Every year, thousands of Indian students aspire to study at one of the world’s top universities in the USA, UK, Canada, Australia, and Europe. However, for most families, studying abroad was just a dream, as the increased cost of tuition, accommodation, travel, and living made it seem impossible. In 2025, the average cost of a 2-year master’s degree overseas can vary ranging from Rs.25 to Rs.60 lakh, and undergraduate courses can be even higher. That’s a big financial gap for a middle-class student!
Now, the good news is that in India now, getting a study abroad education loan is accessible like never before as banks, financial institutions, NBFCs and even overseas funding platforms have opened up access making it easier and faster than ever before. Whether you have collateral to pledge or not, you can still secure a high-value education loan, if you understand the process correctly.
In this Study Abroad Loan Guide 2025, we will walk you through every step of how Indian students can get funding easily from eligibility and documentation to comparing banks and tips for fast approval. As an experienced education loan advisor who has guided 1,000+ students to secure funds successfully, I’ll share insider knowledge, real-world advice, and practical examples that will help you avoid common pitfalls and make the right decisions.
Let’s get started, your global education dream is just one smart loan away.
Eligibility Criteria for Study Abroad Loans
When applying for a study abroad loan in India, meeting the eligibility criteria is the first and most crucial step. Whether you’re approaching a government bank like SBI or Bank of Baroda, a private lender like ICICI or HDFC Credila, or an NBFC like Avanse or InCred, most lenders follow similar core eligibility rules. However, understanding the finer points can significantly improve your chances of approval.
Here’s a breakdown of the eligibility criteria for study abroad education loans:
| Requirement | Details |
|---|---|
| Nationality | Indian citizen with a valid passport |
| Age | 18 to 35 years (at the time of loan application) |
| Admission Confirmation | Secured admission or offer letter from a recognized foreign university |
| Academic Background | Minimum 60% marks in 10th, 12th, and graduation (varies by lender) |
| Eligible Courses | Full-time UG/PG/PhD programs in STEM, management, arts, etc. |
| Eligible Countries | USA, UK, Canada, Australia, Germany, Ireland, Singapore, etc. |
Co-applicant Criteria
In general, all unsecured (no collateral) education loans need a co-applicant with a regular income:
- Can be a parent, sibling, or spouse showing Indian income proof
- Needs a good CIBIL score (650+) and repayment capacity
- Preferably, salaried or self-employed co-applicant with a valid ITR
- NRIs may have additional paperwork (in some cases)
Criteria for Loan Amount
- Loans up to Rs.7.5 lakh: Generally don’t need collateral if the co-applicant’s profile is good
- Loans above Rs.7.5 lakh: Need either collateral or a good co-applicant
- NBFC’s Avanse, InCred, and Auxilo: May offer you all the way up to Rs.75 lakh without collateral based on your academic profile and university
More Considerations from Lenders
- Whether university is Ivy League, Group of 8, etc.
- Expected ROI/Employment Potential of course
- GRE/GMAT/IELTS scores, which are not always necessary but do help
- Co-applicant or your own liabilities
- Previous visa refusals (in some cases)
Documents Required for Fast Approval
When your documentations are complete and organized, applying for a study abroad loan is much easier. Whether you are applying to a public sector bank like SBI, or a Non Banking Financial Company (NBFC) like HDFC Credila, if you have the accurate documents in a timely manner, you can reduce your approvals time frame from weeks to days!
Here is a list of key documents from us to keep on hand in order to fast-track your approval in 2025:
Student Documents
| Document | Purpose/Why It’s Needed |
|---|---|
| Passport (first & last page) | Identity proof & foreign travel eligibility |
| Recent passport-size photographs | For official records and application forms |
| 10th, 12th & graduation mark sheets | Academic eligibility assessment |
| Entrance exam scores (IELTS, TOEFL, GRE) | For university & lender evaluation |
| Admission/offer letter from university | Confirms eligibility for education loan |
| Statement of Purpose (SOP) | Especially needed for NBFCs to judge career goals |
| Visa copy (if available) | Validates study abroad plan |
| Gap certificate (if applicable) | Explains academic/professional gaps |
Co-applicant/Guarantor Documents
| Document | Purpose |
|---|---|
| PAN card & Aadhaar card | Identity and KYC verification |
| Salary slips (last 3 months) or ITRs | Proof of income and repayment capacity |
| Bank statements (last 6–12 months) | Verifies financial stability and ongoing liabilities |
| Employment letter or business proof | Confirms source of income |
| Form 16 (if salaried) | Tax proof for salaried co-applicant |
| CIBIL report/credit score | Lender uses this to evaluate creditworthiness |
Collateral Documents (if applying for a secured loan)
| Document | Purpose |
|---|---|
| Property title deed | Proof of ownership of the pledged asset |
| Encumbrance certificate | To ensure asset is free from legal dues |
| Recent property tax receipt | Validates property and municipality status |
| Property valuation report (if asked) | Assesses the current market value |
Types of Lenders Offering Education Loans for Abroad Studies
When it comes to funding your education abroad, choosing the right lender is critical. In India, three major types of lenders provide international education loans: Public Banks, Private Banks & NBFCs, and International Lenders. Each category has its own advantages, interest rates, and eligibility norms.
