With countless scholarship opportunities available, they often fall short of covering the entire cost of higher education, especially the study abroad ones. In such cases, education loans become a critical financial tool for students. While many students rely on public and private banks in India, foreign banks are increasingly emerging as attractive alternatives.
These international banks offer education loans with flexible repayment plans, competitive interest rates and substantial loan amounts, making them appealing to students seeking financial assistance. Leveraging their global banking networks and expertise, these banks often provide tailored loan solutions specifically designed for international education. Understanding their eligibility criteria, loan terms, collateral requirements, and repayment structures is crucial before making a decision.
Understanding Foreign Banks in India
Unlike Indian banks, these foreign lenders may not have a physical presence in India but still cater to Indian students through online platforms, partnerships with universities, or specialized education loan services.
- Online Platforms: Many global banks provide education loans through online applications, making them accessible to students regardless of their location. Examples include Prodigy Finance and MPower Financing, which cater specifically to international students.
- University Partnerships: Some banks collaborate directly with universities abroad to offer tailored loan products to admitted students, often with simplified documentation and favorable terms.
- Specialized Financial Institutions: Certain international financial institutions focus exclusively on education financing, providing unique benefits like collateral-free loans or grace periods post-graduation.
Foreign Banks that Provide Student Loans to Indian Students
While some foreign banks offer education loans for Indian students, many primarily provide personal loans that can be used for educational expenses. Below are some banks that offer such loan options for students.
1. HSBC India: Founded in 1865 in Hong Kong and Shanghai, HSBC is a global banking institution with a strong presence in India. HSBC India provides education loans to Indian students for both domestic and international studies, covering essential expenses such as tuition fees, accommodation, travel, and study materials.
- Loan Coverage: ₹15 Lakh (can get up to ₹30 Lakhs based on internal credit policy)
- Interest Rates: Ranging in between 9.25% – 15.5% per annum.
- Collateral Requirements: No collateral required.
- Repayment terms: Up to 5 years, start after 12 or 6 months post completion of the course.
- Processing fees: HSBC India charges a non-refundable processing fee of up to 2% of the sanctioned loan amount.
2. Deutsche Bank: Deutsche Bank facilitates financial solutions for students aspiring to pursue higher education. While the bank does not offer dedicated education loans in India, it has partnered with Flywire, a Boston-based cross-border payment services provider, to streamline international tuition fee payments. Students seeking financial assistance for studies can explore Deutsche Bank’s banking services, which may include personal loans that can be used for educational purposes.
- Loan Coverage: ₹50,000 to ₹15 lakh, depending on eligibility and repayment capacity.
- Interest Rates: Personal loan interest rates range from 11.00% to 13.00% per annum.
- Collateral Requirements: Personal loans are typically unsecured; however, approval is subject to the bank’s credit assessment.
- Repayment Terms: Flexible tenures ranging from 12 to 48 months.
- Processing Fees: Up to 2% of the loan amount disbursed.
3. Ascent Bank: Being awarded the Best Private Student Loan of 2021 by Forbes Advisor and NerdWallet, Ascent bank is a huge competitor in the education loan game. They believe that students are more than just a credit score, making their loan seamless, considering the applicant has an eligible co-signer. The features of Ascent Bank educational loan are given below:
- Loan coverage: Cover up to 100% of your college tuition and living expenses.
- Interest Rates: 3.39% – 14.16%
- Collateral Requirements: They don’t require collateral but they do require a co-signer who is a U.S. citizen with a good credit score.
- Repayment Terms: Up to 15 years, begins after the moratorium period.
- Processing fees: NIL
4. Sallie Mae: Known as one of the most recognized private student loan lenders in the U.S., Sallie Mae offers a wide range of loans for undergraduate, graduate, and career training programs. With competitive rates and multiple repayment options, it continues to be a go-to for many students. Sallie Mae also provides tools and resources to help students plan and manage their educational expenses.
- Loan coverage: Covers up to 100% of school-certified costs, including tuition, fees, books, housing, and other expenses.
- Interest Rates: Fixed: 5.49% – 14.83%, Variable: 6.12% – 16.70% (based on creditworthiness and repayment option selected)
- Collateral Requirements: Generally, there is no requirement of collateral but depending on the loan amount, the applicant may need a collateral or co-signer.
- Repayment Terms: Flexible repayment options up to 15 years.
- Processing fees: NIL
5. Citizens One: Private student loans for undergraduate, graduate, and professional courses are available from Citizens One, the nationwide lending arm of Citizens Bank, N.A. They offer reasonable rates and various repayment choices with an emphasis on streamlining the borrowing process to assist students in efficiently funding their education.
- Loan Coverage: Can cover up to 100% of the expenses.
- Interest Rates: Offers both fixed (3.99% – 15.61%) and variable interest rates (4.97% – 15.59%) . Specific rates are determined based on the applicant’s creditworthiness and other factors.
- Collateral Requirements: No collateral required; however, international students must have a creditworthy U.S. citizen or permanent resident co-signer to be eligible.
- Repayment Terms: Flexible repayment terms available, ranging up to 15 years.
