Table of Contents
- Why Banks for Study Abroad Loans? Top Benefits
- Top Public Banks for Study Abroad Loans
- Top Private Banks for Study Abroad Loans
- Interest Rates for Public vs Private Bank Study Abroad Loans
- Eligibility for Public vs Private Bank Study Abroad Loans
- Collateral Requirement for Public vs Private Bank Study Abroad Loans
- How to Apply for Education Loans to Study Abroad from Banks?
- Frequently Asked Questions
Public and private banks in India remain the top choice for a study abroad loan due to their low interest rates, longer repayment periods, subsidies, and tax benefits. Over the years, their impact is evident in empowering students to achieve their study abroad goals. At present, India has 12 public banks and 21 private banks, and most of them offer an education loan to study abroad.
Banks in India are rooted in Indian daily life. All top banks in India have pan-Indian offices in cities and villages alike, forming a wide network of trusted customers. This in-depth connection with the locals allows them to establish trust, analyze collateral, and evaluate the student profile.
Why Banks for Study Abroad Loans? Top Benefits
Banks are often the go-to choice for education loans because of their established credibility and regulatory oversight, wide loan ranges tailored for study abroad expenses, customizable repayment options, and tax benefits under Section 80E of the Income Tax Act.
Unlike NBFCs or international lenders, Indian banks also offer better coordination with local documentation and currency advantages.
Top Benefits of Choosing A Bank for Your Study Abroad Loan
- Competitive interest rates
- Repayment flexibility with moratorium periods
- Longer loan tenures (up to 15 years)
- Tax deductions on interest repayment
- Loan insurance and co-applicant support options
Top Public Banks for Study Abroad Loans
In India, the top public banks for study abroad loans are those with an established history, trust, and legacy. Until very recently, most public banks offered education loans to study abroad with collateral for amounts more than INR 7.5 Lakhs.
Now, realizing the importance of no collateral loans, they have an alternative of education loans without collateral for abroad studies with high amounts like INR 25 – 40 Lakhs to select universities (mostly the premier ones).
| Bank | Maximum Amount | Interest Rate | Margin Money | Processing Charge | Repayment Tenure |
| SBI | INR 3 CrINR 50 Lakhs without collateral | 9.65% | 15% | INR 10,000 | 15 years |
| UBI | INR 1.5 CrINR 40 Lakhs without collateral | 9.25% – 9.75% | 15% | INR 5,000 | 15 years |
| BoB | INR 1.5 Cr | 9.20% – 10.65% | 10% – 15% | 1% of the loan amount (max. INR 10,000) | 15 years |
| PNB | No cap | 9.85% – 12.35% | 15% | 0.35% of the loan amount (max. INR 15,000) | 15 years |
| Canara Bank | INR 1 Cr | 10.00% – 10.85% | 10% | 0.50% of the loan amount | 15 years |
Top Private Banks for Study Abroad Loans
Private banks offer competitive interest rates for abroad education loans and high amounts of loans without collateral guarantees. Most of them keep a list of premier A and B institutions, to which the student must have secured admission. This helps them have security of future job potential and eases the documentation work through a partnership with the institutions.
| Bank | Maximum Amount | Interest Rate | Margin Money | Processing Charge | Repayment Tenure |
| Axis Bank | INR 75 Lakhs – INR 1 Cr | 10.70% – 14.35% | 15% | 2% of the loan amount | 15 years |
| ICICI Bank | INR 3 Cr INR 1 Cr without collateral | 11.32% – 14.25% | 0% – 15% | 2% of the loan amount | 15 years |
| IDBI Bank | INR 75 Lakhs | 11.10% – 13.5% | 20% | 1% of the loan amount (max. INR 5,000) | 15 years |
| IDFC FIRST Bank | INR 1.5 Cr INR 75 Lakhs without collateral | 11.00% – 13.00% | 0% | 1.5% of the loan amount | 15 years |
| Yes Bank | INR 1.25 Cr | 11.25% – 12.75% | 15% | 2% of the loan amount | 15 years |
Interest Rates for Public vs Private Bank Study Abroad Loans
Education loan interest rate is subject to many aspects, including your collateral, co-applicant’s income, future earning potential, and your university of admission. Top banks offering study abroad loans also offer subsidies (for eligible students) and tax benefits under Section 80 E of the Income Tax Act.
