Education Loan


Education loans in India have come a long way from having conservative approach to more flexible one in recent years. Hard working Students generally have no problem paying back Education Loans after finishing their studies. Overseas Education Loans to Study Abroad help many families getting a substantial funding from both Public and Private sector banks. Medical counseling service has partnered with Indian financial institutions to facilitate Education Loans for Study abroad purposes of Indian Students. We suggest banks based on their services, loan amount required and student's family financial background and location. It's faster to get Education loans these days but proper planning is required so as not to delay the University Admission process. Financial documents are must during Visa Interview and varies from country to country. We guide our students the right approach and timing to get these loans in order to secure I-20 from the University. Most Overseas education loan cover the cost of following and are paid mostly to the University directly:

  • Tuition fee.
  • Insurance fee.
  • Cost of books & supplies.
  • Accommodation costs.
  • Living expenses.
  • Travel and Transportation expenses.

Scholarships may not cover the expenses incurred as per the above list and hence timely procurement of Education loans goes a long way in maintaining the student finances in order.

  • Loans upto INR 4lacs doesn't require a Guarantor or margin.
  • Loans upto INR 7.5lacs require a third party Guarantor but no collateral.
  • Loans above INR 7.5lacs require a Guarantor as well as collateral (proof of any immovable property or asset).

Repayment of loans is dependent on banks or financial institution and generally starts after 6 months or 12 months of completion of the course. Grace period of Repayment of loans ranges from 5-15 yrs for loans above 7.5lacs but in some cases can be lower as well.

Best Time to Apply for Overseas Education Loans

Universities often gives the relaxation to get the financial documents as mentioned in International Students Financial form until the confirmed admission is secured. But the right time to look out for an Education Loan is after the Universities Application submission. That is the time when a student waits for admission acceptance from the university and can focus on arranging the funds. Once confirmed admission letter arrives, student should apply for Overseas Education loan based on the inputs from our team at M.C.S and in consultation with family and friends. It takes about 2-4 weeks to get confirmation on Loan approval and hence all required documents must be submitted correctly at the same time. It's advisable to approach multiple banks to have flexible options.

Where to Apply for Overseas Education Loans? How much is the Interest Rate?

Public sector or State Owned banks have generally lower rate of interest than the private sector banks. Rate of interest is charged on Floating rate based and hence is subject to changes as per banks revised rates. So it's always good to consult the bank officials and confirm if the loans offered are Floating rate or Fixed rate interests. Do read the documents carefully. Interest rates generally stays slightly higher for loans upto INR 4-7.5 lacs and goes down for loans upto INR 50 lacs and above.

Overall rate of interest ranges from 10.75%-14.5%. PSL rates are different and vary by about 1-8% extra on base lending rates.

How much Overseas Education loan can I get? What are the required Documents?

Education loans are subject to the policies of each bank separately. Most Nationalized banks offer loans based on :

  • Academic background of student,
  • Standardized Scores in exams like GRE/GMAT/NEET/JEE main, or other entrance exam tests,
  • Relevance of the course with last qualification attained,
  • Reputation of the college/university,
  • duration of the course (short term 6-8 month courses doesn't get approved generally),

Documents required for Overseas Education Loan are same for most banks and requirements are as under.

  • Proof of identity: Passport or Voter's ID card or driving license or PAN card or government department ID card
  • Proof of income(both Co-applicant & applicant, if working) : Latest salary slip showing all deductions or Form 16 along with recent salary certificate or IT returns for the last 2 years and computation of income for the last 2 years certified by a CA
  • Proof of residence : Bank account statement or latest electricity bill or latest mobile or telephone bill or latest credit card statement or existing house lease agreement
  • Bank statement or Pass Book where salary or income is credited Last 6 months
  • Guarantor form
  • Copy of admission letter of the Institute along with Fee schedule
  • Mark sheets / pass certificates of S.S.C, H.S.C , Degree courses.
  • Documents mentioning Assets, Immovable property holdings, liabilities verified by CA.

Following scholarships are offered to Indian students for Overseas Education.

  • JN Tata Endowment Scholarships
  • Inlaks Study Abroad Scholarships
  • KC Mahindra Scholarship for PG Studies Abroad
  • India4EU II (Erasmus Mundus) Scholarships to Study in Europe
  • Inlaks Research Travel Grants
  • TOEFL Scholarship Program in India
  • National Overseas Scholarship for Students with Disabilities
  • Dr. Ambedkar Scheme of Interest Subsidy on Educational Loan for Overseas Studies for students belonging to OBCs and EBCs
  • SERB Overseas Doctoral Fellowship Programme