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Best Education Loans for Abroad Studies by Indian Government

Updated on 01 February, 2024

Opting overseas for education can be the best decision in one’s life. However, this decision comes with a lot of challenges. While other challenges can be worked around, the challenge of funding one’s education remains, given the fact that not everyone is privileged. In such a case, an education loan comes to the rescue. The easy access to subsidies for economically disadvantaged students and education loans for studies abroad by the Indian government has made studying abroad a viable option for students. Government offers education loans to students under several schemes to complete their higher education in top study abroad destinations like the USA, Germany, and the UK, among others. 

This article will provide valuable insights on some of the best Indian government loan schemes that can be availed by Indian students who wish to study abroad. Read on as the article unveils the information regarding eligibility, the application process, and the documents required to apply for education loans to study abroad.

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Popular Loans for Abroad Studies by the Indian Government

The Indian government provides a lot of loan schemes that are popular for their low-interest rates and easy application procedures. Let us quickly go through the popular loan options students aspiring to study abroad have when it comes to funding their education.

Gujarat Government Education Loan for Studying Abroad

This is a recognized scheme by the state government of Gujarat to promote higher education. The plan offers education loans with 100% subsidy to economically backward students in Gujarat with merit. Students can apply for a loan extension of up to ₹15 lakhs with a 4% rate of interest from GUEEDC or Gujarat Unreserved Educational and Economical Development Corporation. Students from Gujarat can avail of this loan for various study abroad programs, like professional courses, language programs, graduation, and post-graduation. The moratorium period of the education loan is the course duration and another year in addition.

Eligibility Criteria for Gujarat Education Loan for Studying Abroad

  • The student must be a resident of Gujarat
  • The annual family income should be less than ₹6 Lakhs
  • The applicant needs to have an admission confirmation letter from any  foreign university or college
  •  The subsidy will be offered only when the loan amount is more than ₹10 Lakhs

How to apply for the Gujarat Education Loan for Studying Abroad? 

  • Apply online by clicking on the link: https://kcg.gujarat.gov.in/education_loan/
  • Download the registration form 
  • Fill the form and print the acknowledgment receipt and send it to KCG directly or through courier along with all the important self-attested documents provided in the checklist

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Vidya Lakshmi Education Loan

Vidya Lakshmi Education loan is available for graduation, post-graduation, and doctoral programs. For study abroad programs, the government approves a loan of a maximum amount of ₹ 30 lakhs to the students. The moratorium period for Vidya Lakshmi Education Loan is either six months post the student lands a job or one year after the completion of the course.

Eligibility for Vidya Lakshmi Education Loan:

● Vidya Lakshmi Education loan is available only to Indian nationals. 

●  Students need to have secured admission to a foreign university or college.

● Applicants must have completed their class 12th from a recognized board of study. It should be a full-time classroom program. 


How to Apply for a Vidya Lakshmi Education Loan? 

● Click on the link mentioned below to visit the Vidya Lakshmi portal: https://www.vidyalakshmi.co.in/Students/signup

● Register with all the details and information, and all the information related to the application will be sent to the registered email address of the candidate

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Education Loan Scheme of the NBCFDC

The National Backward Classes Finance and Development Corporation (NBCFDC) provides education loans to students from backward classes living below the poverty line for pursuing general/ professional/technical courses or training at graduate and/or higher levels. A maximum amount of ₹20 lakhs is granted to students willing to study abroad under this scheme. The moratorium period for the course is five years.

Eligibility for NBCFDC Education Loan: 

● Backward class students need to provide their caste certificate. 

● The annual family income should be less than ₹ 3.30 lakhs. 

●  Students must showcase their acceptance letter from a university or college abroad

● Must have completed high school with 70% and above from a recognized board of study. 

How to Apply for an NBCFDC Education Loan? 

● Click on the link: https://nbcfdc.gov.in/index.php/loanform/en

● Fill out the online form and submit it along with all the documents as per the requirements

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Padho Pardesh Scheme

This scheme covers Indian students enrolled in a postgraduate degree overseas. It is a Government Education Loan for Abroad and is available through Canara Bank. Padho Pardesh loan is granted to students coming from minority sections and has a good academic record. In this scheme, a 100% subsidy can be availed. The moratorium period of the scheme is during the period of the course, plus either one year post the completion of the course or six months after getting a job, whichever comes first.  

