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Education Loan For Abroad Studies By Indian Government
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Government Education Loan for Students to Study Abroad

Government Education Loan for Students to Study Abroad

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Education loan for abroad studies by the Indian government - GyanDhan brings a comprehensive guide on government education loan for study abroad

GyanDhan
Ananya Ghai
Updated on:  28 Jun 2024  | Reviewed By:  Aman  | 74.7K | 28  min read

The Government of India has implemented various schemes to provide financial assistance and interest subsidies to students pursuing further studies abroad. These initiatives are designed to support students from economically weaker sections and marginalized communities in their educational pursuits. It is important to note that though it is commonly referred to as government of India education loans for study abroad, these initiatives are not direct loans but rather schemes that offer financial aid and interest subsidies. By availing these schemes and govt education loan students can benefit from reduced interest rates, flexible repayment options, and other forms of support. Let's explore some of the key government of India study loans and government schemes that facilitate affordable education and empower students to achieve their academic goals.
 

Important points about foreign education loan by government of India:

  • list items
    Under the below-mentioned subsidy schemes, a full interest waiver during the moratorium period is provided. 
  • list items
    The Government of India interest subsidy scheme is linked with the Indian Banks Association (IBA) and hence applicable only to those banks that are members of the IBA.
  • list items
    Loans from NBFCs are not eligible for these schemes.
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Eligibility Criteria to Apply for a Student Loan

To qualify for government study loan, applicants generally need to meet the following basic eligibility criteria:

  • list items Academic Performance: Achieved 60% or more in the 12th board examination.
  • list items Documentation: Must provide valid proof when applying for minority, caste, or EWS-based scholarships.
  • list items University Admission: An admission letter from the university is mandatory.
  • list items Nationality: The applicant must be a citizen of the country.

 

In addition to these requirements, specific schemes may have additional eligibility criteria. It's recommended to check the official website of the respective scholarship or government student loans India for detailed information.

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Government of India Education Loan for Study Abroad Interest Subsidy Schemes 

1. Dr. Ambedkar Central Sector Scheme

The Dr. Ambedkar Central Sector Scheme provides interest subsidies on education loans for overseas studies to students who belong to Other Backward Classes (OBCs) or Economically Backward Classes (EBCs). This govt education loan scheme is available for meritorious students who have secured admission in the approved courses at Masters, M.Phil, or Ph.D. courses abroad. 

Eligibility criteria:

  • list items Applicants should either belong to EBC or OBC.
  • list items For OBC candidates, total family income shall not exceed INR 8 Lakh per annum.
  • list items For EBC candidates, total family income shall not exceed INR 5 Lakh per annum.

Procedure:

  • list items After securing admission to a recognized Indian or foreign university, you are required to file an application asking the bank to avail your loan under this scheme. 
  • list items After submission of the required documents, the bank will process the application and forward it to the Ministry of Social Justice and Empowerment.
  • list items The Ministry of Social and Justice Empowerment will either accept or decline your application.

2. Central Sector Interest Subsidy (CSIS)

The Ministry of Human Resources Development and Department of Higher Education has formulated this government loan for study abroad interest subsidy for economically weaker sections (EWS) for pursuing technical/professional courses in India. 

Eligibility criteria:

  • list items Applicants should have secured admission to a recognized Indian/foreign university.
  • list items Applicant’s total family income shall not exceed INR 4.50 Lakh per annum.

Procedure: 

  • list items The process for CSIS begins from the respective bank from where the loan is to be sanctioned.
  • list items Required documents are to be attached to the form and the process is taken further by the bank.

3. Interest Subsidy Scheme on Education Loan by the Government of Gujarat

Education loan for study abroad by the Gujarat government offers a 100% interest subsidy to economically weaker students from Gujarat who wish to pursue higher studies abroad. Through this govt education loan for abroad studies by the Indian government without collateral scheme, students can get up to INR 15 Lakh for overseas study. This govt education loan scheme is available for professional courses at graduate, post-graduate, and diploma levels.

Eligibility criteria:

  • list items Applicants must have secured at least 60% in your 12th grade.
  • list items The total family income should be less than or equal to INR 6 Lakh annually.
  • list items The interest subsidy under this scheme will not be available to the students who have left study in the middle of the curriculum or have been expelled from the institutions.  

