Education Loans for MBBS Abroad: A Detailed Overview

It’s a no-brainer that studying MBBS abroad is not a cheap affair at all. Once the student obtains a medical seat in any popular medical college in the world. The next big requirement that he has to encounter is the high tuition fees. It is when education loans for MBBS abroad come into the picture. Abroad education loans have become a default choice for Indian students who want to go overseas for higher education. As the number of foreign colleges and universities offering MBBS courses is very few, students need to be aware of the options of education loans for MBBS overseas, to ensure that the hard-earned opportunity is not missed.

It is important to note that it is almost impossible to get unsecured loans for MBBS abroad as private lenders usually refrain from giving an MBBS loan considering its duration and a few other factors. Does this mean that students can’t get a study loan for MBBS abroad? No, students can get an overseas MBBS loan based on collateral. In this blog, we have shed some light on the details of education loans for studying MBBS abroad.

Features of Education Loan for MBBS Abroad

When pursuing an MBBS abroad, students often rely on education loans to cover tuition fees, living expenses, and other costs. Indian banks and financial institutions offer specialized loans for medical studies abroad, with some covering up to 100% of expenses. Popular destinations include Russia, Ukraine, and the Philippines, where fees are relatively affordable compared to Western countries.

Key factors to consider while planning for an education loan include loan amount, interest rates, repayment terms, and eligibility criteria. Moreover, students should check if the institution is recognized by global medical councils, as this can impact future career opportunities.

Secured Loans for MBBS Abroad:

Most of the students who go for foreign MBBS courses choose countries like China, Ukraine, the Philippines, etc., which are not on the list of preferred countries by private lenders in India. Also, the risk evaluation and the approximate duration to recover the loan make lenders resist launching any product for MBBS education loan without collateral. It leaves students to apply for secured education loans from public-sector banks.

Secured Education loans for MBBS Abroad Options:

Secured education loans are given based on collateral. Government banks in India are the best banks for MBBS courses, considering the lower interest rates, chances of approval, tax benefits, etc. Some of the major public-sector banks in India offering loans with collateral are SBI, Bank of Baroda (BOB), and Punjab National Bank (PNB). As these entities are government-backed, their trust factor also outweighs others.

Types Of Secured Education Loan For MBBS Abroad:

A secured loan requires collateral, yet the type of collateral affects the type of secured loan and the loan amount:

Loan Against Property (LAP):

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  Collateral: Residential house, apartment, or commercial property.
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  Loan Amount: 70-90% of the collateral value, up to INR 3 crores.
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  Benefits: Lower interest rates, flexible repayment tenure (10–15 years), and high approval chances.

Loan Against Fixed Deposits (FDs):

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  Collateral: Bank Fixed Deposits.
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  Loan Amount: Usually up to 90%–95% of the FD value.
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  Benefits: Quick approval, minimal documentation, and lowest interest rates.

Loan Against Insurance Policies:

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  Collateral: Eligible life insurance policies with surrender value.
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  Loan Amount: Generally up to 80%–90% of the policy’s surrender value.
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  Benefits: Simple process, moderate interest rates, fast disbursal.

Loan Against Government Bonds/Securities:

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  Collateral: Bonds, debentures, or other approved securities.
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  Loan Amount: Typically up to 80%–90% of market value.
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  Benefits: Competitive interest rates, relatively easy documentation.

Read more about: Education Loan for MBBS in Russia

Cost of Study for MBBS in Top Countries

The table given below talks about the average tuition fee and living expenses for the top countries that offer MBBS. 

Types of Education Loan for Medical Studies

You must understand the various factors that influence the education loan for MBBS abroad. Considering such factors will help you make an informed decision.

Depending on the Study Destination:

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  Domestic Education Loan: These loans are designed for students who are aiming to pursue their medical education in India only.

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  Study Abroad Education Loan: These loans target students who desire to pursue their medical education from abroad.

Depending on the Academic Level:

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  Loans for Undergraduate Studies: These loans are designed for students who wish to enroll in undergraduate courses. Students to become eligible for such loans must have passed their secondary education.

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  Loans for Postgraduate Studies: Those who are enrolled in postgraduate programs become eligible for these types of loans. 

