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For admission to an international university, financing your education is often the most daunting part. With the cost of studying in top global destinations increasing year after year, many students are turning to education loans as a necessary means of funding their studies.
Fortunately, India's nationalised banks and private institutions offer various education loan schemes explicitly designed for students aspiring to study abroad. This guide will explore the key education loan schemes to study abroad, including government-backed options, private loan programs, and everything in between.
We will help you make an informed choice that best suits your academic and financial needs!
By the end of this blog, you will know
- Nationalised banks like SBI, PNB, and Union Bank offer low-interest, flexible loans, while private lenders like HDFC Credila and ICICI provide faster processing and collateral flexibility.
- Education loans cover tuition, living expenses, travel, books, and insurance, with repayment tenures up to 15 years and moratorium periods during the course.
- Schemes like the Central Sector Interest Subsidy (CSIS) help students from economically weaker families by covering interest during the moratorium period.
- Students studying overseas should plan living costs carefully, consider part-time work aligned with their field, and explore scholarships to minimise financial stress.
Education Loan Schemes to Study Abroad: A Brief Overview
The cost of studying abroad has seen exponential growth over the past few decades.
The average annual tuition fee for a master's program in the United States ranged from USD 60,000, depending on the university and the course of study. Additionally, students need to factor in accommodation, food, transportation, health insurance, and other personal expenses.
To bridge this financial gap, nationalised banks in India, along with a growing number of private institutions, offer a range of loan schemes customised to students planning to study abroad.
- These loans cover up to 100% of the expenses, although some schemes may require students to contribute a marginal amount (usually between 10% to 15%).
- Banks typically offer a moratorium period that extends until the completion of the course, plus an additional few months afterwards.
- The repayment tenure for most schemes ranges up to 15 years, making the repayment process more manageable.
Planning to study overseas but worried about finances? Don’t miss our detailed guide on how to get an education loan for abroad studies in 2024.
Government Education Loan Schemes Abroad
Government-backed education loan schemes offer a low-interest and accessible way to fund education abroad. These schemes provide reduced interest rates, flexibility in collateral requirements, and lower processing fees.
Let's examine some of the most prominent government-sponsored initiatives currently available.
The State Bank of India (SBI) is one of India's largest and most reputable banks, and its Global Ed-Vantage Scheme is designed to offer large loan amounts with competitive interest rates. It also offers concessions for female students and policyholders of SBI Life Insurance, making this scheme highly attractive. Additionally, the bank provides flexible processing times, with seven working days for unsecured loans and 20-30 working days for secured loans.
Key Features:
- Loan amount is up to INR 3 Crores for secured loans, and INR 50 Lakhs for unsecured loans.
- Interest rate starts at around 8.40%-8.90% p.a. (linked to SBI’s External Benchmark Rate), with the lowest rates for select top-ranked institutions, as of June 2026.
- Collateral is required for loans exceeding INR 50 Lakhs, though certain top-ranked institutions may qualify for unsecured loans.
- Repayment tenure is up to 15 years.
- Expenses include tuition fees, living expenses, travel, health insurance, and more.
- The loan repayment begins after the completion of the course, plus a 6-month grace period.
The Union Bank of India provides unsecured loans to institutions categorised under lists A and B, making it a favourable option for students from diverse economic backgrounds. This scheme also offers additional interest rate concessions for female students and students applying to select prestigious institutions abroad.
Key Features:
- Loan amount goes up to INR 1.5 Crores for secured loans and INR 40 Lakhs for unsecured loans.
- Interest rates start at around 8.00% for secured loans and 8.50% for unsecured loans (EBLR-linked under Union Education – Premier Abroad; EBLR 8.00% as of June 2026, per Union Bank of India retail ROI schedule – subject to revision).
- Collateral is required for loans exceeding INR 40 Lakhs.
- Repayment tenure is up to 15 years, with a grace period of up to 12 months.
- Expenses covered include tuition fees, accommodation, living expenses, travel, books, and more.
- Processing fees are INR 10,000 + GST for loans up to INR 40 Lakhs.
The PNB Udaan Scheme offers competitive interest rates and a flexible repayment structure. It also provides special concessions for female students and those attending prestigious universities.
Key Features:
- Loan amount is up to INR 1.5 Crores for secured loans.
- Interest rates are floating and RLLR-linked (PNB RLLR + BSP = 8.10% as of June 2026, per Punjab National Bank), with the lowest rates for top universities; the exact Udaan premier-university spread is indicative – confirm on the lender’s site.
- Collateral is required for loans above INR 7.5 Lakhs.
- Repayment tenure is up to 15 years.
- Expenses covered are tuition fees, living expenses, travel, insurance, books, etc.
- Processing fees are INR 10,000 + GST.
Get an Education Loan 10X Faster than Banks.
Private Education Loan Schemes for Studying Abroad
While government schemes provide excellent opportunities, private banks also offer education loans, typically with faster processing times and more flexible collateral requirements. However, private loans often come with higher interest rates and stricter eligibility criteria.
HDFC Credila is one of the leading private lenders offering education loans for students looking to study abroad. Known for its quick processing time and flexible terms, HDFC Credila is a top choice for students who need fast access to funds.