4. Padho Pardesh Scheme

Please note that this scheme has been discontinued by the Government of India.

The objective of the government study loan scheme was to award 100% interest subsidies on education abroad loans to meritorious students belonging to economically weaker sections of society and hence enhance their employability. 

The students should belong to the notified minority communities (Muslims, Christians, Buddhists, Sikhs, and Parsis) as declared in section 2(c) of the National Commission for Minorities Act, 1992.

Eligibility criteria:

  • list items Students should have secured admission into the approved courses at the Master, Ph.D., or M.Phil level.
  • list items They must belong to a minority community as mentioned above. 
  • list items Candidates should have availed loan from a scheduled bank under the Educational Loan Scheme of the Indian Bank Association (IBA) for the purpose.
  • list items Total income from all sources of the candidate's family must not exceed INR 6 Lakh per annum.

Procedure:

  • list items The education loan government of India application process usually begins after a candidate has secured admission to a recognized university/college. 
  • list items Along with the admission papers (including the offer letter), you must approach the bank of your choice, which needs to be a member of IBA and request the application to be processed under the Padho Pardesh scheme.
  • list items After filling out the loan application form and attaching the required documents, the form is sent to the respective Department of Minority Affairs for processing.

 

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Government of India Education loan schemes for Study Abroad 

1. Credit Guarantee Fund Scheme for Education Loans (CGFSEL)

In 2015, the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) was introduced by the Government of India. This govt education loan for study abroad is primarily for students who wish to study abroad but do not have any collateral or co-applicant to pledge. Under this scheme, you can get up to INR 7.5 Lakh loan without any collateral or co-applicant. 

Requirements:

  • list items The student should belong to the EWS (Economically Weaker Section) category.
  • list items The annual family income should be less than INR 4.50 Lakh. 
  • list items You should have secured admission to a recognized university in India or abroad for an approved technical or professional course.  

2. National Minorities Development & Finance Corporation (NMDFC)

The National Minorities Development & Finance Corporation (NMDFC) is a government body that works toward financing the minority sections of society, through State Channelising Agencies (SCAs). NMDFC provides loans to study in India & abroad for professional and job-oriented courses.

NMDFC has divided the minorities into two subsections:

  • list items Credit Line 1: It refers to the candidate with an annual family income of INR 1.20 Lakh in urban areas & INR 98,000 in rural areas.
  • list items Credit Line 2: It refers to the candidate with an annual family income of INR 6 Lakh.

Eligibility Criteria:

The corporation's objective is to provide subsidized financing for self-employment to underserved minorities, including Muslims, Christians, Sikhs, Buddhists, Parsis, and Jains.

 

For Credit Line 1:

Feature Description

Education loan for study in India

Up to INR 20 Lakh

Education loan for study abroad

Up to INR 30 Lakh

Rate of Interest (ROI)

3% per annum

Moratorium period

6 months after completing the course or getting a job.

Repayment time

5 years

 

For Credit Line 2:

Feature Description

Education loan for study in India

Up to INR 20 Lakh

Education loan for study abroad

Up to INR 30 Lakh

Rate of Interest (ROI)

8% per annum for men 5% per annum for women

Moratorium period

6 months after completing the course or getting a job.

Repayment time

5 years

3. National Safai Karamcharis Finance & Development Corporation (NSKFDC)

The NSKFDC actively works toward the economic development of the safai karamcharis/ Manual Scavengers community. Through this government education loan for study abroad, you can avail education loans to study abroad for the following courses:

  • list items Graduation courses in all disciplines.
  • list items Post-Graduation courses in Medical, Engineering, Management, IT, Law, and Computers.
  • list items Job-related courses having a minimum of 1-year course duration such as Sanitary Inspector, Diploma in Physiotherapy, Pathology, Nursing, Hotel Management & Tourism, Journalism & Mass Communication, and Geriatric Care.

Eligibility criteria:

  • list items You should be identified under the National Scheme of Liberation & Rehabilitation of Scavengers.
  • list items You should have obtained admission for a specified professional or technical course for the ongoing academic session.
Feature Description

Education loan for study in India

Up to INR 10 Lakh

Education loan for study abroad

Up to INR 20 Lakh

Rate of Interest (ROI)

4% per annum

(0.5% rebate for women who wish to pursue education in India)

Moratorium period

1 year

Repayment tenure

5 years

4. National Backward Classes Finance & Development Corporation (NBCFDC)

The NBCFDC is a government undertaking that provides education loans for both studies in India and abroad. For study in India loans, 90% of total expenses are covered, whereas, loans for abroad education cover 85% of the total expenses.

