India, abroad & security
Education Loan for Studies Abroad
Bank vs NBFC loans for studying abroad — rates, collateral, 15% margin, TCS, disbursal and visa timing.
Updated 27 September 2026 · 8 lenders trackedLowest education loan rate
6.75%
Union Bank Education LoanWhat you need to know
Study-abroad loans are larger, so security and margin matter more. Public-sector banks offer lower rates but usually need collateral above ₹7.5 lakh (except for select universities), while NBFCs such as Credila lend up to ₹75 lakh without collateral at higher rates. Margin above ₹4 lakh is 15% under the IBA scheme.
India vs abroad
| Point | Study in India | Study abroad |
|---|---|---|
| Margin (above ₹4 lakh) | 5% | 15% |
| Typical loan size | ₹2 lakh – ₹20 lakh for most courses; higher for medical and top management programmes | ₹20 lakh – ₹1 crore+ depending on country and course |
| Collateral | Often none for premier institutes (bank lists) and up to ₹7.5 lakh elsewhere | Usually needed above ₹7.5 lakh at banks; NBFCs such as Credila lend up to ₹75 lakh unsecured |
| Typical rates | 6.75% – 8.5% at premier institutes; about 9.25% – 11.25% otherwise | SBI Global Ed-Vantage 9.40%; Bank of Baroda Scholar 8.45% – 9.90%; Credila 8.95% – 13% |
| Processing fee | Often nil at public-sector banks | 0.5% – 1.5% (e.g. SBI 0.50% capped at ₹50,000; HDFC Bank 1.5%) |
| Government interest schemes | CSIS and PM-Vidyalaxmi subvention can apply | Not covered by CSIS or PM-Vidyalaxmi |
| Costs financed | Tuition, hostel, exam, books, laptop, deposits | Also travel, health insurance, living costs, visa-related deposits |
| Disbursal | Fees paid to the college each term | Tuition wired to the university in foreign currency; living costs to the student’s account; usually after visa |
| Tax collected at source (TCS) | Not applicable | Nil on remittances financed by a loan from a financial institution (from 1 Apr 2025) |
Study-abroad loan options
| Lender / scheme | Key terms |
|---|---|
| SBI Global Ed-Vantage | 9.40% (8.90% select institutions with collateral); ₹7.5 lakh – ₹3 crore; moratorium course + 6 months |
| Bank of Baroda Scholar | 8.45% (premier) to 9.90%; up to ₹150 lakh (premier) / ₹60 lakh |
| PNB Udaan | 9.25% (female) / 9.80% (male) onwards; no prepayment penalty |
| Union Bank premier abroad | 8.00% – 8.50%; up to ₹150 lakh |
| Credila (NBFC) | 8.95% – 13%; up to ₹75 lakh unsecured, ₹1.5 crore secured; pre-admission sanction |
| HDFC Bank | 9% – 14.1%; 1.5% processing fee |
Money, visa and TCS
- Sanction letters are commonly used as proof of funds for visa applications.
- Tuition is wired to the university; living costs go to the student’s account in tranches, usually after the visa is issued.
- From 1 April 2025, remittances for education financed by a loan from a financial institution carry no TCS; self-funded education remittances attract TCS above the annual threshold.
- The loan is in rupees, so a weaker rupee raises your cost — keep a buffer.
Cost checklist
| Cost | How it is estimated | Usually financed? |
|---|---|---|
| Tuition and university fees | Per the I-20 / CAS / CoE or offer letter | Yes — paid directly to the university |
| Living costs (rent, food, transport) | University’s cost-of-attendance estimate or visa proof-of-funds amount | Yes — released in tranches to the student’s account |
| Travel (one-way/return airfare) | Economy fare | Yes (passage money) |
| Health insurance | Often compulsory (e.g. OSHC in Australia, IHS in the UK, university plans in the US) | Yes — insurance premium for the student is an eligible cost |
| Laptop and study equipment | At a reasonable cost, if required for the course | Yes |
| Caution / housing deposits | Refundable deposits supported by bills | Yes, within limits (typically up to 10% of tuition for the course) |
| Visa fees, SEVIS, application fees, tests | Pre-admission costs | Often not — some lenders reimburse; check |
| Books, study tours, thesis/project work | Per estimate | Yes |
| Currency buffer | 5% – 10% for exchange-rate moves | Plan for it — loans are sanctioned in rupees |
Frequently asked questions
Can I get a study-abroad loan before admission?
Banks sanction after admission. Credila offers pre-admission sanction so you know your budget while applying.
Is CSIS or PM-Vidyalaxmi available for study abroad?
No. Both are for courses in India.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.