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NRI Educational Loan

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Education system in India has come a long way. From modest beginnings the country’s educational institutions have emerged to attain the status of one of the best destinations for higher studies in the world. Today the country has an array of internationally reputed educational institutions where not only local students study but also students from NRI families benefit.

education loan 300x200 NRI Educational Loan

Most educational institutions in India admit NRI students through their quota systems but for a higher fee. However, the higher fee structure has not deterred NRI students from studying in India thanks to the NRI educational loans available now.


What is NRI education loan?

Simply put, an NRI education loan will allow an NRI to fund his/her son’s/daughter’s higher education in India. Typically, an NRI loan for higher education in India will be between Rs. 4 lakh and Rs. 20 lakh.

Collaterals and Documents

A collateral security is not needed for loans up to Rs. 4 lakh. However, a suitable third party guarantee will be required for loans between Rs. 4 lakh and Rs. 7.50 lakh. And for loans between Rs. 7.50 lakh and Rs. 20 lakh, an NRI should furnish 100% collateral in the form of LIC policy or NSC or UTI units or RBI bonds or an immovable property.

The documents that will be required to process the loan will include the application form jointly signed by the student and the parent or guardian; 2 copies of passport size photographs; the copies of the salary certificate or income statement of the NRI parent or guardian; the copies of the passports of the student and the parent or guardian; the proof of admission from the institution, and the list of expenses to be incurred during the course of the study.

Who is eligible? What courses can be studied?

All Indian nationals and students are eligible for NRI loan subject to clearing the entrance tests or the admission procedures for eligible courses. NRI students can study in recognized colleges and universities courses on technical, professional at graduate or post graduate or doctorate levels. They can also study computer courses accredited by the Department of Electronics or professional courses like medicine or architecture, or business administration etc.

What costs it cover?

The loan will cover all costs related to admission fee, purchase of books/equipments/uniforms and instruments, tuition fee, examination fee, costs related to using library, refundable deposits and other costs of maintenance. Moreover, the scheme can finance for deposits.

When a student, for reasons beyond his control, could not complete his study, the sanctioning authority might allow the student to complete the course for a period of 2 years tops.

How it is distributed?

The distribution of the loan will be in line with the requirement of the institution or the books vendor or the concerned department depending on the purpose.

Repayment mode

If the student is employed within 6 months after completing the course, the repayment course will start after one month from the date of employment. And following this the entire loan should be repaid in 5 to 7 years.

In case of default or irregularity in repayment, an annual penal interest of 1% and 2% over and above the interest rate of loan will be charged.