The Abroad Education Loan Disbursement Process with Indian Private Lenders: A Step-by-Step Guide

Synopsis: The Abroad Education Loan Process with private creditors in India protects record submission, mortgage agreement, and fund launch inside 15 days. It consists of ICICI, IDFC, and Axis Bank offering secured and unsecured loans for reading abroad.

Studying abroad is a dream for many Indian students, and securing the funds for this journey is a crucial step. Education loans from private lenders like ICICI Bank, IDFC Bank, and Axis Bank have become a lifeline for students aspiring to achieve global education.  While the abroad education loan process for disbursement might seem complex, this step-by-step guide aims to simplify it for you.

At Lorien Finance, we are committed to ensuring your education loan process is seamless and stress-free. Let’s dive into the detailed procedure of education loan disbursement with private lenders, covering eligibility, documentation, and the disbursement steps.

Eligibility Criteria

The first step in securing an education loan is to meet the eligibility requirements set by private lenders. These criteria ensure that both the student and co-applicant (typically a parent or guardian) demonstrate the financial stability needed for loan approval. Here’s what private lenders typically look for: 

For the applicant:

• Academic Performance: A minimum of 60% in academics.
• No Gap Years: Consistency in education without unexplained gaps.
• CIBIL Score: A credit score of 725 or higher to demonstrate financial reliability. 

For the co-applicant: 

• Must be a blood relative (parents, siblings, etc.).
• Minimum monthly income of ₹50,000 without any existing debt or financial liabilities. 

Additionally, each lender has a specific list of universities they cater to, ensuring your institution is covered before proceeding. 

Types of Loans Offered 

To help you finance your education abroad, private lenders offer both secured and unsecured loans. The amount offered in these loans are as follows:

Unsecured Loans: Up to ₹1.5 crore.  

Secured Loans: Up to ₹2 crore, with collateral such as property or fixed deposits.  

Documents Required to Secure a Loan from Private Lenders

Each lender has its own abroad education loan process for handling documentation: 

• ICICI Bank and IDFC Bank: All documents are uploaded directly to the bank’s portal for a seamless digital process. 
• Axis Bank: Physical copies of documents are collected by a regional manager assigned to you. 

Here’s a list of documents required by these private lenders to facilitate your loan application for your higher education abroad:

Documents required from the applicant

• Valid Passport
• ID proof (Aadhaar card or PAN Card)
• Acceptance letter from a recognised university abroad
• Past academic transcripts
• Schedule of expenses as shared by the university
• Scores from standardised and proficiency tests
• Scholarships, if any

Documents required from the co-applicant

• ID proof (Aadhaar card or PAN Card)
• Bank statements for the last 6 months

Salaried Co-Applicant

• Salary slips for the last 3 months or Salary certificate on the employer’s letterhead
• Income Tax Returns for the last 2 years
• Form 16 for the last 2 years
• Any additional income proof

Self-employed Co-Applicant

• Income Tax Returns for the last 2 years
• Financial statements for the last 2 years duly signed by a CA
• Proof of Office
• Any additional income proof 

Loan Application Process 

Once all eligibility requirements are met, and documents are submitted, the loan application moves through the following stages.

Step 1: File Logging

The submitted file is logged into the lender’s system for review.

Step 2: Credit Analysis

Lenders conduct a thorough credit analysis, evaluating the financial stability of the applicant and co-applicant.

Step 3: Loan Sanction

After approval, the applicant is required to pay a processing fee to the lender after which the lender issues a sanction letter detailing the loan amount, terms, and conditions.

Loan Agreement and Document Finalisation

After the loan is sanctioned: 

• Physical Document Submission: Applicants must provide all physical documents to the regional manager. 
• Loan Agreement Signing: The applicant, co-applicant, and parents sign the loan agreement provided by the lender, legally binding all the parties to the loan terms. 

Opening a Bank Account

To facilitate the disbursement: 

• A bank account is opened in the private lender’s bank. 
• If the student is already abroad, the funds can be transferred to their international account. 

Disbursement Process

The disbursed loan amount is allocated in two parts: 

• Tuition Fee: Sent directly to the university in compliance with the institution’s deadlines. 
• Living and Miscellaneous Expenses: Transferred to the student’s account for their personal use. 

Timeline for the Entire Process 

The entire disbursement process—from eligibility evaluation to funds being released—typically takes up to 15 days, making it one of the most streamlined processes for education loans in India. 

Why Choose Lorien Finance?

Navigating the education loan process can be overwhelming, but that’s where we step in! With partnerships with leading private lenders like ICICI Bank, IDFC Bank, and Axis Bank, we ensure that your loan application is smooth, fast, and hassle-free. 

FAQs

What happens if my university isn’t on the lender’s list?  

Most private lenders cater to a fixed list of recognised universities. If your institution isn’t listed, we at Lorien Finance can help you explore alternative financing options.  

Can the co-applicant be someone other than a blood relative?

Generally, private lenders require a blood relative as a co-applicant. However, certain exceptions might be possible on a case-by-case basis.  

Can I start the disbursement process while I’m still waiting for my visa?  

Yes, many lenders allow you to initiate the disbursement process, but the funds are usually released after your visa approval.  

Is the living expense amount released in one go or in instalments? 

Living expenses are often disbursed in instalments, depending on the lender’s policy and the student’s course structure.  

What happens if there’s a delay in my admission process? 

Lenders are generally flexible in such cases. Inform your lender promptly to discuss possible extensions for the loan sanction or disbursement deadlines.