Abroad Education Loan for NRI Applicants in India

After graduation, NRI students often choose universities in the same country for their higher education. However, financing quality education abroad can be a burden. Unfortunately, NRI students face strict government regulations for obtaining student loans, especially in countries like the U.S., where they don't qualify for federal loans.

To manage expenses like travel, living costs, tuition fees, and more, an education loan can be crucial for NRI applicants. Opting for an education loan offers advantages such as tax benefits for co-applicants and the favorable exchange rate of the Indian currency against the dollar. If you're an NRI with big dreams of studying abroad, we've got you covered. Get all your questions about education loans for NRI applicants resolved here.

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Types of Education Loans for NRI Applicants

There are two types of education loans that an NRI applicant can apply for -

Secured education loan -  also known as an education loan with collateral. This is a loan where the applicant pledges security along with the loan application. This security can be movable assets (Fixed Deposits, LIC Insurance, and more) or immovable assets (non-agricultural land, residential property, or commercial property). Almost all the public banks in India require collateral to provide you with an abroad education loan.

Read more about: Types of Collateral Security Acceptable for an Education Loan 

Unsecured education loan - an education loan that does not ask the borrower to pledge collateral as security is called an unsecured education loan. Not having security leads to an increased risk for the financial institution and that is why you will usually find the rate of interest of these types of loans on a higher side as compared to secured education loans. These loans also demand a co-applicant or co-signer. It is on the basis of the co-applicants income and CIBIL score that the loan is.

NRI Education Loan Lenders

Just like a normal student application for an abroad education loan, NRI applicants are also eligible to get education loan from the same lenders. The only difference is in the loan Quantum, margin money, and some other features. The different lenders that can provide you with an abroad education loan as an NRI applicant are -

• Public banks - these are financial institutions that are owned and operated by the government. SBI and UBI are 2 such public sector banks that can provide abroad education loans to NRI applicants. In case of secured education loan the loan amount can go upto 1.2 Cr while in the case of an unsecured education loan, the loan amount will be 7.5 Lakhs INR and 20 - 30 Lakhs for SBI and UBI respectively. 
• Private banks - ICICI, Axis, and IDFC FIRST Bank can provide unsecured education loans of up to 40 Lakhs INR. The maximum amount for secured student loans varies among different private banks based on your application profile and the valuation of the property.
• NBFCs - NBFCs including Credila, Avanse, InCred, and Auxilo, offer unsecured education loans to NRI applicants. They can grant up to 60Llakhs INR as unsecured abroad education loans. The rate of interest or the margin money may be higher in the case of an NRI applicant.
• International lenders - the best thing in the case of an international lender is that you can easily get an abroad education loan as an NRI applicant from them as compared to the other mentioned lenders above. They can provide you with up to 100,000 USD in the loan amount.

Education Loan for NRI Student in India: Eligibility Criteria

The eligibility criteria to get an abroad education loan as an NRI application is quite simple. Actually, it is nearly the same as any other applicant. The eligibility criteria are as follows -

• The applicant should be an Indian citizen which can be proved by showing an Indian passport. 
• The co-applicant that will be included in the education loan application must be living in India, he/she should not be an NRI.
• The minimum age of the applicant must be 18 years or above.
• The applicant must have proof of admission to a reputable university with a full-time program. 
• Power of Attorney (POA) must be made.  

What is Power of Attorney?

One additional step involved in obtaining an abroad education loan for NRI students is the Power of Attorney (POA). This legal document grants one person the authority to act on behalf of another individual, empowering them to make legal and financial decisions. The POA can provide either complete or restricted power to the designated individual, enabling them to carry out various actions and make necessary financial choices. 