Eligibility criteria:

  • list items The applicant should be a member of a backward class (as notified by the Central Government/State Government).
  • list items The per annum income of the family should not exceed INR 3 Lakh. 
  • list items The applicant should have secured admission to a professional or technical course through an entrance test/merit-based selection process.
Feature Description

Education loan for study in India

INR 15 Lakh

Education loan for study abroad

INR 20 Lakh

Rate of Interest (ROI)

4% p.a. ( Men)

3.5% p.a. (Women)

Moratorium period

5 Years

Repayment tenure

15 Years

5. National Scheduled Castes Finance & Development Corporation (NSCFDS)

The NSCFDC is a government body that works for the welfare of the scheduled castes. A maximum loan amount of INR 30 Lakh or up to 90% of the course fee, whichever is less, will be sanctioned for your abroad education.

Eligibility criteria:

  • list items Applicants must be an Indian citizen.
  • list items Applicants must have a valid Scheduled Caste (SC) certificate issued by the competent authority.
  • list items The family income of the loan applicant should be up to INR 3 Lakh per annum.
  • list items Applicants must have secured admission to a recognized university abroad on the basis of merit to be able to take a loan from NSFDC.
Feature Description

Education loan for study in India

90% of the course fee or INR 20 Lakh

(whichever is less)

Education loan for study abroad

90% of the course fee or INR 30 Lakh

(whichever is less)

Rate of Interest (ROI)

4% (0.5% rebate for women beneficiaries)

Moratorium period

6 months after the course is completed or getting employment. 

Repayment tenure

10 years for loans below INR 7.5 Lakh

15 years for loans above INR 7.5 Lakh

6. National Handicapped Finance & Development Corporation (NHFDC)

The NHFDC was formulated by the Ministry of Social Justice and Empowerment. Students with disabilities are eligible for availing education loans to study in India or abroad for professional undergraduate & postgraduate courses under this scheme.

Key points regarding the loan scheme:

  • list items For loans up to INR 4 Lakh, collateral is not required. 
  • list items For loans up to INR 7.5 Lakh, tangible collateral of suitable value is required. 

 

Note: In exceptional cases, the collateral requirement can be waived off if the officer granting the loan is satisfied with the net worth of parents who would be executing the documents as ‘joint borrowers’.&nz

Feature Description

Education loan for study in India

INR 10 Lakh

Education loan for study abroad

INR 20 Lakh

Rate of Interest (ROI)

4%

(0.5% rebate for women beneficiaries)

Moratorium period

1 year after the course is completed or getting employment. 

Repayment tenure

7 years

7. National Scheduled Tribes Finance and Development Corporation (NSTFDC)

The NSTFDC was set up by the Ministry of Tribal Affairs in 2001. It provides financial aid for technical and professional courses to study in India or abroad.

Feature Description

Education loan for study in India

90% of the course fee or INR 20 Lakh (whichever is less)

Education loan for study abroad

90% of the course fee or INR 30 Lakh (whichever is less)

Rate of Interest (ROI)

4% (0.5% rebate for women beneficiaries)

Moratorium period

6 months after the course is completed or getting employment. 

Repayment Tenure

10 years for loans below INR 7.5 Lakh

15 years for loans above INR 7.5 Lakh

 

Top Government Scholarships for Indian Students

 

 

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Benefits of Government Education Loans

Government education loans, available through various state or central government schemes, offer numerous advantages to students. Here are some key benefits:

  • list items Low Interest Rates: Government education loans typically come with minimal interest rates, making them more affordable compared to private loans.
  • list items Interest Subsidy: Many schemes offer interest subsidies, reducing the overall cost of the loan during the study period.
  • list items Collateral-Free Loans: Loans up to INR 7.5 Lakhs generally do not require collateral, easing the application process for students and their families.
  • list items High Loan Amounts: These loans can cover substantial expenses, with loans available up to INR 1.5 crore for higher education.
  • list items Simplified Approval Process: The application and approval processes for government education loans are designed to be straightforward and student-friendly.
  • list items Flexible Repayment Options: Borrowers can benefit from flexible repayment terms, accommodating their financial situation after graduation.
  • list items Generous Moratorium Period: There is typically a moratorium period of one year after course completion before repayment begins, allowing graduates time to secure employment.
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How to Get Education Loan from Government?

