Here is everything you need to know about education loan for studying abroad, updated with the latest 2026 data.

Cost of Studying Abroad in 2026

Before applying for an education loan for studying abroad, calculate your total cost of attendance — not just tuition.

Always add a 5–10% buffer for currency fluctuations. Most loans cover tuition, accommodation, travel, books (capped at 20% of tuition at SBI), exam fees, and insurance.

Eligibility Criteria

General eligibility conditions are consistent across most lenders offering an education loan for studying abroad:

• An Indian national with confirmed admission to a recognized foreign university
• Completed 10+2 for undergraduate; a qualifying degree for postgraduate courses
• Age typically 18–35 years
• Financially stable co-applicant (parent, spouse, or guardian)
• The course must be a full-time program recognized by UGC or AICTE

A co-applicant CIBIL score of 750 or above can often negotiate a 0.25% to 0.50% reduction in the floating interest rate. A score below 650 risks rejection or significantly higher rates.

Interest Rates 2026: Lender-Type Comparison

Overall, education loan rates in India generally range from 6.75% to 16% per year, depending on various factors.

Almost all public sector banks offer a 0.50% interest rate waiver for women students. 

Top Lenders at a Glance

Secured vs. Unsecured Loans

Application Process

The process for securing an education loan for studying abroad follows these key steps:

1. Calculate your requirement — total cost minus scholarships and savings, plus a currency buffer.
2. Shortlist 2–3 lenders — compare rates, fees, and moratorium terms. Use pmvidyalaxmi.co.in for public banks.
3. Submit documents — admission letter, marksheets, co-applicant financials, and collateral documents if applicable.
4. Loan appraisal and sanction — the bank evaluates your academic profile and the co-applicant’s income and issues a sanction letter.
5. Disbursement — tuition is sent directly to the university; living expenses are credited to your account in installments.

Apply at least 2–3 months before your visa appointment, as a sanction letter is often required for the student visa.

Repayment and Moratorium Period

The moratorium covers the course duration plus 6 to 12 months after completion. Simple interest accrues during this period and is added to the principal once EMIs begin. Paying simple interest during the moratorium — if your parents can manage it — significantly reduces total repayment. 

Government Schemes and Subsidies

Students can apply online for education loans and interest subvention under the PM-Vidya Lakshmi and CSIS Schemes at pmvidyalaxmi.co.in. 

Tax Benefits: Section 80E

Section 80E makes no distinction between higher education pursued within India or in a foreign country — whether your child is admitted to Harvard, Oxford, or any other globally recognised institution, the interest paid on their education loan can be eligible for the deduction. 

Section 80E is separate from Section 80C, allowing you to claim both benefits simultaneously. 

Expert Tips

• A co-applicant CIBIL score above 750 can reduce your rate by 0.25–0.50%.
• Ask your bank about preferential rates for top-ranked universities — many lenders offer them.
• Women students should explicitly request the 0.5% concession available at all public sector banks.
• Pay simple interest during the moratorium to prevent interest capitalization.
• Choose the old tax regime when filing ITR to maximize your Section 80E deduction.

Frequently Asked Questions

What is the interest rate on an education loan for studying abroad in 2026 

Interest rates start below 9% in 2026, with public banks offering the most competitive rates overall. 

Can I get an education loan for studying abroad without collateral? 

Yes, public sector banks offer collateral-free loans up to ₹7.5 lakh under the Credit Guarantee Fund Scheme. 

Who can be a co-applicant for an overseas education loan? 

A parent, spouse, or legal guardian with stable income and a good CIBIL score can be your co-applicant. 

What expenses does an education loan for studying abroad cover?

Loans cover tuition, accommodation, travel, books, exam fees, insurance, and other education-related costs abroad. 

How long is the moratorium period on an overseas education loan? 

The moratorium period is your course duration plus six months or one year given to find a job. 

What tax benefit can I claim on my education loan interest? 

Section 80E allows a deduction on the full interest paid, with no upper limit, for up to eight years. 

Which government scheme offers the best subsidy on overseas education loans? 

PM-Vidyalaxmi provides a 3% interest subvention on loans up to ₹10 lakh for families earning less than ₹8 lakh. 

Do women students get any concessions on education loans for studying abroad? 

Almost all public sector banks offer a 0.50% interest rate waiver specifically for women student borrowers.