The Canara Bank abroad education loan allows Indian students to pursue higher studies overseas by offering full-cost financing backed by public-sector trust. One in three Indian students now takes a loan to study abroad, reflecting rising dependency on education finance.
In this blog, we’ll cover the key Canara Bank abroad-only schemes, interest rates and collateral requirements, eligibility criteria, required documents, and how to apply.
Canara Bank Abroad Education Loan Overview
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Canara Bank Abroad Education Loan Schemes
Canara Bank provides two key study abroad loan options tailored for Indian students — the Vidya Sagar Education Loan Scheme and the IBA Model Education Loan Scheme (for Abroad Studies).
Both are government-backed programs offering competitive rates, flexible repayment, and full-cost coverage for higher education overseas.
Canara Bank Vidya Sagar Education Loan Scheme (for Master’s Abroad)
The Vidya Sagar Education Loan Scheme is designed for Indian students pursuing Master’s programs in STEM (Science, Technology, Engineering, and Management) at top-ranked global universities (typically ranked among the top 50 worldwide).
Key details:
1. Loan amount: ₹7.5 lakh to ₹1 crore (collateral-based, need-based approval).
2. Collateral: Minimum 50% of loan value is required; 100% collateral ensures the lowest possible rate.
3. Interest rate: Between 10.85% – 11.35%, depending on collateral coverage.
4. Margin money: 10% (the borrower contributes 10% of total study cost).
5. Repayment tenure: Up to 15 years, including the moratorium period (course duration + 12 months).
6. Processing fee: 0.5% of the loan amount — capped at ₹10,000 for 100% collateral and ₹20,000 for less than full collateral.
Canara Bank IBA Model Education Loan Scheme (for All Courses Abroad)
The IBA Model Education Loan Scheme caters to a broader audience: students pursuing undergraduate, postgraduate, PhD, or diploma programs at recognised international institutions. It follows guidelines set by the Indian Banks’ Association (IBA), ensuring standardised eligibility and transparent repayment norms.
Key details:
1. Loan amount: Need-based financing up to ₹1 crore (collateral-backed).
2. Collateral: Mandatory for all loans above ₹7.5 lakh; no collateral needed below that amount.
3. Margin money: 15% for foreign education (the student funds 15% of total expenses).
4. Interest rate: ~10.85% p.a., linked to Canara Bank’s RLLR (Repo Linked Lending Rate) + 1.6%.
5. Tenure: Up to 15 years, including the moratorium period.
For students seeking financial support without pledging assets, you can explore options to get an education loan without collateral and secure funds quickly.
Get an Education Loan 10X Faster than Banks.
Canara Bank Loan Interest Rates and Tenure
Canara Bank’s overseas education loan interest rates are closely linked to the bank’s Repo Linked Lending Rate (RLLR), which currently stands at 9.25%. The final rate you receive depends on your collateral coverage: the higher the collateral value, the lower the effective interest rate.
Tenure & Repayment Terms:
1. Loan tenure: Up to 15 years (including moratorium).
2. Moratorium period: Course duration + 12 months grace.
3. Repayment starts after the moratorium ends.
4. Prepayment: Allowed anytime with no penalty.
5. Tax benefit: Interest paid on your Canara Bank abroad education loan qualifies for a deduction under Section 80E of the Income Tax Act for up to 8 years.
Canara Bank Overseas Education Loan Eligibility
To apply successfully for a Canara Bank study abroad loan, applicants must meet certain academic and financial criteria.
Eligibility Criteria:
1. Must be an Indian citizen (NRI applicants with valid Indian passport are also eligible).
2. Must have secured confirmed admission to a recognised foreign university or institution.
3. For the Vidya Sagar Scheme, applicants must be admitted to a Master’s in STEM program at a top 50 global university.
4. A co-applicant (parent, guardian, or spouse) with a stable income and good credit history is mandatory.
5. Collateral security (residential property, land, FDs, or government bonds) is required for loans above ₹ 7.5 lakh.
6. Applicants should generally be 18 years or older at the time of application.
Note: Students with strong academic profiles and complete documentation (admission letter, entrance test scores, and collateral proof) are prioritised for faster approval and lower interest rates.
