Looking to study abroad but worried about funding? The right bank can make all the difference. SBI’s Global Ed-Vantage scheme and PNB’s Udaan scheme show how banks are competing to offer lower rates, starting from 9.15% p.a. for eligible students.
This article gives you an up-to-date comparison of top banks and schemes, including interest rates, features, pros & cons, so you can pick what works best for your study abroad plan. Keep reading to learn more about the Best Bank for Study Abroad Education Loan 2025 and how to make your best choice.
Top Banks Offering Study Abroad Loans 2025
When students plan to study abroad, choosing the right bank is about interest rate, collateral requirements, repayment length, processing time, and moratorium. Banks such as SBI provide education loans of up to ₹3 crore for studying abroad.
Here are some of the top banks and institutions to consider for the best student loan for international studies in India.
Public Sector Banks
Private Sector Banks
NBFCs & International Lenders
Explore detailed guidance on Education Loans for Studying Abroad in 2025 with key insights on eligibility and documents to understand requirements and make your application process smoother.
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Lowest Interest Rate Abroad Education Loan Banks 2025
On average, education loan interest rates in India range between 8% and 15%, depending on the lender and the applicant’s credit profile. Below are some of the banks offering the lowest interest rates for abroad education loans in 2025.
Different Categories of Education Loans for Overseas Studies 2025
According to RBI data, the education loan portfolio of banks recorded a growth of 15.1% in FY25, compared to 23% in FY24. Public banks typically focus on secured loans with lower rates, while private banks and NBFCs have widened access by offering unsecured loans to students admitted to reputed foreign universities.
Here’s a breakdown of the major types of loans available for students heading abroad:
1. Secured Education Loans
These require collateral such as property, fixed deposits, or insurance policies. They usually come with lower interest rates for abroad studies and higher loan amounts, depending on the bank.
2. Unsecured (Collateral-Free) Education Loans
These loans don’t require any security but carry slightly higher interest rates. Loan amounts are often capped at up to ₹7.5 lakh, making them popular among students without significant collateral.
3. Under Government-Backed Schemes
Schemes like the PM Vidya Lakshmi Scheme and interest subsidy programs help eligible students, particularly from economically weaker sections, access education loans with lower or subsidised rates. For example, the CSIS education loan scheme offers a full interest subsidy on education loans up to ₹10 lakh during the moratorium period, for families earning below ₹4.5 lakh annually.
4. Loans from NBFCs and International Lenders
NBFCs such as Propelld, HDFC Credila, Avanse, and InCred specialise in overseas education loans, providing flexible terms, higher approval rates, and customised repayment options. Some international lenders, like Prodigy Finance, also offer unsecured loans.
Learn the differences between Secured vs Unsecured Education Loans and find out which option suits your study abroad plans best.
Eligibility Criteria For The Best Student Loan For International Studies India
Securing an education loan for studying abroad involves meeting specific eligibility criteria set by banks and financial institutions. Here's a detailed overview of the common eligibility requirements:
1. Applicants must be Indian citizens.
2. Typically, applicants should be between 18 to 35 years of age
3. Completion of 10+2 or equivalent for undergraduate courses. For postgraduate courses, a relevant undergraduate degree is required.
4. Admission must be secured in a recognised foreign university or institution.
5. The chosen course should be job-oriented, professional, or technical. Courses like MCA, MBA, MS, and certifications from bodies like CIMA (London) or CPA (USA) are eligible.
6. For loan amounts above ₹7.5 lakh, collateral is required, which can include property, fixed deposits, or third-party guarantees.
7. A co-borrower, usually a parent or guardian, is mandatory. The co-borrower should have a stable income and a good credit history.
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Essential Documents for Securing a Study Abroad Education Loan in 2025
Below is a comprehensive list of the documents typically required:
For the Student (Applicant):
- Proof of Identity:
- Valid passport (mandatory for study abroad loans).
- Aadhaar card, PAN card, voter ID, or driving license.
- Proof of Address:
- Recent utility bills (electricity, water, gas).
- Aadhaar card, passport, or driving license.
- Academic Documents:
- Mark sheets and degree certificates from 10th, 12th, and undergraduate courses.
- Entrance exam scores (e.g., GRE, TOEFL, IELTS) if applicable.
- Proof of Admission:
- An admission offer letter from a foreign university.
- I-20 Form (for U.S. universities) or equivalent documents for other countries.
- Statement of Cost of Study:
- Detailed breakdown of tuition fees, living expenses, travel costs, and other related expenditures.
- Photographs:
- Recent passport-sized photographs (usually 2–4).
For the Co-Applicant (Parent/Guardian):
1. Proof of Identity and Address:
- Aadhaar card, PAN card, passport, voter ID, or driving license.
