Can Indian Students Get a Loan for Studying Abroad?
Yes — and it is easier than most families assume. Indian banks and NBFCs lend up to ₹75–1.5 crore for overseas education at Top-100 global universities. 62% of Indian students going abroad fund their education partly or fully through an education loan. The key is understanding which lender gives the best rate for your specific university and loan amount.
Education Loan Providers Comparison (2026)
| Lender | Interest Rate | Max Loan | Collateral | Best For |
|---|---|---|---|---|
| SBI Global Ed-Vantage | 10.9%–11.15% | ₹1.5 Cr | Required above ₹7.5L | Large loan, lowest rate |
| HDFC Credila | 11%–13% | ₹75 L (more for top unis) | Flexible | Fast processing, NBFC |
| Axis Bank | 11%–13.7% | ₹75 L | Required above ₹7.5L | NRI co-applicant friendly |
| Avanse Financial Services | 11.5%–14% | ₹75 L | Without collateral option | No collateral loans |
| InCred Education Loan | 12%–14% | ₹60 L | Without collateral | Quick disbursement |
| MPOWER Financing (USA/Canada) | 13%–15% (USD) | $100,000 | No collateral, no co-signer | US/Canada with no Indian collateral |
| Prodigy Finance | 7%–15% (USD, variable) | $220,000 | No collateral, no co-signer | Top-25 US/UK/EU universities only |
Secured vs Unsecured Study Abroad Loans
Secured Loans (With Collateral)
- Interest rate: 9.5%–11.5% — significantly cheaper
- Collateral accepted: Residential property, FD receipts, NSC, LIC policy (surrender value)
- Loan amount: Up to ₹1.5 Cr (SBI) or market value of collateral
- Best for: Students whose families own property or have significant FD savings
Unsecured Loans (Without Collateral)
- Interest rate: 12%–15% — higher, but no property risk
- Loan amount: ₹30–75 lakh typically
- Approved based on: University name (Top-50 global = easier approval), co-applicant income, student's academic profile
- Best for: Students at Top-100 global universities where salary post-graduation is high enough to repay comfortably
What Expenses Are Covered in Study Abroad Loan?
- Tuition fees (the largest component)
- Living expenses (typically capped at 50% of total loan)
- Travel expenses (flights)
- Health insurance / OSHC
- Study materials, laptop
- Visa fees
- Caution deposit / security deposit for accommodation
EMI Calculation: What Will You Pay Back?
Typical repayment scenarios for a ₹40 lakh study abroad loan at 11.5% interest:
| Repayment Period | Monthly EMI | Total Interest Paid |
|---|---|---|
| 5 years | ₹88,000 | ₹12.8L |
| 10 years | ₹56,000 | ₹27.2L |
| 15 years | ₹46,000 | ₹42.8L |
Rule of thumb: Your first year's foreign salary should be at least 3× your annual EMI. A UK graduate earning £50,000 (₹52L) with a ₹56,000/month EMI (₹6.7L/yr) is very comfortable — the loan is 13% of gross salary.
Tax Benefit on Study Abroad Loan
Under Section 80E of the Income Tax Act, interest paid on education loans (taken for self, spouse, children, or ward) is fully deductible from income tax — no upper limit. This benefit applies for 8 consecutive years from the year you start repaying. If you return to India and work, you can claim this deduction on your Indian income.
Plan Your Study Abroad Loan with StudyFar
StudyFar's financial planner compares loan offers from SBI, HDFC Credila, Axis, Avanse, and MPOWER based on your university, country, and loan amount. Compare loan options free or read our full cost comparison guide.