Education Loan for Bachelor's Degree Abroad: A Detailed Guide
Every year, thousands of Indian students head abroad for their bachelor’s degrees. But only about 10-15% of these students can afford the entire cost without some form of financial support.
Bachelor’s degrees take 3-4 years to complete, and with costs running into INR 50 lakhs - 1 Cr or even more, it’s no wonder many students and their families feel uncertain about navigating the financial side.
While education loans for master’s programs are widely promoted and structured, those for undergraduate studies sometimes feel like an uncharted territory.
And if you’re wondering whether loans are even available for bachelor’s students, the answer is yes.
In fact, with the right information and a little planning, getting an education loan for your bachelor’s abroad is easier than most people think.
Key Highlights:
- A bachelor’s degree abroad can cost INR 50 lakhs - 1 Cr, including tuition, living expenses, travel, and more.
- Two main types of education loans available for bachelor’s studies are secured loans (require collateral, lower interest rates) and unsecured loans (no collateral, higher interest rates).
- Secured loans have interest rates between 8.5-10% and longer repayment terms; unsecured loans have rates between 10.5-14% and shorter terms.
- Government banks offer secured loans up to INR 1.5 crore, while private lenders provide unsecured loans up to INR 30 lakh.
- Countries like the US, UK, Canada, Australia, and Germany are popular and have varying education loans and cost structures.
This blog will guide you through everything you need to know about education loans for bachelor’s degrees. Let’s get started!
Why Do You Need an Overseas Education Loan for a Bachelor’s Degree Abroad?
A study abroad loan helps you manage the high cost of a bachelor's degree overseas without putting pressure on you or your family’s savings. It gives you the freedom to study, live, and explore abroad with fewer financial worries.
Here’s how an education loan benefits you for your abroad studies:
- Covers Comprehensive Costs: Tuition fees, living expenses, travel, books, health insurance, and other essentials are covered, reducing financial stress.
- Enables Access to Top Universities: Loans provide the financial means to attend globally recognized institutions that might otherwise be unaffordable.
- Flexible Repayment Options: Most education loans offer repayment periods that begin after course completion, giving you time to secure a job.
- Builds Financial Independence: Taking a loan teaches you financial responsibility and builds your credit profile, preparing you for future financial needs.
- Supports Career Goals: With financial barriers removed, you can focus on excelling academically and professionally in a competitive environment.
So, instead of worrying about how to pay your tuition fee next semester, you can spend your time preparing for an exciting class project or exploring the city you’re living in. An overseas education loan makes this possible, turning a huge financial hurdle into a manageable investment in your future.
Now that we understand why education loans are essential, let’s talk about the main types of loans you’ll come across.
Secured Education Loans for Bachelor’s Degree Abroad
A secured study abroad loan is backed by something valuable, called collateral, that you or your family owns. This could be a house, land, fixed deposit, or life insurance policy. The bank uses this as security, which makes them more willing to offer better terms.
The bank feels safer lending you money because they have the collateral as security.
Who is Eligible for a Secured Loan?
For secured loans, the focus is largely on the collateral you provide. Here’s what counts as acceptable collateral:
- Property: Residential or commercial properties.
- Fixed Deposits (FDs): FDs are held with the bank you’re applying to.
- Life Insurance Policies: With a surrender value that matches the loan amount.
Lenders will evaluate the market value of your collateral before approving the loan. The higher the value of your collateral, the larger the loan amount you can access.
Reasons to apply for a secured education loan
- Lower interest rates: Since the lender holds collateral, rates are often lower, usually starting around 8.5% (varies by lender).
- Higher loan amounts: Some banks offer up to INR 1.5 crore or more, depending on collateral value.
- Longer repayment terms: Usually up to 15 years, making monthly EMIs more manageable.
- Broader eligibility: Even students with average academics can apply if the collateral value is strong.
Unsecured Education Loans for Bachelor’s Degree Abroad
Now, what if you don’t have any collateral to offer? That’s where unsecured loans come in. Unsecured loans for study abroad don’t require you to pledge anything valuable. Instead, the bank looks at your academic achievements, the university you’ve been admitted to, and your co-applicant’s financial profile to decide if they can trust you to repay.
Here’s what to know about unsecured loans: Unsecured education loans are ideal if you don’t have assets to pledge but have strong academics and admission to a reputable university.
Who is eligible for getting an Unsecured Loan?
Unsecured loans are based on trust. The lender trusts that you’ll repay the money based on your academic performance, your future potential, and your co-applicant’s financial profile.