- Recent utility bills or bank statements as proof of address.
2. Income Proof:
Salaried Co-Applicant:
- Latest salary slips (typically for the last 3 months).
- Form 16 or Income Tax Returns (ITR) for the last 2 years.
- Bank statements for the last 6 months.
Self-Employed Co-Applicant:
- ITR for the last 2 years.
- Audited balance sheets and Profit & Loss statements for the last 2 years.
- Bank statements for the last 6 months.
- Proof of Business (e.g., GST registration, business license).
3. Collateral Documents (if applicable):
- Title Deed and Registration Papers for immovable property.
Fixed Deposit Receipts or other financial instruments.
Additional Documents (if applicable):
1. Loan Account Statements for any existing loans.
2. Receipts of Advance Payments made to the university.
3. Gap Certificate if there's a break in education.
How to Apply to the Best Bank for Study Abroad Education Loan?
Banks and financial institutions evaluate the student’s eligibility, the co-applicant’s financial standing, and collateral (if required) before sanctioning the loan.
Here are the key steps to apply for a study abroad education loan from top banks in 2025:
1. Research and Compare Banks
Check interest rates, loan amounts, repayment options, processing fees, and moratorium periods. Public sector banks like SBI, PNB, and Bank of Baroda often offer lower interest rates, while private banks and NBFCs may provide faster processing.
2. Check Eligibility
Verify if you meet the bank’s eligibility criteria, including age, academic qualifications, co-applicant requirements, and course acceptance.
3. Fill Out the Loan Application
Most banks provide online application forms for convenience. Provide accurate personal, academic, and financial information to avoid delays.
4. Submit the Application
Apply along with scanned or physical copies of the required documents. Some banks may schedule an in-person verification of documents and co-applicant credentials.
5. Loan Processing and Sanction
Recent government directives have mandated public sector banks to approve education loan applications within 15 days, ensuring timely financial support for students. Once approved, you’ll receive a sanction letter detailing the loan amount, interest rate, tenure, and repayment terms.
6. Loan Disbursement
Funds are generally released directly to the university as per the fee schedule. Banks may disburse the loan in multiple stages covering tuition fees, living expenses, and other costs.
Best Bank for Study Abroad Education Loan Benefits
Selecting the right bank for your education loan can significantly impact your study abroad journey. The best banks offer features that ease your financial planning and repayment process.
Here are the main features and advantages provided by leading banks for study abroad education loans:
1. Competitive Interest Rates
Leading banks like SBi offer interest rates starting as low as 9.15% per annum for education loans, making them more affordable compared to personal loans.
2. High Loan Amounts
Top banks like SBI provide education loans up to ₹3 crore, covering tuition, living expenses, and more. For premier institutions, collateral-free loans up to ₹50 lakh are available.
3. Flexible Repayment Options
Most banks offer repayment tenures up to 15 years, with a moratorium period that allows you to start repayments after completing your course and securing employment.
4. Tax Benefits
Under Section 80E of the Income Tax Act, the interest paid on education loans is tax-deductible, reducing your taxable income and providing financial relief.
5. Comprehensive Coverage
Education loans from top banks cover a wide range of expenses, including tuition fees, travel, visa charges, living expenses, and even laptops and books, providing a comprehensive financial solution for students.
Facing Education Loan Challenges for U.S. Master's? Here’s What You Should Know!
Many students face hurdles securing education loans for U.S. programs due to strict bank policies around co-applicants and credit history. Traditional lenders often decline applications even when the student has strong academic and professional credentials.
Reddit User shared:
"Due to my dad’s past late payments, my loan was declined from IDFC and HDFC Credila. I’m looking for non-collateral, non-co-applicant options for my MS in the USA."
Insight: Banks heavily weigh the co-applicant’s credit history, which can block deserving students. NBFCs, on the other hand, provide more flexibility, including alternative co-applicant options, lower reliance on credit scores, and non-collateral loans.
What do we infer from this case?
NBFCs can be a viable option for students struggling with:
1. Strict co-applicant requirements
2. Past credit issues affecting eligibility
3. High collateral demands
4. Slow bank processing
Tip: Explore NBFCs that offer non-collateral and flexible co-applicant loans to secure funding for your U.S. master’s program without delays.
Choosing the best bank for study abroad education loans 2025 is about balancing loan amount, repayment flexibility, moratorium period, and additional benefits like government subsidies and tax deductions. With public banks offering competitive rates and NBFCs providing faster approvals, students now have multiple pathways to fund their global education efficiently.
Turn your study abroad dreams into reality with Propelld! Access collateral-free loans, flexible repayment plans, and instant approval, all tailored to your course and future potential. Fund your global education effortlessly and start your journey to success today.
Apply with Propelld now and take the first step toward your dream university!
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