What Is a Study Abroad Loan?
A Study Abroad Loan is a specialized education loan designed to finance higher studies outside your home country. It covers tuition fees, living expenses, travel, insurance, books, and other academic costs.
In 2026, study abroad loans are more structured, offering higher loan limits, longer repayment tenures, and flexible moratorium periods for international students.
Key Features of Study Abroad Loans
- Higher loan amount compared to domestic education loans
- Coverage for tuition, accommodation, travel, and living costs
- Flexible repayment tenure up to 15 years
- Moratorium during study period
- Available for top global universities
- Option of secured and unsecured loans
Study Abroad Loan Interest Rates 2026
Interest rates depend on destination country, university ranking, collateral, and co-applicant profile.
| Lender Type |
Interest Rate (p.a.) |
Maximum Loan |
Repayment Tenure |
| Public Sector Banks |
8.25% – 11.00% |
₹40 – ₹60 lakh |
Up to 15 years |
| Private Banks |
9.75% – 13.75% |
₹75 lakh+ |
Up to 15 years |
| NBFCs |
11.00% – 16.00% |
₹1 Crore+ |
Up to 12 years |
Eligibility Criteria for Study Abroad Loans
- Confirmed admission to a recognized foreign university
- Indian citizen or eligible international applicant
- Co-applicant with stable income
- Strong academic profile
- Collateral required for higher loan amounts
Documents Required
- Passport and visa documents
- University offer letter
- Course fee structure
- Academic records and test scores
- Co-applicant income proof
- Collateral documents (if applicable)
Country-wise Cost Coverage
- USA: Tuition, housing, insurance, research costs
- UK: Tuition, accommodation, living expenses
- Canada: Education, travel, living costs
- Australia: Tuition, visa, OSHC insurance
- Europe: Tuition and maintenance costs
Study Abroad Loan EMI Example
If you take a study abroad loan of ₹30,00,000 at 10.5% interest for 12 years:
- Monthly EMI: ₹39,500 (approx.)
- Total interest payable: ₹26,80,000 (approx.)
- Total repayment amount: ₹56,80,000 (approx.)
Advantages and Disadvantages
Advantages
- Access to global education opportunities
- High loan limits
- Deferred repayment support
- Tax benefits on interest paid
Disadvantages
- Collateral often required
- Higher interest rates without security
- Currency exchange risk
Frequently Asked Questions (FAQs)
Is collateral mandatory for study abroad loans?
Collateral is required for higher loan amounts depending on lender policies.
Can I get a study abroad loan without a co-applicant?
Most lenders require a co-applicant with stable income.
When does repayment start?
Repayment usually starts after course completion plus the moratorium period.
Are study abroad loans tax deductible?
Yes, interest paid may qualify for tax benefits as per applicable laws.
Author: All Finance Store Editorial Team
Specialization: Overseas Education Finance
Last Updated: January 2026
Disclaimer: This content is for informational purposes only. Loan terms, interest rates, and eligibility may vary by lender. Always verify details with official lender sources before applying.