Key factors include:
- Strong Academic Records: Good grades in school and competitive scores in exams like the SAT or IELTS show that you’re serious about your studies.
- University Ranking: Admission to a highly ranked university or course with good job prospects makes your application stronger.
Reasons to apply for an unsecured education loan
- No collateral is needed: Great option for students without assets.
- Faster approval: Unsecured study abroad loans can get processed within a week.
- Loan amount flexibility: While generally capped around INR 30-50 lakh, some lenders may offer more for top-ranked universities.
- Convenience: Less paperwork and no collateral evaluation required.
Tip from Yocket: Lenders usually have their own list of approved universities for unsecured loans. If your university isn’t on that list, getting the loan might be tough. Always check this with the lender before applying.
Understanding these criteria is the first step to securing your loan. Prepare early. Make sure your documents are ready and your co-applicant’s financial details are in order. It’ll make the process smoother and faster.
Eligibility Criteria for an Overseas Education Loan for Bachelor’s Degree
Banks and lenders have specific rules to decide whether or not to approve your application. These criteria vary depending on the type of loan, but understanding them can help you prepare better and avoid surprises.
General Eligibility
Whether you’re applying for a secured or unsecured loan, there are some basics you must meet:
- Admission to a Recognized University: You need to have a confirmed admission offer from an approved university or institution abroad. Lenders feel confident lending to students going to well-known universities.
- A Co-Applicant is Essential: Most loans require a co-applicant, usually a parent or guardian, with a steady income. The co-applicant’s credit score and financial history play a big role in the approval process, especially for unsecured loans.
How to Improve Eligibility for Secured Education Loans
If you're planning to apply for a secured education loan, improving your eligibility can increase your chances of approval and help you negotiate better terms.
Here are a few practical ways to strengthen your loan application:
- Ensure clear property documentation: Make sure your collateral (like property or FD) has all legal papers in order. Discrepancies or missing documents can delay approval or even lead to rejection.
- Co-applicant’s profile matters: A stable income, strong credit score, and low existing liabilities in your co-applicant’s profile can significantly strengthen your case.
- Maintain a good academic record: While collateral is the key factor, a consistent academic background improves your overall loan profile.
- Avoid multiple liabilities: Lenders prefer co-applicants who don’t have too many ongoing EMIs or loans.
- Get a pre-valuation of the collateral: Knowing the approximate market value of the property or asset before applying gives you clarity on the loan amount you can request.
Documents Required for an Overseas Education Loan
Proper documentation is critical to getting your loan approved faster, whether you’re applying for a secured or unsecured loan.
Secured Education Loan
- Admission letter: Confirms your acceptance into a recognised university or course abroad. It's the first proof lenders need to begin your loan process.
- Academic records: Includes mark sheets from Class 10, 12, and entrance exams like SAT or IELTS. Shows your academic potential and seriousness.
- KYC documents: Aadhar card, PAN card, and passport of both student and co-applicant. These help verify your identity and nationality.
- Income proof of co-applicant: Salary slips, income tax returns (ITR), Form 16, or business income documents. Lenders need this to check your co-applicant’s repayment ability.
- Collateral documents: Includes property papers (ownership proof, title deed) or FD certificates. These are required to secure the loan with an asset.
- Property valuation report: Some banks ask for an official property valuation from an approved agency. It helps determine how much loan you can get.
- Bank statements: Past 6 months’ bank statements of both applicant and co-applicant. These show income consistency and financial habits.
- Passport-size photographs: For ID verification and bank records.
- Loan application form: Filled-in form provided by the lender, with personal, academic, and financial details.
Unsecured Education Loan
- Admission letter: Confirms that you’ve secured a seat in an eligible university. It's a basic eligibility requirement.
- Academic transcripts and entrance scores: Your Class 10, 12, and test scores like SAT or IELTS help banks evaluate your academic potential.
- KYC documents: PAN card, Aadhaar, and passport for both student and co-applicant to confirm identity.
- Co-applicant’s income proof: Salary slips, Form 16, and ITRs show the financial strength and stability of your co-applicant.
- Relationship proof: Documents like a birth certificate, ration card, or passport to establish the relation between the student and co-applicant.
- Bank statements: The Last 6 months’ statements of your co-applicant’s account help show income and spending patterns.
- Passport-size photographs: Used for processing your application and ID verification.
- Loan application form: A basic requirement to kick off the application, where you fill in all the key details.
Tip from Yocket: Always keep scanned copies of all your documents handy. Uploading clear, legible documents online can speed up your loan processing by a few days.
