Studying engineering abroad in countries like Germany, the USA, the UK etc is a dream for many Indian students. These countries offer global exposure, advanced learning, and promising career opportunities. However, financing this dream can be a difficult task but an education loan makes it easier to pursue. If you understand how to get education loan for engineering you can get admission to any top colleges abroad. Here’s a step-by-step guide to help you secure an education loan for engineering studies abroad.
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How to Get an Education Loan for Engineering?
Getting an education loan for engineering involves a step-by-step process that suits your financial needs and study aspirations. To get an education loan for engineering, you can start by researching loan providers, including public and private banks, NBFCs, and government schemes. You must meet the essential eligibility criteria, such as admission to a recognised foreign university and having a co-applicant with a steady income. Check more details below to know how to get an education loan for engineering below:
- You need to gather essential documents like your admission letter, academic records, and income proof.
- Submit your application online or at the bank or through the Vidya Lakshmi portal education loan, and once approved, the loan is disbursed directly to the university.
- Try to get collateral-backed loans for higher amounts as they come with low rates of interest and longer repayment periods and explore scholarships to reduce your overall financial burden.
Also Read: Planning to pursue MBBS abroad? Check here How Much Education Loan Can You Get for MBBS Abroad
Major Banks Providing Education Loans for Engineering
Several banks and NBFCs in India offer education loans to support students pursuing engineering abroad. Public sector banks like SBI and Bank of Baroda provide attractive schemes with government-backed subsidies, while private banks like ICICI and HDFC offer customized options with faster processing. Non-Banking Financial Companies (NBFCs) like Credila and Avanse are also popular for their flexible loan structures, covering additional costs such as travel and living expenses. Comparing interest rates, loan limits, and repayment terms is crucial to finding the best option. Check the details below:
| Provider | Type | Interest Rate | Loan Amount | Repayment Tenure | Special Features |
| SBI (State Bank of India) | Public Bank | 8.5% – 11.15% | Up to INR 1.5 Cr | Up to 15 years | Government subsidy for economically weaker sections. |
| Bank of Baroda | Public Bank | 8.55% – 10.05% | Up to INR 1.5 Cr | Up to 15 years | Lower interest rates with collateral. |
| HDFC Bank | Private Bank | 9% – 13% | No cap (based on collateral) | Up to 15 years | Quick processing; flexible repayment options. |
| ICICI Bank | Private Bank | 10% – 12.5% | Up to INR 1 Cr | Up to 15 years | Pre-admission sanction for select institutions. |
| Credila (HDFC Subsidiary) | NBFC | 11% – 13% | No cap | Up to 15 years | Covers living expenses; no margin money required. |
| Avanse | NBFC | 10% – 14% | Up to INR 50 lakh (can be higher) | Up to 15 years | 100% financing including travel and health insurance. |
Eligibility Criteria for Education Loans for Engineering
To secure an education loan for engineering, applicants must meet specific criteria set by banks and financial institutions. These criteria ensure that the applicant has the necessary academic background and financial support to succeed in their studies. Check the details below:
- Admission Requirement: Confirmed admission to a recognized university or college abroad in an engineering program.
- Academic Background: Strong academic records with minimum marks as specified by the lender.
- Age Limit: Typically, applicants should be between 18 and 35 years old.
- Co-Applicant: A parent, guardian, or close relative with a stable income must act as a co-applicant.
- Collateral: For loans exceeding INR 7.5 lakh, collateral such as property or fixed deposits may be required.
- Nationality: Applicant must be an Indian citizen with a valid passport.
Documents Needed for Education Loans
Securing an education loan for engineering studies requires a set of essential documents to establish your eligibility and process the loan smoothly. These documents provide proof of identity, academic credentials, and the purpose of the loan. Below is a list of commonly required documents:
- Identity Proof: Aadhaar Card, PAN Card, Passport, or Voter ID.
- Address Proof: Utility bills, Passport, or Ration Card.
- Academic Records: Marksheets of 10th, 12th, and entrance exam scores.
- Admission Proof: Letter of admission from the engineering college/university.
- Fee Structure: Detailed fee breakdown issued by the institution.
- Income Proof: Salary slips, IT returns, or Form 16 of co-applicant.
- Bank Statements: Recent six months’ statements of the co-applicant.
- Collateral Documents: If required, property papers or fixed deposit certificates
Also Read: Check here all about YES Bank Forex Card for international students and manage expenses efficiently
Steps to Apply for an Education Loan for Engineering
Applying for an education loan for engineering is a straightforward process that involves careful planning and documentation. If you are applying for an education loan from any of the banks associated with the Vidya Lakshmi scheme, then you need to apply for the loan on the Vidya Lakshmi portal. Check the steps to apply for an education loan for engineering below:
- Research Loan Providers: Compare banks and NBFCs based on interest rates, loan limits, and repayment terms.
- Check Eligibility: Ensure you meet the lender’s criteria, including admission to a recognized engineering program.
- Gather Documents: Prepare essential documents like your admission letter, academic records, co-applicant’s income proof, and collateral details (if needed).
- Submit the Application: Apply online or at the bank branch, filling out the required forms and attaching all documents.
- Loan Processing and Verification: The lender will assess your application, verify documents, and evaluate creditworthiness.
- Loan Approval and Disbursement: Once approved, the loan amount is disbursed directly to the university or as per the lender’s terms.
Securing an education loan for engineering studies abroad requires meticulous planning and research. With the right approach, you can unlock doors to prestigious institutions and bright career prospects. Check some FAQs based on how to get education loan for engineering below:
FAQs
Most banks offer loans up to INR 1.5 crore for studying abroad. However, the actual amount depends on the course, university, and collateral provided.
Collateral is usually required for loans above INR 7.5 lakh. It can include property, fixed deposits, or insurance policies. For smaller amounts, unsecured loans are available.
Repayment begins after the course completion and a grace period of 6–12 months, allowing time to secure a job.
Yes, most education loans cover living expenses, travel, insurance, and study materials, apart from tuition fees.
Essential documents include an admission letter, fee structure, academic records, co-applicant’s income proof, and collateral documents (if needed).
Some banks offer pre-admission loans for select universities. However, most require a confirmed admission letter.
Yes, under Section 80E of the Income Tax Act, you can claim tax benefits on the interest paid during repayment.
Yes, most lenders allow prepayment of education loans, but some may charge a small penalty. Check the terms before applying.
Interest rates typically range between 8.5% and 14%, varying by lender and whether the loan is secured or unsecured.
If repayment is delayed, the bank may extend the tenure or restructure the loan. However, defaults can impact your credit score and the co-applicant’s creditworthiness.
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.
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