Securing an education loan is one of the most common ways for international students to finance their dreams of studying abroad. However, if you have academic backlogs, obtaining a loan or receiving pending disbursements might seem challenging. Backlogs are not very rare but you shouldn’t have them if you are expecting finances through a student loan. While a clean academic record strengthens your loan application, backlogs don’t necessarily close the doors to funding opportunities. Let’s check and understand all about education loans with backlogs.
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Education Loan with Backlogs: Major Challenges
There are some major challenges associated with education loans with backlogs. In the usual eligibility criteria for education loans, banks mention that the students applying for the loan must have outstanding academic records and higher ranks in the entrance examination. If you are applying for an education loan with backlogs, banks may raise concerns about the same. Academic backlogs might raise concerns among lenders about your academic commitment and ability to complete the program. Check some major challenges for education loans with backlogs below:
- Number of Backlogs: A few backlogs are often considered manageable if they are cleared before applying for the loan.
- Reason for Backlogs: If the student has genuine reasons like health issues, family emergency, death of any family member or any other genuine reasons is more acceptable.
- Academic Improvement: Clearing backlogs and showing improved performance in subsequent semesters can positively impact your application.
Also Read: Check here all the major details on some of the best banks in USA for international students
Two Major Scenarios of Education Loan with Backlogs
There are mainly two kinds of education loan applications for overseas studies. One is applied before leaving the country i.e. at the time of admission and the other after starting the studies. In the first case which is at the time of admission, the bank will disburse the loan amount in multiple instalments for a semester and keep monitoring your performance. Check the details of both the scenarios below:
| Scenario 1: Before Starting the Studies | Scenario 2: In the Middle of Studies |
| If you have a backlog in any paper in any of the semesters, the bank may put a hold on the further disbursement. After you clear the backlog with a higher score and your overall program is unaffected, then the disbursement may take place. | If you want to apply for an education loan with a backlog in the middle of your studies, it may be a bit difficult to get it approved. The bank will check your entire academic history before approving the loan and the final disbursement may be done after you clear the backlog. |
Banks Offering Education Loans with Backlogs
Some of the major banks and financial institutions offering education loans with backlogs include the State Bank of India (SBI), HDFC Credila, Punjab National Bank (PNB), Bank of Baroda, Axis Bank etc. These public and private sector banks offer education loans to study-abroad students at competitive interest rates and flexible repayment terms. Check the features of these banks below:
| Major Banks and NBFCs | Features of Education Loan |
| State Bank of India (SBI) | -Loans provided under the SBI Global Ed-Vantage Scheme -Up to INR 1.5 crore loan amount to study abroad -Interest rate starts from 11.15% (may vary depending on eligibility, type of institutions etc) |
| HDFC Credila | -No upper limit for the loan amount as it is based on the requirement -Customised interest rates based on the profile –HDFC Credila Education Loan assesses your academic history but offers flexibility if backlogs are cleared and the student demonstrates potential through test scores like the GRE or GMAT. |
| Punjab National Bank (PNB) | -Loans provided under PNB Udaan Education Loan Scheme -Up to INR 1.5 crore to study abroad -Interest Rate ranges from 9% to 13% |
| Axis Bank | -Loan Amounts up to 2 crore -The interest rate varies between 10% to 14% –Axis Bank Education Loan emphasizes the credibility of the institution and the co-applicant’s financial standing. A well-defined repayment plan increases approval chances. |
| Bank of Baroda (BoB) | -Loan provided under the Baroda Scholar Scheme to Study Abroad -Up to INR 1.5 crore loan provided -Interest rate starts at 9.25% or less (based upon eligibility and type of college) |
Also Read: Planning to get an education loan? Check here all about student loan interest rate and find out the best education loan product for you
Tips for Students with Backlogs Applying for Loans
Education loans with backlogs can be taken but the approval is more complicated than a usual education loan. Your academic record matters a lot in the approval of your education loan. Check some important and useful tips for education loans with backlogs below:
- Banks prefer candidates who have resolved academic issues. Clearing your backlogs and obtaining a course completion certificate can strengthen your application.
- Confirmed admission to a reputed foreign university offsets concerns about backlogs. The reputation of the institution assures lenders of your potential.
- Strong scores in GRE, GMAT, or TOEFL/IELTS can help compensate for backlogs. Showcase extracurricular achievements to reflect your overall capability.
- An SOP explaining the reasons for your backlogs and how you’ve overcome challenges can help build trust with the bank.
- A financially stable co-applicant, usually a parent or guardian, increases the likelihood of approval.
Having academic backlogs doesn’t mean you can’t secure an education loan for studying abroad. Banks in India evaluate your overall profile, including admission to a reputed institution, test scores, and financial backing and approve the loan. If you have backlogs and are considering applying for an education loan, focus on clearing them and improving your academic profile. Check some FAQs based on education loans with backlogs below:
FAQs
Yes, students with backlogs can get an education loan, but approval depends on the total number of backlogs, their resolution, and admission to a recognised foreign institution.
Banks like HDFC Credila, SBI, and PNB are flexible if backlogs are cleared, and you’re admitted to a reputed institution.
Clearing backlogs demonstrates your academic improvement and commitment, making lenders more likely to consider your application favourably.
Interest rates depend on the bank, loan amount, collateral, and your admission to a reputed university rather than your academic history alone.
Yes, a financially stable co-applicant significantly improves your chances of loan approval, especially if you have backlogs.
Provide a backlog certificate, course completion proof, and a well-written SOP explaining reasons for backlogs and steps taken to overcome them.
Private lenders like HDFC Credila and NBFCs often have more flexible criteria and are likely to approve loans for students with a few backlogs.
Yes, high test scores can demonstrate your academic potential and help compensate for past backlogs during loan evaluation.
Collateral might be required if backlogs raise concerns about repayment ability. However, this depends on the bank and loan amount.
Clear your backlogs, secure admission to a reputed university, highlight achievements and present a strong SOP with supporting financial documents.
To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