Let’s move on to how much loan amount you can actually get and what it covers!
How Much Student Loan Is Available for a Bachelor's Abroad?
Here comes the next big question: How much money can you borrow? The answer depends on the type of loan and the lender.
Let’s see here:
Education loans from Government Banks
Government banks in India are known for offering secured loans with collateral. These loans often provide:
- Loan Amount: Up to INR 1.5 crore or more, depending on the value of your collateral.
- Interest Rates: Typically between 8.5-10%, which are more affordable compared to private lenders.
Note: If you’re opting for an unsecured loan from a government bank, the amount is much smaller, usually capped at INR 7.5 lakh.
Loans from Private Lenders
Private banks and NBFCs (Non-Banking Financial Companies) step in when students need unsecured loans or when the loan requirement exceeds what government banks can provide.
Here’s what to expect:
- Unsecured Loan Amount: Up to INR 30 lakh (sometimes higher for top-ranked universities).
- Interest Rates: Higher than government banks, usually between 10.5-14%.
For secured loans, private lenders also offer competitive amounts, but their interest rates are typically higher than government banks.
It’s always a good idea to assess your total expenses, compare lenders, and choose the option that fits your needs best.
How to Choose the Right Tenure and Repayment Option for a Bachelor's Abroad Loan?
Understanding how much interest will be charged and how long the repayment term lasts is key to selecting the right education loan. Both factors directly affect how much needs to be repaid and over what time frame.
Interest Rates for Bachelor’s Degree Loans
The interest rate on study abroad loans or in any any loans is the extra amount you pay on top of the money you borrow.
For lenders, it’s how they earn.
For you, it’s an added cost you need to plan for.
Here’s how it works for different loan types:
- For secured loans: Since the bank has collateral, the interest rate is lower. It usually ranges from 8.5 percent to 10 percent.
- For unsecured loans: With no security involved, rates are higher. They typically range between 10.5 percent and 14 percent.
For example, if you borrow INR 20 lakh at 9%, you’ll end up paying INR 1.8 lakh annually in interest alone. But if the rate is 12%, that cost jumps to INR 2.4 lakh. Even a small difference in interest rates can make a big impact over time.
Repayment Terms for Bachelor’s Degree Loans
The repayment term is the time you’re given to repay the loan in monthly installments, or EMIs (Equated Monthly Installments). Most lenders offer flexible options, but the repayment period varies depending on the type of loan:
- Secured Loans: These loans often come with longer tenures, up to 15 years, making it easier to manage smaller EMIs.
- Unsecured Loans: Repayment periods are shorter, usually up to 10 years, leading to higher monthly payments but quicker loan closure.
Step-by-Step Process to Apply for an Overseas Education Loan
Applying for an education loan might seem complicated, but it’s actually quite straightforward when you break it into steps. The key is to start early, stay organized, and know what to expect at each stage.
Let’s walk through the process step by step:
- Research and Compare Lenders - Compare government banks, private banks, and NBFCs based on interest rates, loan amounts, repayment terms, and processing time. Choose the lender that best suits your needs.
- Gather the Required Documents - Prepare documents like your admission letter, academic records, co-applicant income proof, and collateral details (for secured loans). Having everything ready saves time.
- Submit Your Application - Apply online or visit the lender’s branch. Submit the required documents and answer any queries during the verification process.
- Wait for Verification - The lender will check your details and, for secured loans, evaluate your collateral’s value. Stay responsive to avoid delays.
- Loan Approval and Disbursement - Once approved, the funds are disbursed, tuition fees are sent directly to the university, while living expenses may be credited to your account.
Top Countries for Bachelor’s Degrees Abroad
Choosing the right country for your bachelor’s degree isn’t also about affordability, future opportunities, and how well your education loan fits into the equation. Each popular study destination has its own cost structure, repayment expectations, and financial aid landscape.
Here’s a closer look at some of the top destinations and what you should know about managing loans for each:
Country |
Average Annual Tuition Fees |
Living Expenses (Annually) |
Loan Insights |
---|---|---|---|
United States |
INR 20-40 lakh (private), INR 10-20 lakh (public) |
INR 10-15 lakh |
Secured loans are preferred for high tuition costs; specialized loans available for top universities. |
United Kingdom |
INR 15-30 lakh |
INR 8-12 lakh (higher in London) |
Favorable loans for Russell Group universities; shorter repayment terms save on interest. |
Canada |
INR 8-15 lakh |
INR 6-10 lakh |
Competitive rates for programs with co-op options; strong post-graduation job prospects reduce risks. |
Australia |
INR 15-25 lakh |
INR 8-12 lakh |
Flexible repayment terms for STEM or healthcare courses; ideal for secured loans. |
Germany |
Minimal to no tuition fees (public) |
INR 6-9 lakh |
Loans primarily needed for living expenses; exclusive packages available for technical courses. |
Tips for Choosing the Right Education Loan
Choosing an education loan is a big decision—it’s about setting yourself up for financial stability during and after your studies. The right loan can make your study abroad journey stress-free, while the wrong choice can lead to unnecessary burdens.
