Education Loans
Education Loan for Study Abroad: Complete Guide 2024
Published on December 3, 2024•10 min read
Studying abroad is a dream for many Indian students, but the high cost can be a major barrier. Education loans make this dream accessible by covering tuition fees, living expenses, and other costs. This comprehensive guide covers everything you need to know about education loans for international studies.
Why Choose Education Loan for Abroad Studies?
💰 Financial Benefits
- • Lower interest rates (7-15%)
- • Tax deduction under Section 80E
- • No collateral for loans up to ₹7.5 lakhs
- • Covers 100% education expenses
🎓 Academic Advantages
- • Moratorium period during studies
- • Flexible repayment options
- • Covers living expenses abroad
- • No income limit for student
Loan Amount Limits by Destination
| Study Destination | Average Annual Cost | Typical Loan Amount | Max Loan Limit |
|---|---|---|---|
| 🇺🇸 USA | ₹30-80 Lakhs | ₹50-1.5 Crore | ₹1.5 Crore |
| 🇬🇧 UK | ₹25-60 Lakhs | ₹40-1 Crore | ₹1.5 Crore |
| 🇨🇦 Canada | ₹20-50 Lakhs | ₹35-80 Lakhs | ₹1.5 Crore |
| 🇦🇺 Australia | ₹25-55 Lakhs | ₹40-90 Lakhs | ₹1.5 Crore |
| 🇩🇪 Germany | ₹15-35 Lakhs | ₹25-50 Lakhs | ₹1.5 Crore |
Bank-wise Education Loan Comparison
SBI
SBI Global Ed-Vantage
- Interest Rate: 7.05% p.a.
- Max Amount: ₹1.5 Crore
- Processing Fee: 0.50% + GST
- Collateral: Above ₹7.5 lakhs
- Special Feature: Government scheme benefits
HDFC
HDFC Credila
- Interest Rate: Contact bank
- Max Amount: ₹1.5 Crore
- Processing Fee: 1.00% + GST
- Collateral: Above ₹7.5 lakhs
- Special Feature: Dedicated education loan subsidiary
ICICI
ICICI Education Loan
- Interest Rate: 9.50% - 13.50% p.a.
- Max Amount: ₹1.5 Crore
- Processing Fee: 1.00% + GST
- Collateral: Above ₹7.5 lakhs
- Special Feature: Quick processing for existing customers
What Expenses Are Covered?
✅ Covered Expenses
- • Tuition fees and admission fees
- • Examination, library, and laboratory fees
- • Accommodation (hostel/rent)
- • Food and meal expenses
- • Travel expenses (to and from India)
- • Books, equipment, and instruments
- • Computer/laptop purchase
- • Study tour expenses (if mandatory)
- • Thesis and project costs
- • Health insurance
❌ Not Covered
- • Personal shopping and entertainment
- • Luxury accommodation
- • Vehicle purchase
- • Family visit expenses
- • Vacation and tourism
- • Personal loans or debts
- • Non-essential gadgets
- • Expensive lifestyle choices
Eligibility Criteria
Student Eligibility:
- 📝Age: 16-35 years at the time of application
- 🎓Education: Completed 12th standard or graduation with good scores
- 🏫Admission: Confirmed admission to recognized foreign university
- 🇮🇳Nationality: Indian citizen
- 📋Entrance Exams: Valid scores in IELTS, TOEFL, GRE, GMAT (as required)
Co-applicant Requirements:
- 👨👩👧👦Relationship: Parent, spouse, sibling, or parent-in-law
- 💰Income: Stable income with proper documentation
- 📊Credit Score: Good credit history preferred
- 🏢Employment: Stable job or business (2+ years)
Required Documents
📚 Academic Documents:
- • 10th and 12th mark sheets
- • Graduation degree and transcripts
- • Entrance exam scorecards (IELTS, TOEFL, etc.)
- • University admission letter
- • Course fee structure
- • Statement of Purpose (SOP)
💼 Financial Documents:
- • Co-applicant's income proof
- • ITR for last 2-3 years
- • Bank statements (6 months)
- • Employment certificate
- • Property documents (if collateral)
- • Loan application form
Repayment Structure
🕒 Repayment Timeline:
1
Moratorium Period: Course duration + 6 months to 1 year
No EMI during studies and job search period
2
Repayment Period: 5-15 years after moratorium
Flexible EMI based on income
3
Prepayment: Allowed without penalty
Can repay faster when income increases
Tax Benefits Under Section 80E
💰 Tax Deduction Benefits:
- • Deduction Amount: Entire interest paid (no upper limit)
- • Deduction Period: Maximum 8 years or until fully repaid
- • Who Can Claim: Student or parents/spouse who paid the interest
- • Eligible Loans: Only for higher education from recognized institutions
- • Example: If you pay ₹2 lakh interest, you save ₹60,000 in taxes (30% bracket)
Application Process Timeline
Week 1-2Document Collection & University Application
Gather all academic documents, apply to universities, prepare for entrance exams
Week 3-4University Admission & Loan Application
Receive admission letters, submit loan applications to banks with all documents
Week 5-6Bank Processing & Approval
Bank verification, property valuation (if collateral), credit assessment
Week 7-8Loan Sanction & Disbursal
Loan sanction letter, documentation completion, fund disbursal to university
Tips for Faster Approval
📋 Documentation Tips:
- • Submit complete documents in first attempt
- • Get documents attested properly
- • Maintain consistency across all documents
- • Keep digital and physical copies ready
💡 Application Tips:
- • Apply to multiple banks simultaneously
- • Choose co-applicant with strong financials
- • Maintain good relationship with bank
- • Follow up regularly with bank officials
Ready to Apply for Education Loan?
Compare education loan offers from SBI Bank, HDFC Bank, and ICICI Bank. Find the best rates and terms for your study abroad dreams.
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