of studying abroad is typically covered by private banks and lenders, notably Non-Banking Finance Companies (NBFCs). Public banks, however, can demand students to pay for 10–15% of the entire cost out of pocket, with the education loan covering the remaining costs.

3. Who can apply for an international student loan?

The minimum age requirement to apply for a study abroad loan is 18 years old, and you must be an Indian citizen. Your parents may apply for a loan to help you study overseas if you are under the age of 18.