A Masters program in the US now costs ₹60-80 lakh, the UK ₹45-60 lakh, and Canada/Australia ₹35-50 lakh including living expenses. Self-funding at that scale is rare — roughly 8 out of 10 Indian students heading abroad take an education loan for at least part of the bill. The good news: Indian lenders have dramatically expanded abroad-study financing in the last decade, and the competitive landscape now splits cleanly between public-sector banks (cheapest but slowest), private banks (moderate price, moderate speed), and specialist NBFCs like HDFC Credila and Avanse (priciest but most flexible). Here's the April 2026 lay of the land.
Abroad education loan comparison — April 2026
| Lender | Rate range | Max without collateral | Max with collateral | Processing fee |
|---|---|---|---|---|
| SBI Education Loan | 9.15-11.15% | ₹40 lakh | ₹1.5 crore | ₹10,000 flat |
| HDFC Credila | 10.25-13.00% | ₹75 lakh | ₹1 crore | 1-1.5% |
| ICICI Bank | 10.50-14.50% | ₹50 lakh | ₹2 crore | ₹5,000-₹11,000 |
| Axis Bank | 10.99-14.00% | ₹75 lakh | ₹1 crore | 1% |
| Bank of Baroda | 9.65-11.40% | ₹40 lakh | ₹1.5 crore | ₹10,000 flat |
| PNB (Udaan) | 10.00-11.75% | ₹40 lakh | ₹1.5 crore | ₹10,000 flat |
| Avanse | 11.00-14.75% | ₹75 lakh | ₹1 crore | 1-1.5% |
| IDFC FIRST Bank | 9.75-13.99% | ₹50 lakh | ₹2 crore | 1% |
Collateral vs non-collateral — the fork in the road
Every education loan splits at one question: can you pledge collateral worth ≥ the loan amount?
Collateral-backed (secured) loans
Pledge residential property, fixed deposit, LIC policy with surrender value, or government securities. Loan amount can be 100-150% of collateral value (banks lend against the property's market value, not the circle rate). Upside: lowest rates (9.15-10.50%), largest amounts (₹1-2 crore), longest tenures (up to 15 years post-moratorium). Downside: valuation and legal due diligence add 2-4 weeks.
Non-collateral (unsecured) loans
Lender relies on co-applicant income and — increasingly — the future earning potential of your target school. Public-sector banks cap unsecured loans at ₹40 lakh (CSIS scheme) or ₹75 lakh at private banks / NBFCs for premier institutions. Specialist NBFCs (HDFC Credila, Avanse, ICICI, Axis) maintain internal "Prime List" / "Tier A" school directories — students at schools on these lists get higher limits and lower rates regardless of collateral.
Moratorium — the killer benefit that surprises many
Indian education loans offer a moratorium (repayment holiday) = course duration + 6-12 months. During moratorium, you either pay nothing at all, pay "simple interest" (SI) monthly, or pay "partial simple interest" (PSI) quarterly. What you choose has huge long-term impact:
| Option | Monthly outflow during study | Principal at repayment start (₹50L loan, 2-yr MS) | Total interest over 10-yr tenure |
|---|---|---|---|
| Zero payment (interest capitalised) | ₹0 | ₹62 lakh | ₹44 lakh |
| Simple interest only | ~₹45,000 | ₹50 lakh | ₹30 lakh |
| Simple + partial principal | ~₹55,000 | ₹45 lakh | ₹27 lakh |
If your parents/sponsor can fund simple-interest payments during study, do it. The ₹10-14 lakh lifetime interest saving is the single highest-ROI decision on the loan.
Country-specific notes
United States
Most expensive by a large margin — ₹60-80 lakh for a 2-year MS. I-20 shows Cost of Attendance (tuition + living); most lenders fund 85-90% of COA. ICICI, Axis, and HDFC Credila have the deepest US school lists (2,500+ institutions).
United Kingdom
1-year Masters = lower total cost (₹45-60 lakh). Tier 4 visa requires CAS letter; banks issue sanction letters that feed directly into CAS financial evidence. SBI and Bank of Baroda are particularly strong on UK financing.
Canada
SDS (Student Direct Stream) requires a GIC of CAD 20,635 upfront. Most education loans fund the GIC as part of living expenses. Scotia Bank and CIBC issue GIC certificates that work with Indian loan sanction.
Australia
Genuine Temporary Entrant (GTE) visa requires financial evidence. Banks issue visa-format sanction letters on request. Axis Bank and HDFC Credila have dedicated Australia desks.
Tax benefit — don't forget Section 80E
Interest paid on education loans (including abroad study) is 100% deductible from taxable income under Section 80E for up to 8 years from repayment start. No upper limit on the deduction. For a student earning ₹20 LPA paying ₹3 lakh interest in year 1, the 80E deduction alone saves ₹93,600 of tax (at 31.2% slab). Over the 8-year window on a ₹50 lakh loan, total 80E savings typically run ₹4-7 lakh.
How to pick your lender
Use our education loans hub to browse all eight options side by side, then run our AI loan finder with your target country, school, and family financials to see which lenders pre-qualify you. Check our ₹20 lakh education loan deep-dive for a worked example if that's your target ticket.
Frequently Asked Questions
Can I get an education loan without collateral for abroad studies?
Yes, up to ₹40 lakh at public-sector banks and up to ₹75 lakh at private banks / NBFCs (HDFC Credila, Avanse, Axis) if your target school is on their "Prime List". Co-applicant's income and CIBIL are evaluated.
What is the moratorium period on education loans?
Course duration + 6-12 months grace. During moratorium you can pay nothing (interest capitalises), pay simple interest monthly, or pay partial principal. Paying simple interest during study reduces lifetime cost by 25-30%.
Is HDFC Credila cheaper than SBI for abroad education loans?
No — SBI is cheaper (9.15-11.15% vs Credila's 10.25-13%). But SBI requires full documentation and 3-4 weeks processing; Credila is faster (2 weeks) and more flexible on school approval. Pick on speed/flexibility, not just rate.
Can I claim tax deduction on education loan interest?
Yes — Section 80E allows 100% deduction of interest paid for up to 8 years from repayment start. No upper cap. The deduction is available to the person actually repaying (student or parent co-applicant).
Loans Editor, OnePaisa Editorial
Prasanth writes on borrowing for OnePaisa — personal, home, car and business loans, and the credit-score questions that decide what a borrower is actually offered. Interest rates, processing fees and eligibility rules in his guides come from lender schedules of charges and official product pages, are cross-checked against OnePaisa's verified lender data, and are dated so readers can see how current they are. A rate that a lender publishes as a range is published here as a range, never as a single teaser number.
Work published under this byline follows OnePaisa’s editorial standards — how our guides are researched, fact-checked against primary sources, and corrected.