- Processing Fees: NIL
NBFCs that Provide Education Loans to Indian Students
Indian students can obtain educational loans from a variety of NBFCs. The full form of an NBFC is a Non-Banking Financial Company, which is a business that engages in financial services such as lending, leasing, and investing without a full banking licence. For those who would rather not take out a bank loan, this is a fantastic substitute. Some trustworthy NBFCs for Indian students are listed below.
1. Prodigy Finance: Prodigy Finance is a UK based financial service that provides education loans to international students, including students from India. Preferably to students pursuing a post graduate degree at top universities worldwide. They aim to eliminate financial barriers in education so that students have access to quality education. The key features of Prodigy Finance education loans are given below.
- Loan Coverage: They cover tuition costs and living expenses, meaning they can cover up to 100% of the educational expenses.
- Interest Rates: The interest rates typically start from 8.35%.
- Collateral Requirements: As they assess applicants based on their future earning potential, eliminating the need for a co-signer or collateral.
- Repayment terms: Up to 15 years after the completion of the course plus additional six months of moratorium period.
- Processing fees: One upfront processing fee of $500 (USD).
2. MPOWER Financing: MPOWER Financing is a US-based company that acts as a partner in a student’s educational journey, offering student loans to a diverse audience, including students from India. They aim to provide solutions that fit the students’ needs so that everyone has access to higher education. Below are the key features of MPOWER Financing education loan.
- Loan Coverage: Up to $100,000 (₹83 lakh) per student.
- Interest Rates: Their fixed interest rates are 9.99% (11.16% APR). This rate includes a 0.25% discount for automatic recurring payments.
- Repayment terms: Up to 10 years after the completion of the course plus additional six months of moratorium period.
- Collateral Requirements: No requirement of collateral of any sort.
- Eligible Countries & Universities: MPOWER only funds students admitted to their partner universities in the U.S. or Canada. If your target university is not on their list, you won’t be eligible.
3. Leap Finance: With an emphasis on providing reasonable loans and simplified procedures, such as a rapid online application and no collateral requirements, Leap Finance is a neo-bank financial platform that offers education loans, especially for students continuing their study overseas.
- Loan Coverage: They cover 100% of tuition and living expenses.
- Interest Rates: The interest rates typically start from 8.45%.
- Collateral Requirements: As they believe in what the scholar will become tomorrow instead of accumulated wealth or assets, there is no requirement of collateral.
- Repayment terms: Borrowers can select a repayment period ranging from 7 to 15 years, that will begin after course duration plus an additional 6 months.
4. EDvestinU: The New Hampshire Higher Education Loan Corporation (NHHELCO) offers EDvestinU, a nonprofit student loan program, with the goal of lowering the cost and increasing access to higher education. EDvestinU is a popular alternative for students around the country because of its borrower-first philosophy, reasonable interest rates, flexible repayment plans, and an easy application procedure.
- Loan Coverage: Can cover up to 100% of the school-certified cost of academic expenses.
- Interest Rates: Fixed: Starting from 4.24%, Variable: Starting from 5.32%
- Collateral Requirements: No collateral required; a creditworthy co-signer may improve approval and rate terms.
- Repayment Terms: Choose from multiple repayment plans with terms up to 15 years; payments can start immediately, interest-only, or be deferred until after graduation.
- Processing Fees: NIL
Top Indian Banks that Provide Educational Loans
Indian students may sometimes face challenges in securing educational loans from foreign banks and fintech companies both. In such cases, they can consider the following Indian banks as alternative options for financing their education.
| Bank Name | Loan Scheme | Loan Amount | Interest Rate |
| State Bank of India (SBI) | SBI Scholar Loan Scheme | No upper limit | Starting from 8.05% p.a. for select institutions. Concessions available for girl students and those availing specific insurance policies. |
| Bank of Baroda | Baroda Scholar | Up to ₹80 lakh | Interest rates vary based on the institution and loan amount. Special concessions for female students and medical courses. |
| Canara Bank | Vidya Turant | Up to ₹50 lakh | Interest rates are competitive and linked to the bank’s MCLR. No collateral required for loans up to specified limits based on institution category. |
| Axis Bank | Education Loan | Up to ₹75 lakh | 13.70% to 15.20% p.a., depending on the loan amount. |
FAQs
1. Do foreign banks require collateral for education loans?
Some banks do require collateral (property, fixed deposits, or other assets), while others offer unsecured loans for top-tier universities and programs.
2. Can I repay the loan in INR instead of foreign currency?
It depends on the bank. Some banks allow repayment in INR if the loan was disbursed through an Indian branch, while others require repayment in the borrowed foreign currency.
3. Do I need a co-signer for a foreign bank education loan?
Most foreign banks require a co-signer (guarantor), especially for students with no credit history. The co-signer is typically a parent, guardian, or relative with a stable income and a good credit score. Some banks allow co-signers from different countries, while others require a guarantor from the bank’s operating country.
4. What is the processing time for a foreign education loan?
Processing times vary but generally range from 2 to 6 weeks, depending on the bank, loan type, and document verification process.
5. Can I take a loan in one country and study in another?
It depends on the bank’s policies. Some international banks allow loans for study in multiple countries, while others restrict lending to universities within the same country where the loan is issued.