Key Features:
- Loan amount is up to INR 20 Lakhs (without collateral) and more for loans requiring collateral.
- Interest rates start at 10.75%.
- Collateral may be required for loans above INR 7.5 Lakhs.
- Repayment Tenure is up to 15 years.
- Expenses covered are tuition, living expenses, books, insurance, and more.
ICICI Bank offers flexible repayment options, including moratorium periods and the ability to choose repayment start dates, allowing students to focus on their studies without financial worries.
Key Features:
- Loan amount is up to INR 1 Crore.
- Interest rates start at 10.25%.
- Collateral is required for loans above INR 20 Lakhs.
- Repayment tenure is up to 15 years.
- Expenses covered include tuition fees, living costs, books, insurance, etc.
Private vs Government Education Loan Schemes: A Comparison
When choosing between private and government education loan schemes, it's essential to weigh the pros and cons of each. Here's a quick comparison:
|
Feature |
Government Education Loans |
Private Education Loans |
|
Interest Rates |
Lower (around 8% - 11%) |
Higher (around 10% - 13%) |
|
Collateral |
Often required for larger loans |
May be required for larger loans |
|
Repayment Tenure |
Up to 15 years |
Up to 15 years |
|
Eligibility |
Easier for students with good academic records |
Based on creditworthiness and financial background |
|
Processing Time |
Slower (20-30 days) |
Faster (within a week) |
|
Concessions |
Special rates for women, SC/ST students |
Fewer concessions, but flexibility in terms |
Minimal Docs, Maximum Approval - Apply Now.
Education Loan Interest Subsidy Schemes
In addition to loans, sure students may also benefit from interest subsidy schemes provided by the government. These subsidies are designed to ease the financial burden of education loan interest during the course duration or moratorium period.
Central Sector Interest Subsidy Scheme (CSIS)
The Central Sector Interest Subsidy Scheme provides a full interest subsidy during the moratorium period for students from economically weaker sections. Important: CSIS applies only to courses pursued within India, not to study abroad. The earlier abroad interest-subsidy scheme for minority students, Padho Pardesh, was discontinued in FY 2022-23, so there is currently no central interest-subsidy scheme for overseas study. Students going abroad should instead compare bank and NBFC loan rates directly.
Eligibility Criteria:
- Annual family income must be less than INR 4.5 Lakhs.
- The loan must be taken under the Educational Loan Scheme of Indian Banks.
This scheme is particularly beneficial for students who may face challenges in repaying loan interest during their studies, as it covers the interest during the moratorium period.
How to Manage Education Loan While Studying Abroad? Key Insights!
Taking out an education loan is often the first step toward pursuing higher studies abroad. But managing that loan effectively, especially when living and studying in a foreign country, can be a challenge.
A Reddit User in r/Indians_StudyAbroad shared:
“I have a 21 Lakh INR loan at an 11.5% interest rate, and I’m heading to Germany for my Master's. How should I manage this loan while studying? Should I focus entirely on my studies or look for part-time work?
Insight:
Managing a substantial education loan while studying abroad requires balancing study priorities and part-time work opportunities. Here’s what you should consider:
- Living Expenses and Tuition: As a student in Germany, living expenses vary by city but can range from €700 to €1,200 per month. The loan you have taken will cover these costs, but it's essential to plan how you will manage this while maintaining a healthy work-life balance.
Should You Work While Studying?
If your priority is academic excellence, focusing entirely on your studies is crucial. However, Germany allows international students to work part-time (up to 140 full days or 280 half-days a year, the limit raised from 120/240 in 2024).
You should initially focus on mastering the course and German language skills (especially since you plan on taking an A2 level course).
You can work in general student jobs, such as cafes or retail, to cover your basic expenses. However, targeting job opportunities in your field (Embedded Systems) for working students is ideal. These jobs typically pay around €12-€20 per hour, depending on the company and your experience.
With your background in embedded engineering, you can find part-time jobs related to your field, which could also contribute to building your career.
What Can You Do Now?
- Several scholarships are available to international students in Germany. Some options include the DAAD Scholarship and university-specific grants, which can help alleviate some of your financial stress.
- Since you're planning to take an intensive A2-level German course, building fluency will increase your chances of finding a better-paying job during and after your studies.
- After completing your course, consider consolidating your loans or extending the repayment tenure based on your salary to make the process manageable.
Being transparent with your financial situation and having a clear repayment plan in mind will not only help you manage your education loan but also ease the stress of financing your education abroad.
Choosing the right education loan is crucial for your success in studying abroad. The right loan scheme should align with your academic goals, financial situation, and long-term career plans. Remember, whether you choose a government-backed scheme or a private loan, your goal is to ensure that the loan you take helps you achieve your dreams without financial stress.
If you're looking for the right partner that makes this education loan process smoother and simpler, Propelld can help. With quick digital approvals, collateral-free loans up to ₹50 lakhs, and flexible repayment options, Propelld takes the hassle out of financing your global education.
Take the first step towards your future—Apply with Propelld today!
