Zolve: Unlocking Study Abroad Dream
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Unlocking Your Dream Education Abroad: A Guide To Study Abroad Loans

Latika Sharma
Study Abroad: Moving to USA

Embarking on the adventurous journey of higher education overseas is exhilarating.

It is a gateway to cross-cultural experiences and infinite global opportunities. However, one stumbling block stands tall in achieving this dream: financial hurdles. Enter Study Abroad Loans, the knight in shining armor for students with dreams of overseas education. They offer an economic lifeline, making the dream possible and within reach of those aspiring for overseas education.

This comprehensive guide will navigate the Study Abroad Loans world, giving you the essential knowledge to make informed decisions.

The Need for Study Abroad Loans

While it is evident that Study Abroad Loans are education loans to study abroad, a student may need them for the following purposes:

  • Tuition Fee: Due to the difference in currency value, international tuition fees can be significantly higher than domestic fees. These loans help cover such tuition costs.
  • Living Expenses: The cost of living overseas can be hefty. This cost of living includes various components, such as rent, food, transportation, utility bills, etc.
  • Currency Fluctuations: Since studying abroad involves dealing with foreign currency, currency exchange involves converting domestic currency into foreign currency. The conversion rate for currency keeps on fluctuating, impacting your budget. Study Abroad Loans help create a wall of defense against such fluctuations.
  • Travel Costs: Visas and health insurance are necessary expenses for traveling back home and going on summer trips. Even studying abroad requires a visa and health insurance. These loans help cover such costs, too.
  • Study Material: Study material, including books, electronic devices, and other educational online subscriptions such as newsletters, are often expensive abroad.
  • Emergency Funds: Certain unforeseen and unfavorable circumstances, aka emergencies, can arise, creating the need for immediate financial resources. Study Abroad Loans also act as an emergency fund.

Types of Study Abroad Loans

When funding your education abroad, there are multiple avenues to explore. The following are some of them:

Zolve: Study Abroad

Government-backed options

  • Vidya Lakshmi Portal is a commendable initiative by the GoI (Government of India). It provides loans up to ₹15 lakh, with fixed interest rates and flexible repayment schedules.
  • Further, specific state-run schemes offer subsidies on loans tailored to students pursuing particular courses or prestigious universities globally.
  • Our partner PSU banks include Union Bank of India, Bank of Baroda, and Bank of Maharashtra. They offer study abroad loans with interest rates starting at 8.15% p.a., going up to 12.55% p.a.

Private banking institutions

  • Private banks highly compete with each other for your business; thus, they provide attractive loan amounts with competitive interest rates. To sweeten the deal, they throw in some goodies, such as adaptable repayment plans.
  • However, when opting for private banking institutions to secure a Study Abroad Loan, it is recommended that you carefully read the terms and conditions and scrutinize the fine print.
  • Our partner private banks include Yes Bank, IDFC First Bank, ICICI Bank, and Axis Bank. They offer education loans from 9.5% p.a. to 15.2% p.a., depending on the choice of bank.

Non-banking financial companies (NBFCs)

  • NBFCs are famous for fast-tracking loan approvals and providing a high degree of repayment flexibility.
  • These amenities often come at a cost, usually in the form of higher interest rates. Therefore, keeping an eye on the terms and conditions and comparing all NBFCs before choosing one for Study Abroad Loans is recommended.
  • Our partner NBFCs include Incred, HDFC Credila, Avanse, and Auxilo. For the latest interest rates, contact your preferred NBFC.

Secured and unsecured loans

It is best to quickly understand secured and unsecured loans by pitting them against each other. The following table lists all the nitty-gritty:

Secured Loans

Unsecured Loans

The borrower must submit collateral with the lender, such as property, FD, etc.

No collateral needs to be offered for unsecured loans.

Since collateral is present, approval chances are high.

Due to a lack of collateral, it is tougher for banks to approve such loans.

Interest rates are comparatively lower for the same reason.

Interest rates are comparatively higher.

A higher loan amount can be borrowed without obligation to repay during study.

The loan amount is not as high as secured loans. Some banks also expect repayment during studies.

The repayment period is longer.

Comparatively shorter repayment period.

Parental income is not required for approval.

Parental income is a must for loan-approval.

Eligibility for Study Abroad Loans

The following are the essential eligibility criteria for procuring Study Abroad Loans from any financial institution:

  • Indian citizenship is a must. Those from other countries who want to secure Study Abroad Loans must prove their citizenship in their respective countries.
  • The applicant must be 18 years old. For those younger than 18 years, their parents can take a study abroad loan for them.
  • A strong academic record is a must. It helps solidify the repayment capability after graduation.
  • A confirmed admission letter to an internationally recognized university is a must. This helps determine whether your reason for loan procurement is legitimate.
  • Since banks favor job-oriented courses, the applicant’s chosen course must be professional or technical in nature.
  • A co-applicant with a stable income is required to act as a guarantee in case you default on your education loan.
  • Loan underwriting is also considered at times. This ensures minimal to no interest payment loss for the financial institution.