1. Public Sector Banks
These traditional banks are often the most trusted choice for secured (collateral-based) loans, offering lower interest rates and longer repayment tenures.
| Feature | SBI – Global Ed-Vantage Scheme | PNB – Udaan Scheme |
|---|---|---|
| Maximum Loan Amount | Rs.1.5 Cr (with collateral)Rs.50L (without collateral) | Up to Rs.2 Cr (with collateral) |
| Interest Rate | 9.65% (for women)10.15% (for men) | 9.25% (Top 50 universities)Up to 10.50% otherwise |
| Loan Tenure | Up to 15 years | Up to 15 years |
| Moratorium Period | Course duration + 12 months | Course duration + 12 months |
| Disbursement | Pre and post-disbursement allowed | Available (based on requirement) |
| Collateral Requirement | Optional (required for loans > Rs.50L) | Mandatory for full loan amount |
| Ideal For | Wide range of foreign universities | Students admitted in top-ranked universities |
2. Private Sector Banks
Private banks are preferred by students who want unsecured loans with faster processing times.
| Feature | ICICI Bank | Axis Bank |
|---|---|---|
| Loan Amount | Rs.20L – Rs.1.5 Cr | Up to Rs.1 Cr (no collateral) |
| Interest Rate | 10.25% (secured)11.25% (unsecured) | 11% – 11.5% |
| Tenure | 10 years | 15 years |
| Moratorium Period | Course + 6 months | Course + 6 months (typically) |
| Categories | Premium (Top 100 universities)General | Prime A (min Rs.40L)Prime B (min Rs.25L) |
| Collateral Requirement | Optional (depends on loan type) | Not required |
| Ideal For | Students with top-ranked admits or collateral | High loan amount without collateral |
3. Non-Banking Financial Companies (NBFCs)
NBFCs offer more flexible, collateral-free loan options with customized plans for students.
| Feature | HDFC Credila | Avanse |
|---|---|---|
| Loan Amount | Up to Rs.75L (no collateral) | Up to Rs.50L (no collateral) |
| Interest Rate | ~11% | ~11.5% |
| Tenure | 10 years | 15 years |
| Categories | A, B, C (based on GRE & academics) | A, B, C (based on university & profile) |
| Collateral Requirement | Not required | Not required |
| Ideal For | Students with strong academic profiles | Students with promising university admits |
4. International Lenders
These lenders specialize in providing collateral-free loans for global students, especially those lacking a co-applicant or Indian financial background.
| Feature | MPOWER Financing | Prodigy Finance |
|---|---|---|
| Loan Amount | Up to $100,000 | Up to Rs.50 Lakh |
| Interest Rate | 9.99% p.a. | 10.5% – 14% |
| Tenure | 10 years | 10 years |
| Extras / Features | Visa prep, US bank account assistance, credit cards | Supports over 1,500 universities worldwide |
| Best For | Students going to the US or Canada | Global students for many universities |
Education Loan Without Collateral – Is It Possible?
Indian students can absolutely get an education loan without collateral (also called an unsecured loan) to study abroad but approval hinges on a strong applicant profile.
An unsecured education loan is one in which the bank or financial institution doesn’t take any property, fixed deposit, or other asset as collateral. The bank or financial institution mainly relies on aspects like your academic record, university ranking, co-applicant profile, and your overall creditworthiness.
So when is it possible to get a collateral-free study abroad loan?
- You have received admission into a leading global university (especially in the United States, United Kingdom, Canada, or Germany).
- Your academic performance has been decent (generally 60% and above in previous academics).
- Your co-applicant (typically a parent/sibling) has a steady income, a good CIBIL score (typically above 700).
- You are applying for courses in the highly employable sectors, such as STEM, Management, or Finance.
There are several leading lenders in India offer collateral-free education loans with high loan limits in 2025. Here’s a comparison:
| Lender | Loan Amount (No Collateral) | Interest Rate (p.a.) |
|---|---|---|
| HDFC Credila | Up to Rs.75 lakh | 11.5% – 13.5% |
| Avanse | Up to Rs.60 lakh | 12% – 13.5% |
| InCred | Up to Rs.65 lakh | 11.5% – 13.5% |
| ICICI Bank | Up to Rs.50 lakh | 10.25% – 12.5% |
Advantages of Abroad Education Loan
If you are planning to study abroad and decide to pursue an education loan there are several benefits, that can help ease your burdens:
- Sponsor Your Abroad Education: Education loans can cover the entire cost of an educational expense abroad. Hence it can help fund your tuition, accommodation, travel and more.