Depending on the Security Offered:

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  Loans Secured by Deposits: In such loans, borrowers are required to pledge fixed or recurring deposits as collateral.

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  Loans Secured by Property: Borrowers pledge immovable assets such as houses, apartments, or land as security. 

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  Loans Secured by Financial Instruments: Borrowers use securities like bonds, debentures, or equity shares as collateral to secure loans.

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  Loans with Third-Party Guarantee: Under this type of loan, the borrower requires a guarantor, such as a relative or friend, to co-sign the loan agreement.

To learn more about the types of collateral accepted in an Education Loan, click here.

Why No Unsecured Loans for MBBS Abroad?

Pursuing an MBBS degree abroad can be a costly venture, as it includes lots of expenses. The cost of the course can be around INR 30-60 Lakhs, which includes only tuition fees, living costs, travel, and visa charges.

Other expenses, such as books and instruments, are added on while the MBBS study abroad starts. Thus, many students seek education loans to fund their medical studies. However, unsecured loans without collateral are rarely granted for MBBS abroad. Here's why:

Loan Default:

Students are required to clear FMGE/NExT to practice in India, which takes around additional one-year of the student's life. However, the pass rate of the exam is low, and abroad job opportunities require a Master’s.

Course Duration:

MBBS abroad takes 5–6 years, delaying repayment and increasing risk for lenders.

No Guaranteed Income:

Unlike tech or business degrees, medical graduates face licensing barriers and limited job options post-study.

Banking Policies:

Most lenders don’t approve unsecured loans for MBBS programs in countries with lower perceived academic or career value.

Need for Collateral:

Collateral-backed loans reduce risk, allowing higher loan amounts and better interest rates.

Top Banks that Offer Secured Education Loan for MBBS in Abroad

Here are the top lenders that can provide you with an education loan for MBBS abroad. The target country does matter in this case, but a generalized idea about how much loan you can take is given below:

Interest Rate of Education Loan For MBBS in Abroad

Public-sector banks, as stated above, offer education loans at lower interest rates in comparison to private lenders. The study abroad loan interest rate in India is determined by banks based on the Marginal Cost of Funds-Based Lending Rate (MCLR). It is the benchmark on which most Indian lenders calculate the foreign education loan interest rates. This MCLR is evaluated by taking into account several factors such as the marginal cost of funds, the tenure premium, the operating cost, etc.

Though the MCLR is the basis of all the abroad education loans for MBBS fixed by the Indian lenders, most public-sector banks’ interest rates are calculated as MCLR + Spread (a premium amount levied by lenders). Typically, the interest rate of government bank education loans ranges between 8% and 10%. For instance, SBI education loan for MBBS abroad starts around 8.8% p.a. The maximum loan amount that can be sanctioned by government banks could go up to INR 1.5 Crores.

Special Education Loan Schemes for MBBS

Below are some of the schemes offered by various lenders to make higher education more feasible.

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  SBI Global Ed-Vantage Scheme: This scheme is designed for students who wish to study MBBS abroad. Students can get a loan amount of up to INR 1.5 cr. at very low interest rates with a repayment period of up to 15 years.

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  Bank of Baroda Education Loan for Medical Studies: Under this scheme, a student can avail loan amount of up to INR 80 lakhs with a repayment period of 15 years. 

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  HDFC Credila Medical Education Loan: A student can get up to 100% coverage of their tuition fee and hostel charges under this scheme with a flexible repayment period.

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  Axis Bank Education Loan for MBBS: Students enrolled in a course like MBBS can secure a loan amount of up to INR 75 lakhs. Students can borrow unsecured loans up to INR 40 lakhs under this scheme.

Eligibility Criteria Of Secured Loans For MBBS Abroad

Some of the common eligibility criteria for secured loans in India for abroad education are:

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  Students must have all the papers related to collateral security. 
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  The applicant must be an Indian national. 
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  The applicant should have been admitted to a recognized institute abroad. 
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  The applicant must have had a good academic record. 
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  A good CIBIL score is a criterion of most banks when sanctioning an abroad education loan.