- Public bank interest rate for study abroad loans – 8.5% – 12.35% after subsidies
- Private bank interest rate for study abroad loans – 10.70% – 14.25%
Interest rates differ depending on the course, institution, the co-applicant’s record, and the existence of collateral. Lower rates are generally offered by public banks, particularly when tapping government schemes such as the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
Eligibility for Public vs Private Bank Study Abroad Loans
The eligibility requirements for an education loan to study abroad differ with the bank you choose. Public and private banks in India have set criteria regarding citizenship, educational qualification, and financial requirements.
- Be an Indian citizen.
- Have an excellent academic record.
- Secure admission to a university listed by the bank
- Have collateral or a cosigner to guarantee the loan
- GRE or GMAT scores: Many banks offer an education loan without collateral based on your GMAT or GRE scores.
Collateral Requirement for Public vs Private Bank Study Abroad Loans
Public banks
Most public banks offer up to INR 7.5 Lakhs collateral-free education loans to study abroad. Those who offer a high amount have stringent criteria regarding the course of study, university of admission, and cosigner’s CIBIL score.
Private banks
Most private banks offer education loans of INR 25 – 40 Lakhs without collateral if the cosigner’s income is sufficient for repayment guarantee. The university of admission and the course must be listed by the bank.
How to Apply for Education Loans to Study Abroad from Banks?
Your loan application starts with finding the right banks. Out of 12 public and 21 private banks in India, finding the top options takes time. Be ready for exhaustive research. Here are the steps to follow:
- Research your bank options and create a checklist. Exhaust the internet for banks that offer education loans for your course.
- Check the eligibility requirements and make necessary changes to your application profile.
- Prepare the documents required for your education loan application.
- Start the application process by visiting the bank or applying online.
- Let the bank evaluate your application. Wait for the sanction letter.
- Get your education loan disbursed to your school’s account.
In short, an education loan from a bank to study abroad can be your top choice, given the high loan quantum, low interest rates, longer repayment periods, subsidies, and tax benefits. However, as a fact, the application process can be a bit lengthy. Often, unpredictable bank visits and complicated documentation lead to the student being frustrated in the end.
And the chances of acceptance? It depends on your profile – academic and financial facts matter here. What is the solution to the challenge of getting a study abroad loan from a bank without the fear of rejection and time wasted?
Nomad Credit, your study abroad partner, is the right answer. We will evaluate your profile and shortlist the top lenders who can offer the loan you deserve. With us, you get guidance from beginning to end, from loan search to documentation till disbursement. Take a U-turn from your lonely loan search – discover the path to success with Nomad Credit.
Frequently Asked Questions
Which bank is the best for abroad education loans with collateral?
Bank of Baroda offers the lowest interest rate for study abroad loans with collateral. Their interest rate starts at 9.20%. Other banks like SBI, UBI, Axis, etc., offer abroad education loans at 9.00% – 13.5% interest rates.
Which banks are best for no-collateral abroad education loans?
It depends on your profile and the amount required to finalize the best bank for no collateral study abroad loans. SBI, for instance, offers up to INR 50 Lakhs without collateral for premier institutions they have listed. ICICI Bank offers up to INR 1.5 Cr without collateral to universities listed in A and B categories.
Do banks offer a 100% loan to study abroad?
Most banks have a margin of 10% – 20%, meaning you need to source that much amount from your cost of attendance. IDFC FIRST Bank offers up to 100% of your cost of attendance, however, with terms and conditions.
What is the interest rate for an abroad education loan?
The interest rate for overseas education loans falls in the range of 8.00% – 14.00%. The education loan interest rate for an abroad education loan differs with each bank, based on your course, university, financial profile, and many other factors.
Do girl students get an interest benefit from banks on study abroad loans?
Most banks offer a 0.5% interest rebate for girl students applying for a study abroad loan. It depends on the guidelines followed by the bank.