Canara Bank Loan Documents for Study Abroad
When applying for a Canara Bank abroad education loan, submitting a complete and accurate set of documents is critical for smooth approval.
Documents Required from the Student Applicant:
1. Loan application form, fully filled and signed.
2. Identity proof: PAN card, Passport, or Aadhaar.
3. Address proof: Passport, Aadhaar, or recent utility bills.
4. Academic documents: 10th, 12th, and degree mark sheets; transcripts; entrance exam scores (GRE, GMAT, IELTS, TOEFL).
5. Proof of admission: Offer/Admission letter from the university, including course and fee structure.
6. Visa and passport copies (if available).
7. Statement of expenses issued by the university.
8. Two passport-size photographs.
Documents Required from the Co-applicant (Parent/Guardian):
- Identity and address proof: PAN, Aadhaar, Passport, or Voter ID.
- Income proof:
- For salaried: last 3 months’ salary slips, Form 16 (last 2 years), and 6 months’ salary account statements.
- For self-employed: last 2 years’ ITRs, business registration, and 6 months’ current account statements.
- Asset & liability statement.
Collateral Documents (if applicable):
- Registered title deed or property ownership document.
- Encumbrance certificate (to prove no legal dues).
- Property tax receipts and latest valuation report.
- Fixed deposit receipts or government bond certificates (if offered as security).
Canara Bank Study Abroad Education Loan Process
The Canara Bank abroad loan process can be completed online via the Vidya Lakshmi Portal or offline at a branch. Both methods follow the same evaluation, sanction, and disbursal flow.
Step-by-Step Loan Processing:
1. Application Submission
- Apply online through the Vidya Lakshmi Portal by registering, completing the unified form, and selecting Canara Bank as your preferred lender.
- Alternatively, visit the nearest Canara Bank branch and apply directly with the Credit Manager.
2. Document Verification & Collateral Evaluation
- The bank verifies your academic credentials, co-applicant income, and collateral ownership.
- If collateral is property, valuation and legal checks are conducted.
3. Loan Sanction
- Once verified, Canara Bank issues a sanction letter specifying the approved loan amount, interest rate, and repayment terms.
- Average sanction time: 10–15 working days with complete documentation.
4. Disbursal Process
- Tuition fees are sent directly to the university’s account in foreign currency or via authorised remittance.
- Living and travel expenses are credited to the student’s Canara Bank account.
- For multi-year courses, disbursements are made in instalments based on the university’s fee schedule.
Canara Bank Study Abroad Education Loan Process
Applying for a Canara Bank abroad education loan is quick and transparent. You can apply online via the Vidya Lakshmi Portal or offline at any Canara Bank branch.
Step 1: Check Eligibility & Prepare Documents
- Ensure you meet Canara Bank overseas education loan eligibility, Indian citizen, confirmed admission, a co-applicant with income, and collateral for loans above ₹7.5 lakh.
- Collect the required Canara Bank loan documents for study abroad, ID, address, academic records, admission letter, income proof, and collateral papers (if applicable).
Step 2: Apply Online or Offline
- Online: Register at Vidya Lakshmi Portal, fill out the loan form, choose Canara Bank, upload documents, and submit.
- Offline: Visit your nearest branch, fill out the application form, attach documents, and submit to the Credit Manager.
Step 3: Verification & Sanction
- The bank verifies documents, income, and collateral (if pledged).
- Approved applicants receive a loan sanction letter with amount, interest rate, and repayment terms.
- Processing time: 7–15 working days, depending on document readiness.
Step 4: Disbursement
- Tuition fees are sent directly to the foreign university.
- Living and travel expenses are credited to the student’s Canara Bank account or travel card.
- Multi-year courses are funded in semester or annual tranches.
The Canara Bank Abroad Education Loan remains one of the most trusted government-backed loan options for students planning to study overseas.
However, navigating bank paperwork, collateral evaluations, and timelines can be time-consuming, especially during tight university admission windows.
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4. Explore collateral-free and income-based financing options designed for abroad education.
100% digital process, expert loan counsellors, and quick disbursals, so you can focus on your visa and university prep, not paperwork. Ready to begin your study abroad journey? Apply with Propelld today!
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