Eligibility Criteria for Padho Pardesh: 

  • Students can avail Padho Pardesh scheme only when they have scored a minimum of 60% in class 12
  • Must have a confirmed admission granted by a college or university abroad
  • They can avail of this scheme in the first year and not in the middle of the course
  • The average gross income of the total members of the family must not exceed  ₹6 Lakhs
  • It is applicable for students who are willing to take up master’s, MPhil, and Ph.D. courses 
  • Students applying under this scheme need to have all the relevant documents, without which the application will not be processed

How to Apply for Padho Pardesh? 

● Apply online by clicking on this link- https://canarabankcsis.in/Padho_STD_Portal/login.aspx 

● ● After getting directed to the student portal, candidates need to register and download the application form, fill it up and submit it along with all the required documents that have to be scanned and uploaded as per the size that is mentioned on the website

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Dr Ambedkar Central Sector Scheme

This scheme is a central sector scheme that comes under the Ministry of Social Justice & Empowerment, Government of India. The objective of the scheme is to encourage overseas education among minority communities in India. This scheme offers education loans with a 100% subsidy so that meritorious students from financially weaker sections can get better overseas education. The scheme is applicable only for higher levels of education like Masters, MPhil, or Ph.D. programs. It can be availed only once by a student. For example, if this scheme is used for the master’s program, students cannot use it again for the doctorate program. The moratorium period for Dr. Ambedkar Central Sector Scheme remains the same as the Padho Pardesh scheme. 

Eligibility for Dr Ambedkar Central Sector Scheme: 

  • The students applying under this scheme need to be Indian citizens and possess a caste certificate for OBC and ST categories
  • This scheme is applicable for higher levels of education like PG, MPhil, and Ph.D. graduation, and high school level students are not eligible under this scheme
  • Students can apply for this scheme only when the average gross annual income of the family is below ₹ 3 Lakhs
  • Applicants cannot submit their candidature for the scheme during the middle of the course; instead, they should apply before the commencement of the course


How to Apply for the Dr Ambedkar Central Sector Scheme? 

● Visit the official website and click on this link to apply online- https://web.umang.gov.in/landing/department/dr-ambedkar-central-sector-scheme-of-interest-subsidy.html

● Create an account and log in to the UMANG app. 

● Fill up the required details and submit the form along with all the documents and scan and upload them as per the mentioned size.

● Confirmation for the application will be sent to the email address. 

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Documents Required to Apply for an Education Loan

Documentation is an important step for the approval of the education loan. In fact, no financial institution under the Government of India will process your education loan without proper verification of identity and economic conditions.

Following are the essential documents required to get an education loan approved: 

  • Duly filled out online or offline application form. 
  • Printout of the filled form. 
  • Two passport-size photographs in formal wear. 
  • Income proof of the family to prove the applicant’s financial condition (form 16 of income tax return file, latest property tax documents, property papers, income proof of co-applicants, last six months’ bank statement). 
  • Scorecards of entrance examinations like GRE, GMAT, TOEFL, IELTS, ACT, or SAT
  • Scholarship documents, if any. 
  • Aadhaar card. 
  • Birth certificate. 
  • Driving License. 
  • Pan Card. 
  • Passport. 
  • Residential proofs. 
  • Bank documents. 
  • Copy of visa. 
  • University or college admission confirmation letter. 
  • University documents. 
  • Previous academic transcripts. 
  • Copy of fee payment receipt.
  • A self-declaration certificate. 

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Frequently Asked Questions

How much percentage is required for an education loan?

Candidates applying for an education loan under the government of India need to score a minimum of 60% in their last academic degree. Education loan is granted to students with impressive educational background. The track record of scores, merit, certificate, and achievements will decide whether a student will get an education loan to study abroad or not. Students with 60% and above marks are treated as meritorious.

Is there any subsidy on education loans?

Yes, a subsidy on education loans is granted by the government of India. Students from economically backward classes can claim interest rebates on their education loans from the government in the name of a subsidy. However, to get a subsidy, there are a few eligibility criteria and parameters that they need to fulfil. Students with good academic scores and parental income not more than INR 4.50 lakhs per annum can avail of subsidies on education loans. However, the eligibility criteria for loan subsidy vary from scheme to scheme.

Which loan is the best?

To improve access to foreign education, some of the best schemes offered by the government are Gujarat Education Loan for abroad studies, Dr Ambedkar Central Sector Scheme, Vidya Lakshmi, Padho Pardesh, NBCFDC Education Loan, and NSFDC Education Loan. Students need to compare all the loan options offered by the government of India before selecting one.

Pratishtha Ghosh

A post graduate in Journalism and Mass Communication, Pratishtha enjoys penning down things significant. What interests her the most is exploring and researching on gamut of study abroad.

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