Note: For applicants looking for a loan to fund their MBBS courses in countries like Ukraine and China, there are special rules and regulations. For instance, The State Bank of India might require students to take a country deviation to fund their MBBS courses in such countries.

Documents Required For Education Loan for Medical Studies

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  Identity Proof: Passport, Aadhar, PAN card
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  Academic Documents:  Admission letter, mark sheets, entrance exam results
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  Incom Proof:  Salary slips, ITRs of co-applicant, Form 16
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  Collateral Documents:  Property papers, fixed deposit certificates
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  Loan Application Form: With passport-size photographs

Chances of Approval of Abroad Study Loan For MBBS Courses

Banks in India always go through the student’s profiles and decide according to them. For example, the chances of success for applicants who have applied to MBBS programs in the USA are much higher. The same success rate cannot be seen for MBBS courses in countries such as Ukraine, the Philippines, or China. This is because most of the universities located in these countries are not on the list of many government banks.

Issues Faced By Students When Applying Directly for an Education Loan For MBBS Abroad

Applying for an education loan MBBS abroad often involves challenges that students should be aware of. 

Lack of Clarity:

Students struggle with understanding lender-specific rules and regulations. Thus, students should understand the collateral documents, co-applicant, and income criteria. Understanding these terms would help you avoid delays and loan rejections.

Complex Documentation Process:

The loan process requires extensive documentation, income proofs, and legal certificates. Arranging all these documents creates chaos and leads to incorrect or incomplete submissions. 

Difficulty in Securing Collateral:

Education loan MBBS abroad mandate collateral, and students face difficulty arranging one. Often, students apply with collateral that isn’t acceptable or doesn’t meet the required loan amount.

Delays in Loan Approval:

The education loans for medical study require lengthy verification approval processes, thus causing delays in the fund disbursement and impacting the admission deadlines. 

High Loan Rejection Rate:

Due to perceived risks associated with foreign MBBS programs, lenders often scrutinize these applications closely, resulting in higher rejection rates without expert guidance.

Limited Knowledge of Suitable Lenders:

Without proper guidance, students choose the lenders whose policies don’t align with their specific needs, wasting valuable time and effort.

Education Loan For MBBS In India

Planning to study MBBS in India also demands a hefty amount of money. Education loan MBBS India are widely accessible through banks and NBFCs, which typically cover almost 100% of the expenses. Students can avail of both secured and unsecured loans, depending on the amount required and the institution's fee structure. These loans usually feature attractive interest rates, flexible repayment terms, and simplified approval processes, making medical education affordable for aspiring doctors across the country.

Read More: Education Loan for Medical Studies in India

Apply For An Abroad MBBS Loan Via GyanDhan

Even though getting a secured education loan is way easier than getting an unsecured education loan, the process is still cumbersome and filled with numerous obstacles. Banks may reject the loan because of a lack of some documents. Students can avoid all such pitfalls by contacting GyanDhan. Steps to apply for an abroad MBBS loan via GyanDhan are:

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  Get in touch with GyanDhan.
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  Our counselor executes a simple 3-step loan application process, helping in easier and faster loan sanctioning. 
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  The counselor will assess the student’s profile and will recommend the best lender after closely evaluating the eligibility. 
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  Students can then finalize the lender after our recommendation for the best options, as per our expertise. 
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  Once the lender is decided upon, GyanDhan then sends over a customized document checklist needed for the loan application.
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  The counselor will also help the student with submitting the documents. We collect the document from students’ doorstep or students will have to upload them online. In both cases, students will not need to step out of their homes. 
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  After the document submission, we coordinate with the bank and help expedite the process. 
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  We keep students updated and try to resolve any bottlenecks if they come in the loan process. 

In a nutshell, getting an education loan for MBBS abroad may look like a cumbersome task. However, with proper research and taking help of education loan experts like GyanDhan, students can make the whole procedure simple. To apply for an abroad education loan, contact GyanDhan now!

Read Also:

• 
  Top 10 Universities for Indian Students to Study MBBS Abroad at Low Cost
• 
  Student loans vs Self-funding: Which is Better?
• 
  Indian Government Education Loan Schemes To Help Students Study Abroad
• 
  Vidyalakshmi Education Loan

Frequently Asked Questions