In this as well there are three situations for making decisions about POA. These situations are - 

1. 
   In the case where the applicant is an NRI while their parents reside in India, the applicant can designate their parents as their Power of Attorney (POA) holders. This means that in the absence of the applicant, the parents will have the authority to act as signatories on their behalf. Granting the parents signatory rights enables a smoother and more efficient completion of the process.
2. 
   In the scenario where both parents and the applicant are NRIs, it is possible to appoint a distant relative as the Power of Attorney (POA) holder. However, it is important to note that the chosen POA holder must meet the lender's requirement of having a stable source of income. Different lenders have specific criteria for designating distant relatives as POA holders, which must be carefully considered. For instance, while NBFCs may permit maternal or paternal uncles as POA holders, private banks might have restrictions in this regard.
3. 
   In the situation where the student is in India while the parents are NRIs, for an unsecured education loan, the Power of Attorney (POA) can be granted to any immediate relative residing in India. This means that the designated immediate relative will have the authority to act on behalf of the parents when it comes to loan-related matters. 

Read More About: Educational Loan on Agriculture Land: Is it Possible?

Expenses Covered Under Education Loan

Education loans for NRI students typically cover a wide range of expenses including tuition fees, hostel fees, exam fees, library and laboratory charges, caution deposits, books, equipment, study materials, travel expenses (such as airfare), as well as project work, thesis expenses, and sometimes insurance premiums. Additionally, they may cover the cost of laptops and other necessary tools for education.

Documents Required for NRI Applicant's Abroad education Loan

The documents that are required from an NRI applicant to get an abroad education loan are -

• Application form with all the necessary documents of applicant and co-applicant. 
• The KYC documents of the applicant like address proof and more. 
• Academic transcripts of all the courses done up till now.
• Proof of standardized tests like GRE or GMAT and also English language proficiency tests like IELTS or TOEFL.
• Admission proof to a reputable university in the form of an offer letter.
• In case of a secured loan, documents related to collateral.

 

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Application Process Of NRI Education Loan

To get an abroad education loan you would have to follow the below-mentioned steps which are just like applying for a loan in case of a general applicant.

 

• 
  You can begin your loan application by checking our abroad education loan eligibility through GyanDhan.
• 
  Once you have completed your loan eligibility application form, you will be getting in contact with an education loan expert from GyanDhan that will help you with the loan process. Here you have to mention that you are an NRI applicant so that your application can be processed accordingly. 
• 
  As per the lender's requirements, a customized document checklist will be provided to you that will list down all the documents and alternative document choices (if any) so that it becomes easy for you to arrange all the necessary documents. Depending on the lender, you may have to submit the documents either online or offline.
• 
  After the documents have been submitted, your verification process will start. It can take around 7 - 15 days depending on the lender and the type of loan. Once the loan has been approved you will get an agreement letter to sign. You can see all the real-time progress of your loan application on the GyanDhan user dashboard. 
• 
  Once you sign the agreement you can start the disbursement process at your convenience and the standard process of the lender.

 

Being an NRI applicant does not prevent you from accessing education loans for studying abroad through lending options available in India. So, why wait? Check your loan eligibility now with GyanDhan and begin your loan application process today.

 

Read Also

• Abroad education loan for Canada
• Documents required for education loan
• Abroad education loan for USA
• Expense cover under abroad education loan
• Abroad education loan without collateral
• Abroad education loan with collateral
• Abroad education loan for UK

Frequently Asked Questions

Is NRI eligible for an education loan?

 

Yes, NRI applicants are eligible for education loans, but the catch is that the loan quantum decreases i.e. for an unsecured education loan the maximum loan cap will be up to 30 Lakhs INR. The rate of interest may also vary. The margin money can also go up to 15% in the case of NRI applicants. 

What is the power of Attorney in abroad education loan?

 

In simple words when the applicant transfers the signatory authority to somebody else like a parent to complete the loan process. This is usually done as the applicant is an NRI but somebody is needed in the country to sign and complete the loan application process. 

What is the eligibility to apply for an abroad education loan as an NRI applicant?

 

The eligibility is as follows:

• Must be 18 years of above
• Indian citizen proof
• Co-applicant income meets the minimum criteria
• Must be admitted to a reputable university.