Applying for a student loan in India by government can be a straightforward process if you follow the right steps. Government student loans are an excellent option for financing your higher education, whether you're planning to study within the country or abroad. Here’s a comprehensive guide on how to get an education loan from the government.

1. Research and Choose the Right Loan Scheme

Before applying, it's crucial to research the various government education loan schemes available. Popular schemes include the Central Sector Interest Subsidy Scheme (CSIS) and the Vidya Lakshmi Portal, which offers multiple loan options from different banks. Ensure the chosen scheme covers your educational needs, whether it's for domestic or international studies.

2. Check Eligibility Criteria

Each loan scheme has specific eligibility criteria. Generally, applicants must:

  • list items Be an Indian citizen
  • list items Have secured admission to a recognized institution in India or abroad
  • list items Meet academic requirements (usually a minimum percentage in the previous qualifying exam)
  • list items Provide a co-applicant (typically a parent or guardian)

3. Gather Required Documents

Collect all necessary documents before starting the application process for a government education loan for abroad study. Commonly required documents include:

  • list items Proof of admission
  • list items Academic records
  • list items Identity and address proof
  • list items Income certificate of parents/guardians
  • list items Statement of expenses
  • list items Bank account statement of the borrower (and co-borrower, if applicable)
  • list items Passport-size photographs

4. Apply Online or Offline

You can apply for a government education loan for abroad study through online portals like the Vidya Lakshmi Portal, which streamlines the process and provides access to multiple banks. Alternatively, you can apply directly at the bank's branch.

 

Online Application Process:

1. Register on the Vidya Lakshmi Portal.

2. Fill out the Common Education Loan Application Form (CELAF).

3. Upload the required documents.

4. Choose the preferred bank(s) and submit the application.

 

Offline Application Process:

1. Visit the nearest bank branch that offers government education loans.

2. Request the application form and fill it out.

3. Submit the form along with the required documents.

5. Loan Approval and Disbursement

Once your application is reviewed and approved, you will receive a loan sanction letter outlining the loan amount, interest rate, repayment schedule, and other terms and conditions. The loan amount is usually disbursed directly to the educational institution in installments.

 

The above schemes offer benefits such as lower interest rates and flexible repayment options, enabling students to pursue higher education while minimizing their overall costs. By availing themselves of these schemes, students can access the necessary financial assistance, aspire for higher education, and achieve their academic goals without being burdened by excessive financial obligations. These government initiatives play a crucial role in empowering students from economically weaker sections and marginalized communities to overcome financial barriers and unlock opportunities for a brighter future. If you are looking for the right education loan to fund your study abroad journey check your education loan eligibility at GyanDhan

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Frequently Asked Questions

What are some top education loans for abroad studies by the Indian government?
 

Some top government education loan for study abroad are:

  • list items Dr. Ambedkar Central Sector Scheme
  • list items Education Loan Scheme of the NBCFDC
  • list items Central Sector Interest Subsidy
What is the minimum percentage required to apply for a government education loan for study abroad?
 

The minimum percentage required to apply for an abroad education loan by the Indian government is 60% mostly. To avail the government loans/schemes, students should hold a strong academic background.

What are the documents required for applying for a government loan for study abroad?
 

Documents required for government loan for abroad study are-

  • list items Photo ID
  • list items Residence proof
  • list items Academic documents of student
  • list items Offer letter of the university/college
  • list items Bank statement of the last 8 months of co-applicant
  • list items Income proof of the co-applicant
  • list items Collateral proofs
  • list items Income tax return documents (if the applicant is self-employed)
Is there any subsidy on education loan for abroad studies by the Indian government?
 

Yes, there are several government schemes to avail interest subsidies on education loans, such as the Central Scheme of Interest Subsidy, and Credit Guarantee Fund Scheme to name a few.

When will the repayment start for the education loan for abroad studies by the Indian government?
 

The repayment tenure usually starts 6 months or 1 year after the program completion or after getting employed, whichever is first.

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