Education Loan for Studying Abroad: Pursuing higher education overseas is a dream for many Indian students. However, the cost of tuition, accommodation, travel, and living expenses can be overwhelming. This is where education loans for studying abroad become essential, offering financial support to help students focus on academics rather than financial stress.
With the February 2026 academic intake approaching, now is the ideal time for students to research and compare education loan options. Many leading Indian banks offer loans starting at 8.25% per annum, making overseas education more accessible and affordable.
Top Banks Offering Education Loans for Studying Abroad (2025–26)
Here’s a quick look at popular Indian banks and their current education loan interest rates for international studies:
| Bank Name | Starting Interest Rate (p.a.) | Loan Coverage | Maximum Loan Amount | Processing Fees |
|---|---|---|---|---|
| State Bank of India (SBI) | From 8.25% | Tuition fees, living expenses, travel, insurance | Up to ₹1.5 crore | ~0.5% of loan amount |
| Punjab National Bank (PNB) | From 8.40% | Comprehensive coverage including accommodation | Up to ₹1 crore | ~1% of loan amount |
| Bank of Baroda | From 8.50% | Tuition, books, travel, living costs | Up to ₹1.5 crore | ~0.50% |
| ICICI Bank | From 8.85% | Tuition, living expenses, insurance | Up to ₹2 crore | 1% – 2% |
| HDFC Bank | From 9.00% | Tuition, travel, living costs | Up to ₹45 lakh (higher on case basis) | ~1% |
| Axis Bank | From 9.10% | Tuition, living, exam fees, other costs | Up to ₹75 lakh (higher for select courses) | ~1% |
| Canara Bank | From 9.20% | Tuition, accommodation, exam fees | Up to ₹1.5 crore | ~0.5% |
| IDBI Bank | From 10.25% | Tuition and allied expenses | Up to ₹50 lakh | ~1% |
What to Consider When Choosing an Education Loan
While interest rate is an important factor, students should also evaluate other terms and conditions before finalizing a lender.
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1. Interest Rates and Type
- Compare fixed vs. floating interest rates. Floating rates may offer savings if rates fall but can increase if rates rise.
2. Loan Tenure and Repayment Period
- Most education loans offer repayment periods of up to 15 years. Longer tenures mean lower EMIs but higher overall interest.
3. Processing Fees and Other Charges
- Banks may charge processing fees ranging from 0.5% to 2%. Some offer waivers for high-value loans or select universities.
4. Moratorium Period
- Most banks offer a moratorium period (course duration + 6–12 months) before repayment begins, giving students time to secure a job.
5. Preferential Rates for Top Institutions
- Many lenders provide lower interest rates for students admitted to top-ranked global universities or specialized programs.
6. Coverage and Additional Benefits
- Look for loans that fully cover tuition, travel, living expenses, exam fees, and health insurance.
- Some banks offer pre-visa disbursement and tax benefits under Section 80E of the Income Tax Act.
Tips for Getting the Best Education Loan Deal
Apply early: Start your loan process at least 3–4 months before admission.
Check eligibility: Good academic records, a strong co-applicant profile, and collateral (if needed) improve approval chances.
Compare multiple lenders: Use loan comparison tools or approach multiple banks/NBFCs before deciding.
Negotiate terms: If you have multiple offers, try negotiating for a lower rate or reduced fees.
Conclusion
Education loans play a crucial role in turning the dream of studying abroad into reality. With major banks offering interest rates starting at 8.25%, students have multiple options to fund their overseas education. By comparing interest rates, repayment terms, moratorium periods, and loan coverage, students can choose a plan that best fits their financial situation and academic goals.
Planning ahead and applying early not only improves your chances of approval but also ensures a smoother transition to your international education journey.
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FAQs
1. What is the minimum interest rate on education loans for studying abroad?
The lowest education loan interest rates currently start from 8.25% per annum, offered by banks like SBI and Bank of Baroda.
2. Can I get a loan without collateral?
Yes, many banks and NBFCs offer unsecured loans up to ₹40–₹45 lakh for select courses and institutions. Higher loan amounts usually require collateral.
3. When do I start repaying my education loan?
Repayment typically starts 6–12 months after course completion or once you get a job, whichever is earlier. This is known as the moratorium period.
4. Do education loans cover living and travel expenses?
Yes, most education loans cover tuition fees, living costs, travel, exam fees, and insurance, depending on the lender and loan terms.
5. Are there any tax benefits on education loans?
Yes, under Section 80E of the Income Tax Act, the interest paid on education loans is eligible for a tax deduction for up to 8 years.
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