To help you make a confident decision, here are some practical tips to consider:
1. Compare Interest Rates
Always compare the interest rates offered by different lenders. Even a small difference can save you thousands over the loan term. For example, a 9%interest rate of INR 20 lakh costs significantly less than a 12% rate in the long run.
2. Understand the Repayment Terms
Look at how much time you’ll have to repay the loan and what the monthly EMI will be. Secured loans typically offer longer repayment periods (up to 15 years), which means lower EMIs. Unsecured loans may have shorter terms, leading to higher EMIs. Choose a plan that fits your expected earnings after graduation.
3. Check for Moratorium Period Flexibility
A moratorium period gives you breathing room before you start repayments. Ensure the lender offers this option and check if they require interest payments during the moratorium or allow full deferment.
4. Evaluate Your Co-Applicant’s Profile
For unsecured loans, your co-applicant’s financial stability and credit score play a key role. A strong co-applicant profile can improve your chances of approval and help you secure better terms.
5. Match the Loan to Your University and Course
Some lenders offer better terms for top-ranked universities and programs with strong career prospects. Check if your chosen institution is on the lender’s preferred list, as this can simplify the approval process.
6. Consider the Total Loan Coverage
Make sure the loan covers not just tuition fees but also living expenses, travel, and other costs. A comprehensive loan ensures you’re financially prepared for your entire course duration.
7. Look for Hidden Fees
Carefully read the terms to identify processing fees, prepayment penalties, or late payment charges. These can add up and impact the overall cost of the loan.
Final Thoughts
Pursuing a bachelor’s degree abroad is a huge step toward building a global career and experiencing world-class education. However, the financial investment required can feel overwhelming without the right support. Education loans act as a bridge, turning what seems like a distant dream into a tangible reality.
At Yocket Finance, we understand the complexities of the loan process and how crucial it is to get it right. Our team is here to help you navigate through comparisons, documentation, and approvals, ensuring that your journey to studying abroad is as seamless as possible.
Remember, an education loan is an investment in yourself and your future. Take the time to evaluate your options, seek expert guidance, and take that next step confidently.
Your dream university awaits, and we’re here to help you get there.

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Frequently Asked Questions on Education Loan for Bachelors Degree Abroad
Can I get an education loan without a co-applicant?
Yes, some lenders offer education loans without a co-applicant, but these are typically unsecured loans with higher interest rates. They are usually approved based on your academic profile and admission to a top-ranked university. However, having a co-applicant with a stable income and good credit score strengthens your application and often secures better loan terms.
Are education loans available for all countries?
Education loans are widely available for popular study destinations like the US, UK, Canada, Australia, and Germany. However, for lesser-known countries, some lenders may hesitate. Always check if your chosen country and university are on the lender's approved list. If not, you may need to explore private lenders or specialized loan options.
What happens if I can’t repay the loan on time?
If you miss repayments, the bank will first issue reminders and may add late payment charges. For secured loans, the lender can claim the pledged collateral to recover the outstanding amount. For unsecured loans, non-repayment can affect your credit score and your co-applicant’s financial standing. If you're facing difficulties, contact your lender immediately—they may offer solutions like restructuring your loan or extending the repayment term.
Can I use an education loan to cover non-tuition expenses?
Yes, most education loans cover a range of expenses beyond tuition fees. This includes living expenses, travel, health insurance, books, and even laptops. Some lenders may also cover exam fees and visa-related costs. Check the loan details carefully to ensure it aligns with your needs.
Do I need to start repaying the loan while I’m still studying?
Most education loans offer a moratorium period, meaning you don’t have to start full repayment until after your course ends and you’ve found a job. However, some lenders require you to pay simple interest or partial EMIs during this time. Understanding your repayment terms before signing is crucial to avoid surprises.
Are scholarships and loans mutually exclusive?
No, you can use scholarships and loans together! If you receive a scholarship, it can reduce your loan amount and overall financial burden. Lenders usually encourage students to apply for scholarships as it showcases financial planning and reduces the loan’s risk for the lender.