Types of Abroad Education Loans for Abroad Studies

July 2, 2025 4 min read 60 Views

Studying in another country is exciting but also expensive. From tuition fees to living costs and travel, the total amount can be quite high. That’s where education loans for abroad studies come in. These loans help students cover their full education costs without burdening their families. In this blog, we’ll explain the types of education loans available for studying abroad and why they’re a popular choice for Indian students.

What Is an Education Loan for Abroad Studies?

An education loan for abroad studies is a special loan designed to support students who want to study outside India. It covers course fees, hostel or rent, books, insurance, and even travel costs. These student loans for international education are offered by banks, NBFCs, and other financial institutions. Depending on the loan type, you may or may not need to provide collateral. The aim is to make global education more affordable and accessible.

Why Students Prefer Loans for Studying Abroad?

Many Indian students choose education loans for international studies because they allow them to study in top universities without using family savings. These loans offer features like 100% financing, flexible EMIs, and a moratorium period, allowing students to repay after completing their course. With different types of education loans available, students can pick one based on their financial background and future plans.

Also Read: Top 9 Benefits of Abroad Education Loan You Must Know

Major Types of Education Loans

Understanding the types of education loans is the first step before applying. Based on security, lender type, and loan structure, here are the most common student loans for international studies:

1. Secured Education Loans

These loans require you to offer collateral, like a house, land, a fixed deposit, or an insurance policy. Because the lender has security, you usually get a lower interest rate, a longer repayment period, and a higher loan amount. Public sector banks often offer these loans with flexible terms. They're a good choice if you have an asset to pledge and want to borrow a large amount.

2. Unsecured Education Loans

These loans don’t need any collateral, making them ideal for students who don’t own property or financial assets. Key features include:

Co-applicant’s income is important
The interest rate is usually higher
Partial EMI may begin during the course
Loan approval depends on the course, country, and university

They are common among private banks and NBFCs offering student loans for international education.

3. Government-Sponsored Student Loans

These loans are designed to support meritorious and economically weaker students. Below are some of the features of this type of loan:

Offered by Public Sector Banks via schemes like Vidya Lakshmi Portal or CSIS Scheme.
Collateral may or may not be required.
Interest subsidy is available for eligible students.
The loan amount is usually upto ₹7.5 Lakh without collateral.

4. Private Lender Education Loans

These are loans provided by private banks and NBFCs without government involvement.

Fast processing and minimal paperwork.
Available with or without collateral.
Higher interest rates than public banks.
Covers up to 100% of total expenses.
Popular among students going to high-ranked universities abroad.

Private student loans for international studies offer flexible but slightly expensive options.

5. International Student Loans (From Foreign Lenders)

Some students also get loans directly from lenders based in the country where they are going to study.

Offered by global financial institutions or credit unions
No Indian collateral or guarantor required
The loan is disbursed in foreign currency
Interest rates may vary depending on credit score or co-signer profile
Often limited to select universities and courses

These are an alternate form of student loans for international education and can be explored if local options are limited.

Which Type of Abroad Education Loan Should You Choose?

The right education loan depends on your financial background, course, and the university you’re applying to. If you have property or assets, a secured education loan may offer better terms. If not, you can opt for an unsecured student loan for international studies, provided you meet the income and credit requirements. Also, check interest rates, repayment terms, and moratorium period before deciding. Comparing all types of education loans offered by banks, NBFCs, and financial institutions, with the help of Spoctree, can help you make a smart choice.

Conclusion

Studying abroad opens up exciting opportunities, but the costs can be high. There are multiple types of education loans to help you reach your goals. Whether you go for a government-backed, private, or international lender, understanding your loan options is key. Use Spoctree to compare multiple providers and choose the best offers that match your specific needs, all from the comfort of your home.

Frequently Asked Questions

What Are The Different Types Of Education Loans For Abroad Studies?

There are mainly five types of education loans for abroad studies: secured loans, unsecured loans, government-sponsored loans, private lender loans, and loans from foreign lenders. Each type has different eligibility, interest rates, and benefits. Choosing the right one depends on your financial background, course, and country of study.

What Is The Difference Between Secured And Unsecured Education Loans?

Secured education loans need collateral, like property or fixed deposits, offering lower interest and longer repayment terms. Unsecured education loans don’t require collateral but usually have higher interest rates and need a strong co-applicant profile. Both are popular student loans for international education, depending on the borrower’s financial situation.

Can I Get A Student Loan For International Studies Without Collateral?

Yes, you can get student loans for international education without collateral through private banks, NBFCs, and sometimes government schemes. These are called unsecured education loans. However, approval depends on the co-applicant’s income, the course, and the country. Interest rates may be higher compared to secured loans.

Are Private Lenders Better Than Government Banks For Education Loans?

Private lenders process loans faster and may cover up to 100% of study abroad expenses. But their interest rates are usually higher. Government banks offer secured education loans with lower interest rates and longer repayment periods. The better option depends on your need for speed, loan amount, and whether you have collateral.

Do Foreign Lenders Offer Education Loans To Indian Students?

Yes, some foreign financial institutions offer student loans for international education to Indian students. These loans usually don’t require Indian collateral and are disbursed in foreign currency. However, they are often available only for select universities or programs and may require a co-signer living abroad.