- Flexible Repayment Plans: The majority of education loans are financed through lenders who allow flexible repayment options that account for your financial situation so you can organize the loan repayment to work for you.
- Government Schemes Benefits: You can benefit from different government schemes that help sponsor education loans so you can make education financing more affordable.
- Moratorium (Graces) Period: Most lenders will provide (grace) moratorium period for which you do not need to pay anything back. Hence, you can devote yourself to study and not have immediate financial obligations weighing on you.
- Tax Benefits: You can claim tax benefits on the interest paid on the education loan under section 80E of the Income Tax Act that helps ease the total tax liability.
How Do I Apply for a Student Loan to Study Abroad?
Applying for an education loan to study abroad can be confusing, but you can simplify the process by breaking it down into distinct, manageable steps. Below is an outline of the traditional timeline for the study abroad loan process:
1. Check Eligibility & Shortlist Lenders
Check eligibility using your academic profile, admission, program, and country. Compare banks, and NBFCs, using:
- Interest rates
- Collateral
- Processing time
- Quality of customer service
2. Collect Required Documents
The required documents for student loan applications are generally a mixture of documentation from the student and co-applicant (parent or guardian). Collecting these documents could be a cumbersome task; make sure to gather:
- The admission letter from the foreign university
- All academic used transcripts (e.g., transcripts and IELTS/GRE/TOEFL test scores)
- Identity / address proof
- Proof of co-applicant income and employment
- Property documentation (if applying with collateral)
3. Apply Online or Offline
Once you have completed the preparations necessary to apply for an education loan, you can apply directly through the lender’s website or a branch office. Some NBFC’s and aggregators will allow you to complete the application simply through a digital format.
4. Loan Sanction (Typically 7–15 Days)
Once your documents have been verified, and your eligibility has been confirmed, you will receive a sanction on your loan. The sanction letter will indicate the sanction amount, interest rate and terms of the loan.
Some lenders have a pre-visa sanction letter, so if this is a requirement for student visas this may be an option for you.
5. Disbursement in installments to University
The total agreed approved amount will be disbursed in installments to your account usually indirectly to your university (tuition fees), or into your account (living costs) depending on the repayment schedule.
How to Improve Your Chances of Getting Approved for an Education Loan
- Apply early (March – June) for a Fall intake
- Research universities that are well-ranked (preferably in the lenders approved list)
- Demonstrate financial stability through co-applicant income
- Do not apply for multiple lenders at the same time because it will affect your credit score
- Seek help from education loan consultants
Common Mistakes Students Make While Applying
- Not submitting the correct or complete documents
- Failing to verify if their university is on the lender’s list
- Choosing the cheapest bank without verifying its disbursement duration
- Not protecting themselves with insurance (important in the case of financial emergencies)
- Misunderstanding the terms of their repayments
Ready to Apply for Your Study Abroad Education Loan?
Financial challenges should not hinder your journey to your dream university. With the right loan, advice, and planning, studying abroad can be just as much of a reality as it is a dream.
No matter if you need a no collateral loan for a leading US university, or possibly a low interest, secured loan from SBI, we have you covered.
Book a FREE Expert Call Now Or Whats App Us for step by step guidance from India’s trusted education loan experts.
FAQs: Study Abroad Loan Guide 2025
Q. Can Indian students obtain an education loan without collateral for studying abroad?
A. Various NBFCs and international lenders such as MPOWER, Avanse, and InCred provide unsecured loans, which consider academic profile and income proof of the co-applicant.
Q. What is the maximum loan amount available for studying abroad?
A. Indian based banks and NBFCs, can provide education loans up to Rs.75 lakh and international lenders can provide education loans of up to $100,000 or more based on eligibility.
Q. What are the relevant documents required for education loan for studying abroad?
A. Required documents usually include passport, admission letter, academic record, entrance exam score, co-applicant income proof, and property documents (for secured loans).
Q. What are the best banks for education loans for abroad in 2025?
A. Based on your needs, some of the best banks for education loans will be public banks (e.g. SBI, Global Ed-Vantage) private banking (e.g. ICICI) or NBFCs (e.g. HDFC Credila).
Q. What is interest rate for education loans to study abroad?
A. Interest rates vary between 9.25% to 14%, depending on the lender, the type of loan taken (secured or unsecured, etc.), if the loan is secured or unsecured and your profile.
Q. Do I need a co-applicant for education loans for students studying abroad without collateral?
A. All unsecured loans require a co-applicant who has a stable income and good credit score.
Q. How long does it take to get a study abroad loan approved?
A. The timeframe is 7 to 15 working days depending on lenders and document submissions.
Q. Can I get a loan for living expenses along with tuition fees?
A. Most lenders cover tuition fees, living expenses, travel, insurance, and visa costs.