How to Get an Education Loan in India For NRI Applicants

✓ Collateralized Loan vs Unsecured Loan

✓ Benefits of Indian lenders For Education Loan


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Education is one significant aspect that has an immense part to play in the modern, industrialized world. People need a quality education to be able to survive in this overwhelmingly competitive world. Present-day society is based on people who have high living standards and knowledge which allows them to implement sounder solutions to their quandaries.

Indian students already residing abroad after their graduation in pursuit of this knowledge often choose a university from the same country for their higher education. And it’s no secret that the cost of quality education abroad can burn a hole in the pocket of students and a lack of funds should not come in the way of attaining this knowledge. Unfortunately for NRI students, there are stringent government regulations when it comes to extending student loans for international students like in the U.S., where NRIs do not qualify for federal education loans. 

This article will give you an account of how an NRI student can get a foreign education loan in India. Yes, NRI students can apply for an education loan in India provided a co-signer resides within the country and is a citizen of India.

Types of Educational Loans in India

There are two types of education loans an NRI student can go for

  • Collateral /secured loan - Collateral/Secured loans require students to pledge collateral in order to avail of an education loan. Collateral could be-
  • Immovable property like a house, flat, non-agricultural land, and
  • Liquid security like Fixed deposits, Insurance policies (Term Insurance), and govt bonds.
  • Non-collateral / unsecured loans - An unsecured loan does not require pledging of any collateral to avail of an education loan. A student's co-applicant income is an important deciding factor for an unsecured loan. 
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Education Loan for NRI applicants in India

Nowadays, overseas Indians or Non-Resident Indians (NRI) who basically reside outside India can avail of an education loan from Indian lenders. There are several cases where Indian citizens who reside abroad opt to finance their higher education by seeking an education loan from Indian banks.

A few primary reasons behind this are 

1. Education loan policies of Indian lenders are feasible as compared to those of international lenders

2. If the co-applicant is residing in India, as being an Indian, they can avail of other tax benefits like Section 80E

3. Student loan policies of most international lenders are implemented by keeping international practices in mind

4. And, the value of the currencies of the countries abroad and India differs to a great extent

Because of these above-mentioned reasons, students take an NRI loan in India from Indian lenders over international lenders.

Lenders where NRI student can approach for an Education Loan

It is of utmost importance for students to have an Indian resident co-applicant and an NRI student to hold an Indian Passport for a student loan for international students.

  • Public banks - Public banks like SBI, BOB, etc provide education loans to an NRI for their studies abroad. Public banks do not grant an unsecured loan of more than 7.5 lakhs. For an amount of more than 7.5 lakhs pledging collateral is needed. And depending upon the value of the collateral and the total loan requirement of a student, he/she can get up to 1.5 crores.
  • Private banks - Private banks like ICICI, Axis, etc can grant up to 40 lakhs of unsecured education loans. The maximum amount for a secured student loan for international students varies from bank to bank.
  • NBFCs - NBFcs are a Non-Banking Financial Company that also offers unsecured education loans. There are four NBFCs in India that provide education loans and those are Credila, Avanse, InCred, and Auxilo. They can grant up to 60 lakhs of unsecured foreign education loans.
  • Foreign lenders - Foreign lenders like MPower Financing, Prodigy Finance, Leap Finance, etc can fund up to 80 % of a student's cost depending on case to case. These foreign lenders do not need any collateral or a co-applicant to grant an education loan. 

Additional requirements for NRI students

A lot of Indian lenders have education loan schemes for international students of Indian origin to cover their education expenses abroad. 

Though the eligibility criteria for education loans and the scheme under which an NRI student avails an education loan are the same as the Indian students who aspire to study abroad, there is some additional process involved in the case of NRIs. 

Transferring the power of attorney

Power of attorney (POA) is a legal document giving one person the power to act for another person. The POA holder can have either full authority or limited authority and can take all legal and financial decisions on behalf of the owner.

Therefore, in the absence of the student or the co-applicant for the NRI education loan, the person who holds the power of attorney can sign the necessary legal documents for financial transactions.

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When is Power of Attorney needed?

There could be three scenarios of such a case of NRIs where a power of attorney is needed

  • The student is NRI and the parents are in India - Here students can hand over their signatory rights to their parents/siblings in India through power of attorney.

Once declared power of attorney, the individual who has been given the signatory rights is responsible to execute all the necessary documents to the bank, as and when required. The person who holds the power of attorney has the authority to sign on behalf of the student.

  • Both parents and students are NRI - Here students can give a power of attorney to any of their extended family members.

In the case of a secured loan, they are required to pledge collateral to the bank, and for an unsecured student loan for international students, the POA holder should have a good income source for he/she has to pay the incurred interest/EMIs to the bank. 

Private banks accept only your parents/ parents-in-law, siblings, and spouse as your co-applicant. Whereas NBFCs can also accept parents' siblings and first cousins for education loans for international students.

  • Parents are NRI and the student is in India - Here if a student is applying for an unsecured loan then a student can add any of their immediate family members as a co-applicant.

In the case of secured loans, if one of the parents has collateral in their name then they can hand over the POA to the other parent or close relatives living in India.

Can an NRI be a co-applicant for an Education Loan?

Yes, they can! However, earlier you couldn't name an NRI as a co-applicant, due to which students faced multiple issues while applying for an education loan. When our team at WeMakeScholars came across this issue, we made headway with our associate banks and NBFCs as we understand students' plight. After various discussions, it was concluded that NRIs could be named as education loan co-applicants for a student loans for international students in India. 

Sometimes it’s unmanageable for NRI students to go through this entire POA process and then the loan process alone, so to overcome this impediment you can definitely approach us. Our team at WeMakeScholars pioneered a provision for an NRI to become a co-applicant. We've handled multiple NRI cases. So if you're looking for an education loan in India, reach out to our team at WeMakeScholars without any hesitation. 

Education Loan FAQs

  • How can NRI applicants determine the loan amount and interest rate they are eligible for?

    The loan amount and interest rate for NRI applicants depend on the bank's policies and the course of study. Applicants can check their eligibility by requesting a callback from our financial officer and they can use WeMakeScholars EMI calculators to determine the loan amount and interest rate they qualify for.

  • Can NRI applicants choose a repayment plan that suits their financial situation?

    Yes, most banks offer flexible repayment plans for NRI applicants, allowing them to choose a repayment plan that aligns with their financial situation. This can include a moratorium period, where repayment can be deferred until after course completion.

  • Can NRI applicants apply for an educational loan in India if they already have a loan from a foreign bank?

    Yes, NRI applicants can apply for an educational loan in India, even if they already have a loan from a foreign bank. However, the loan approval and amount will depend on the bank's policies and the applicant's creditworthiness.

  • What documents do NRI applicants need to provide when applying for an educational loan in India?

    NRI applicants must provide proof of identity, address, citizenship, academic qualifications, admission confirmation, and collateral ownership. Additionally, they may need to provide the co-applicants documents and proof of income.

  • What is the maximum loan amount that NRI applicants can avail of for an educational loan in India?

    The maximum loan amount that NRI applicants can avail of for an educational loan in India varies between banks and depends on several factors, such as the course of study, the country of study, and the collateral provided. Typically, banks offer loans of up to Rs.1.5cr