The right time to apply for an overseas education loan


A foreign education is a ticket to leveraging your career; it will give wings to your professional life and overall personality. Living abroad is a life-changing experience for everyone. Meeting new and different personalities helps in the self-development of the individual.

Many students who want to pursue their higher education seek international student loans for financial help. Overseas education loans have become an important financial tool for students to manage their overseas education expenses. However, there is always a concern in the minds of students as to the "right time to apply for an education loan". Time becomes the crucial factor in applying for an education loan abroad and getting their loan disbursed within time.

However, different types of loans have different timelines to get sanctioned. For instance, there are two types of loans: secured and unsecured. A secured education loan can get you a higher loan amount based on your needs, but the application and processing by government banks are quite lengthy. On the other hand, for unsecured education loans, the private banks and NBFCs take less time to get the loan processed.

Factors causing delays in the processing of secured education loans from government banks

Verification of collateral documents: While applying for a secured education loan, you have to pledge tangible or intangible collateral to a government bank or any financial lender to get the loan amount. Mostly, students use their immovable properties, like non-agricultural land or houses. The long processing time at government banks is mainly due to the verification of the property pledged as collateral by the applicant. Public sector banks conduct a legal and financial verification process of the property to verify all the details provided by the applicant and all documents related to the property and to check everything in detail. The bank may reject an education loan abroad if it finds any legal issues.

A list of assets that can be used as collateral: Tangible assets like legally registered land, residential property, non-commercial flats, non-agricultural land, and plots with a defined boundary are acceptable to government banks. Liquid assets like LIC life insurance with a fixed maturity date, government bonds, and fixed deposits are also acceptable as collateral.

Offer letter requirement: Generally, students wait to receive their admission letter from the applied university, which leaves them with less time to apply for an education loan. A university offer letter is not required in the verification phase of a collateral loan; you can easily apply even without an offer letter. However, a university offer letter will be required to proceed further with the education loan.

Advice: Students should start their education loan process immediately after applying to universities instead of waiting until they receive the offer letter. Until the verification process is complete, they will receive their admission letter from the university and can easily move ahead in the education loan process. The verification phase of the education loan for abroad studies process usually takes 2–3 weeks, but it can vary from bank to bank.

Factors causing delays in the unsecured education loan process

Why are unsecured loans processed faster?

Unsecured education loans are processed faster because they do not require collateral. The verification phase of collateral property by the government bank makes it long and tiring, while unsecured loan lenders like NBFCs remain concerned only about the CIBIL score and the co-applicant’s income.

Factors leading to a delay in the processing of an unsecured loan:

The CIBIL score and co-applicant’s income are important for applying for the unsecured education loan. However, applicants often face some hurdles in the processing of non-collateral education loans.

Co-applicant’s income: Sometimes, the co-applicant does not possess the right document, like an ITR or any other legal document.

CIBIL Score: Applicants and their co-applicants with low CIBIL scores are found to be defaulters and hence not acceptable by private lenders.

What is the ideal time to apply for a study abroad loan?

Ideally, the right time to apply for your education loan is before 6 to 12 months of your course intake. Starting early will give you enough time to do your research about different lenders, and you can start by comparing the loan schemes of different lenders, rates of interest, and repayment duration.

Applying before your course intake will give you enough time to understand the eligibility criteria for an education loan, and according to that, you can make a better decision. Students who are applying for admission to international universities, specifically in countries like Canada, Australia, and New Zealand, should apply for education loans early. In these countries, students are required to submit their tuition fees and living expenses even before applying for their visas. So, it is advisable that students apply for the education loan immediately after submitting their application forms to universities instead of waiting for an offer letter. In this way, students will remain stress-free in managing their financial obligations and will prevent themselves from facing any financial obstacles at the time of fund and fee submission to universities.


The right time to apply for education loans is the most frequently asked question by students. It’s not possible to predict an exact time to apply, but applying at least 6 months before your course intake will keep you in a safe zone. It is important to keep in mind that arranging finances in a short span of time, especially when the admission procedure is around the corner, can be difficult, so being early will keep everything moving in the right direction. However, students can contact Education Loan Guru to get an education loan for abroad studies. Education Loan Guru will assist students to get instant student loan online for aspirants of higher education abroad.

By Education Loan Guru