Documents required from co-applicant

While we have repeatedly discussed that a co-applicant might be required in certain cases, the financial documents they need to bring along are yet to be discussed. The following table shows the documents required from different co-applicants:

Self-employed co-applicant

Salaried co-applicant

Address proof of business.

Salary slips for the last 3 months.

ITR for the last 3 years.

IT return copy for the last 2-3 years, acknowledged by the ITR Department.

TDS Certificate (Form 16 as well if required).

Copy of Form 16 for the last 2-3 years, acknowledged by the ITR Department.

Bank account statements for the last 6 months.

Salary account bank statements for the past 6 months.

Certificate of qualification (applicable for CAs, Doctors, and other professionals).

Key Considerations for Study Abroad Loans

The following key considerations must be kept in mind when planning to finance your studies abroad:

Deciding the loan amount

Consider this process similar to fixating on a budget for your next trip. You will have to tally everything, from tuition, rent, and groceries to round-trip flights and unforeseen situations. Remember that the loan amount will have to be paid back gradually, so portion your expenses accordingly.

Interest and other costs

Like all other loans, Study Abroad Loans have interest rates. Therefore, dig deep into the actual cost of the loan, i.e., the APR (Annual Percentage Rate). This includes all the hidden charges.

Repayment plans

You must determine the repayment period, the grace period (if offered by the bank), available prepayment options, and applicable penalties (if any). This can help you easily manage and reduce your debt after graduation.

Special loan perks

Some lenders roll out the red carpet, offering goodies like extended grace periods, competitive interest rates, and flexible repayments if you are studying something in high demand. It is worth looking into these little bonuses.

Tax benefits

Interest payments on education loans qualify for tax deductions in some countries. You can explore these benefits to reduce your ultimate financial burden by reducing the tax liability.

Steps to Obtain Study Abroad Loans

The following steps are necessary to secure a Study Abroad Loan:

  1. Dive into details and conduct thorough research to learn all about the eligibility, interest rates, and other little extras that can ultimately make a huge difference. You can use loan comparison websites for added convenience.
  2. Ensure all your paperwork is up to date and that you are not missing any critical documents required to procure the loan. These documents can include academic transcripts, an admission letter, co-applicant income proofs, and bank statements for a set period.
  3. Select the most ideal lender according to your needs and the one offering Study Abroad Loans on the best terms. It is even better if your lender does not have hidden charges.
  4. Please carefully read and understand the loan application form and fill out all the necessary details. Remember to submit the required documents along with the application form.
  5. After applying, monitor its status regularly. You can do this online or by contacting your lender if necessary.
  6. Once approved, the loan amount will be credited to the bank account specified in the application form. You should review the loan agreement thoroughly before signing it and receiving the money. You should sign the agreement only after you know all the terms and conditions.

Tips to Manage Study Abroad Loans

Solely, procuring an education loan is not enough. Managing it efficiently is critical, too. The following tips can come in handy to manage your Study Abroad Loan:

  • Create a detailed budget covering all probable expenses, including travel and living expenses and entertainment expenses such as outdoor meals and movies.
  • Many universities, governments, and private organizations provide scholarships and grants. Explore such opportunities to reduce your debt.
  • Consider gradually prepaying your loan to reduce your financial burden over time. You can do this by directly or indirectly prepaying your loan by increasing EMI payments over time. Both methods reduce your net payable quicker than usual, reducing lesser EMI payments and thus quickly tackling your debt.


As the discussion of study abroad loans comes to a close, it is evident that such financial support is not just about the funds but about making educational aspirations a reality, no matter where you choose to study.

Regarding finding the right partner to help you navigate this journey, Zolve is a standout solution with tailored offerings. Here, you can compare over 15 lenders to secure the best educational loan for your studies abroad in the USA without needing collateral and at competitive interest rates. Start your overseas education journey with Zolve today.


  1. Can I apply for a Study Abroad Loan if my chosen university is not on the lender’s approved list?
    Some lenders have a predefined list of universities or institutions for students to take education loans. However, some lenders have no such criteria. It is suggested that you check with your lender about this.

Can I get a loan for pre-admission expenses like admission fees and exams?

Most lenders provide Study Abroad Loans only to those students whose admission is finalized in a university overseas. However, a few lenders might provide loans to cover admission fees or exam costs. Consult your lender for more clarity on this.

What happens if I decide not to pursue the course for which I took the loan?

If you decide to withdraw from your ongoing core program, it is recommended that you inform your lender immediately. Depending on your situation, the terms of your loan may permit deferment or adjustments.

Can I apply without a co-signer or collateral?

Yes. However, while some lenders offer study abroad loans without collateral or a co-signer, they charge higher interest rates than those requiring collateral.

Are there loan forgiveness programs?

No, loan forgiveness programs are unheard of. However, students can attempt scholarships through specific exams to reduce their debt. Further, some countries offer work visas after graduation. This allows you to earn money abroad and pay your loans simultaneously.

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