Wondering whether to study in India or abroad? This decision might be difficult to make as it is influenced by factors like cost, quality of education, and personal aspirations. However regardless of the chosen destination, education loans play a crucial role in making higher education accessible.
This blog explains education loans in India and education loans for studying abroad in 2025. Students exploring the best financing options to cover their education costs will find this guide highly valuable.
Education Loans in India
Key Features
- Loan Amount: Education loans in India typically go up to Rs. 7.5 lakh. This amount can cover tuition fees, hostel expenses, and other academic costs.
- Collateral and Margin: Loans up to Rs. 4 lakh do not require collateral or margin. For higher loan amounts, lenders may ask for collateral as security.
- Interest Rate: Interest rates on education loans up to Rs. 4 lakh are usually limited to the Prime Lending Rate (PLR). For loans exceeding Rs. 4 lakh, the interest rate is generally PLR plus 1%.
- Repayment Period: Students get a repayment period of 5 to 7 years, with a one-year grace period after completing their studies. This allows them to secure a job before starting repayments.
- Tax Benefits: Under Section 80E of the Income Tax Act, students can claim tax deductions on the interest paid for a maximum of eight years.
Loan Providers
- Many financial institutions provide collateral-free education loans that cover all academic expenses, including tuition fees, accommodation, and other essentials. Some domestic education loan providers even offer expert consultation to help students navigate the application process efficiently and secure the best loan terms based on their needs.
- State Bank of India (SBI): SBI offers education loans in India under the Education Loan Scheme, providing competitive interest rates on education loans and flexible repayment terms.
- Other Banks: Many public and private sector banks like HDFC Bank, ICICI Bank, and Axis Bank offer student loans in India, covering tuition fees, accommodation, and study materials.
Education Loans for Studying Abroad
Key Features
- Loan Amount: Education loans for studying abroad can be significantly higher, often reaching Rs. 15 lakh or more. Some schemes, like SBI’s Global Ed-Vantage, offer loans up to Rs. 3 crore.
- Collateral and Margin: While some lenders provide collateral-free education loans for selected universities, high loan amounts often require collateral such as property, fixed deposits, or other financial assets.
- Interest Rate: Interest rates on education loans for international studies vary. For example, SBI’s Global Ed-Vantage Scheme has a starting interest rate of 10.15%.
- Repayment Period: The repayment period is usually longer, often extending up to 15 years. A grace period is typically given after completion of studies.
- Eligibility: Students applying for an overseas education loan must have secured admission to a recognized foreign university. A co-borrower, such as a parent or guardian, is usually required.
Loan Providers
- Many certified lenders offer overseas education loans covering tuition, accommodation, and living costs, with expert guidance for seamless approval and best terms.
- State Bank of India (SBI): Offers the Global Ed-Vantage Scheme and the Student Loan Scheme, both designed for student loans for overseas study.
- Other Providers: Banks and non-banking financial companies (NBFCs) like HDFC Credila and Avanse Financial Services also offer student loans for study abroad with flexible repayment options.
*Comparison of Education Loans for India and Abroad
| Feature | Studying in India | Studying Abroad |
| Loan Amount | Up to Rs. 7.5 lakh | Up to Rs. 15 lakh or more |
| Collateral | Not required for loans up to Rs. 4 lakh | Often required for higher amounts |
| Interest Rate | PLR or PLR + 1% | Varies, e.g., SBI’s Global Ed-Vantage at 10.15% |
| Repayment Period | 5 to 7 years | Typically up to 15 years |
| Tax Benefits | Available under Section 80E | Available under Section 80E |
*Loan amounts may vary as per the country’s specific requirements.
Tips for Choosing the Right Education Loan
- Compare Interest Rates: Different lenders offer varying interest rates on education loans, so compare options to find the most affordable one.
- Check Eligibility Criteria: Ensure that you meet the lender’s requirements, including admission criteria and co-borrower conditions.
- Assess Repayment Terms: Look for flexible repayment options and a grace period that aligns with your career plans.
- Evaluate Collateral Requirements: If collateral is required, check whether you have the necessary assets to secure the loan.
- Consult Financial Advisors: If needed, seek professional guidance to select the best loan option for your situation.
By carefully considering these factors, students can choose an overseas education loan or domestic loan that supports their aspirations while keeping financial stress to a minimum.
Unipay Education Loan Services
Unipay provides comprehensive solutions for education loans for abroad studies and domestic higher education. Our services include:
- Loan Assistance: Helping students secure the best education loan providers with competitive interest rates on education loans and flexible repayment terms.
- Forex Services: Providing cost-effective foreign exchange solutions for students studying abroad, including tuition fee payments and living expenses.
- Financial Planning: Offering expert guidance to students and parents on managing loan repayments and reducing financial burden.
We simplify the loan application process by partnering with top financial institutions, ensuring students get student loans for overseas study tailored to their needs.
Conclusion
Education loans are an essential financial tool for students pursuing higher education in India or abroad. By understanding the differences in loan terms, interest rates on education loans, and repayment structures, students can make informed decisions that suit their academic and financial goals.
Unipay Forex can help you make an informed decision suited to your best needs. Connect with our experts and get started.
