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Top Education Loan Providers in India for Foreign Education

Funding the foreign education is a major factor that affects the type of course that students enroll for and also the institution selected. The best form of financing is to avail an education loan for foreign studies. Banks in India offer various schemes depending on the institution selected and the course of study. Most education loan schemes come with flexible repayment options and allow the borrower to plan his finances accordingly. Education loans carry a moratorium or holiday period which is very beneficial as the borrower is given a period of around six months after the completion of the course. The education loan repayment can be started after this period or as soon as the borrower has found a job. Education loans also cover the cost of boarding, lodging, tuition fees, travel and other related costs for the student.

Features of education loans:

  • Any individual aged between 18 and 35 years can avail an education loan to pursue studies at any approved university abroad.
  • Students can procure education loans for management courses, engineering courses, medicine, and graduate and post graduate degrees, arts, architecture, pure science, hotel management, etc.
  • The expenses covered under an education loan include tuition fees, exam fees, lab and library fees, caution deposit, travel, books and equipment, projects and study tours.
  • Borrowers have to bring in a margin of 5% to 15% for loans taken for foreign studies.
  • During the moratorium period, borrowers have to pay the interest, with the principal payment starting when the loan tenure begins.
  • Education loans can be repaid in monthly instalments through ECS or via post-dated cheques to the bank.
  • Generally, banks sanction education loans with tenure to up seven years, inclusive of the moratorium period.
  • A co-applicant has to be selected for education loans taken for full time courses. Co-applicants can include siblings, spouse, parents or other family members.
  • Banks will sanction a maximum of Rs. 20 lakhs with the moratorium period and up to a maximum of Rs. 10 lakhs for loans without a moratorium period.
  • No security has to be submitted for education loans taken up to Rs. 4 lakhs. Third party guarantee has to be furnished for loans between Rs. 4 lakhs and Rs. 7.5 lakhs and tangible collateral security is required for loans above Rs. 7.5 lakhs.
  • The Central Government has also introduced an interest rate subsidy scheme for repayments done during the moratorium period for the benefit the weaker section of the society.

Top education loans providers in India:

Given below are the top education loan providers in India aiding students wishing to pursue their education abroad.

Axis Bank:

Interest Rate 13.70% p.a. onwards
Maximum Loan Amount Rs.40 lakh
Maximum Tenure 15 years
Processing Fees At the discretion of the bank

Bank of Baroda:

Interest Rate Up to 9.85% p.a.
Maximum Loan Amount Rs.80 lakh
Maximum Tenure 15 years
Processing Fees Nil

Canara Bank:

Interest Rate Up to 9.35% p.a.
Maximum Loan Amount As per eligibility
Maximum Tenure 15 years
Processing Fees Nil

Federal Bank:

Interest Rate 10.05% p.a. onwards
Maximum Loan Amount Rs.20 lakh
Maximum Tenure 15 years
Processing Fees Nil

HDFC Bank:

Interest Rate As per scheme
Maximum Loan Amount Rs.30 lakh
Maximum Tenure 15 years including moratorium period
Processing Fees Maximum of 1% of the loan amount or minimum of Rs.1,000 whichever is higher

State Bank of India (SBI):

Interest Rate 6.85% p.a. - 8.65% p.a.
Maximum Loan Amount Rs.1.5 crore
Maximum Tenure 15 years
Processing Fees Rs.10,000

Punjab National Bank:

Interest Rate 7.40% p.a. - 10.05% p.a.
Maximum Loan Amount As per requirement as repayment capacity
Maximum Tenure 15 years
Processing Fees 1% of the loan amount, subject to a minimum amount of Rs.10,000


Interest Rate 10.50% p.a. onwards
Maximum Loan Amount Rs.1 crore
Maximum Tenure 12 years
Processing Fees As per RAAC pricing + GST


  1. What documents do I need to submit to avail an education loan?
  2. The list of documents that must be submitted to avail an education loan are mentioned below:

    • Liabilities and assets of all the borrowers.
    • Proof of identity.
    • Proof of address.
    • Income Tax Returns that are less than 2 years old.
    • Passport-size photographs (two).
    • Foreign exchange permit.
    • Letter that confirms the scholarship.
    • Course expenses.
    • Admission proof.
    • Relevant mark sheets.
  3. Does SBI charge any processing fee on its foreign education loan?
  4. A: Yes, the State Bank of India (SBI) charges a processing fee of Rs.10,000 for every application.

  5. What is the procedure to avail an education loan from SBI?
  6. A: In order to avail an education loan from SBI, you must visit the nearest bank branch or apply from the official online portal.

  7. How long does it take for Axis Bank to decide on the education loan application?
  8. Providing all the relevant details have been submitted, Axis Bank may take up to 15 working days to give a decision on the education loan application.

  9. Will Axis Bank allow me to change the interest rate from a fixed rate to a floating rate?
  10. Yes, Axis Bank gives you the option to change the interest rate from a fixed rate to a floating rate.

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