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Indian Government Education Loan Schemes For Abroad Studies

Written by Muskan Behune

The name is Muskan, so probably was destined to spread smiles wherever I go. Writing is something which has grown on me with each passing day. Follow your passion in saying is a cliché but in doing is serious fun. So here I am to engage with my passion and maybe spread some smiles along the way.

October 19, 2020

Studying abroad can be a transformative and life-changing decision, however, this doesn’t come easy. Those who choose to continue their higher studies abroad, but find it troublesome to arrange funds, now have the choice to make arrangements for funding their studies through loans and education loan schemes.

The Indian government has introduced a few loan schemes to make it more flexible for students to afford education loans for studying abroad.

  1. Dr. Ambedkar Central Sector Scheme


  • You should compulsorily be a citizen of India and must belong to EBC/OBC.
  • For OBC candidates, the total income of all members of the family shall not exceed Rs.3 lakh per annum.
  • For EBC candidates, the family income shall not exceed Rs. 1 lakh mark per annum.
  • You must have a certificate/proof of belonging to EBC/OBC.
  • You should have availed a loan from a scheduled bank under the Educational Loan Scheme of the Indian Bank Association (IBA) for the purpose.


  • A full interest waiver during the moratorium period is offered. Interest subsidy is equipped till the moratorium period only. Further, for loans beyond Rs. 20 lakhs, only the interest on the amount up to 20 lakhs is reimbursed.

Procedure and Requirements

After getting admission to a university, you are needed to file an application asking to avail of the loan under this scheme along with the admission documents to the lending bank. Please note that education loans from NBFCs are not eligible for these education loan schemes. After the submission of needed documents, the bank will process the application and forward it to the Ministry of Social Justice and Empowerment.

Education Loan Schemes

2.Padho Pardesh


The purpose of this minority education loan scheme is to award interest subsidy to exemplary students belonging to economically weaker sections of the notified minority communities as declared in section 2(c) of the National Commission for Minorities Act, 1992 to administer them better opportunities for higher education abroad and hence strengthen their employability.


You are eligible to receive these education loan schemes if you meet with the following requirements:

  • You should have assured admission in the authorized courses at Masters level/Ph.D./M.Phil level abroad courses.
  • You must belong to a minority community. Under Section 2(c) of the National Commission for Minorities Act, 1992, the minor communities are Muslims, Christians, Buddhists, Sikhs, and Zoroastrians (Parsis).
  • You should have availed a loan from a scheduled bank under the Educational Loan Scheme of the Indian Bank Association (IBA) for the purpose.
  • Total income from all members of the family must not cross Rs. 6 Lakh per annum.


  • Students are qualified for a 100% interest subsidy on these education loan schemes till the moratorium period that is the course duration, plus one year or six months after securing a job, whichever is earlier, as specified under the Education Loan Scheme of the Indian Banks Association (IBA).
  • Those applying under a Padho Pardesh scheme would be administered interest subsidy on loans up to Rs 20 lakh only. For loans more than this amount, only the interest on the amount up to 20 lakhs is reimbursed.

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Procedure and Requirements

The practice for this minority education loan scheme usually begins after a candidate has secured admission in a recognized university. With the admission documents, you must reach the bank of your interest, which is a member of IBA, and request the application to process under the Padho Pardesh Scheme. The bank’s education loan scheme must follow IBA’s model education loan scheme – and you need to confirm with your bank when you apply.

Education loans from NBFCs are not eligible for this or any of the government education loan schemes. After filling the loan documents and affixing required documents, the form is sent to the particular department of Minority Affairs for processing.

3. Central Scheme of Interest Subsidy for Education Loans (CSIS):

The Ministry of Human Resources Development, Department of Higher Education has developed this Interest Subsidy for Education Loans for the students of economically weaker section (EWS) for pursuing professional courses in India and abroad. Interest subsidy is provided for the period of the moratorium that is 12 months after the course is completed or 6 months after getting the job, whichever is earlier. The interest subsidy is associated with the existing Education Loan scheme of IBA and restricted to students enrolled in recognized technical/professional courses.


  • You should have got admission in the approved courses from recognized Indian/Foreign universities.
  • You should have availed a loan from a scheduled bank under the Educational Loan Scheme of the Indian Banks’ Association (IBA) for the purpose. Again, loans from NBFCs do not qualify for this benefit.
  • Total income from all members of the family shall not exceed Rs. 4.50 Lakh per annum.


  • Through these education loan schemes, Full interest premium is provided for the moratorium period, which is 12 months after completing the course or 6 months after getting the job.
  • Also, the interest subsidy is granted for loans up to 20 lakh only, and post the limit the interest rate is reimbursed on Rs. 20 lakh only.

Procedure and Requirements

Like the other schemes, the process for CSIS also starts from the respective bank from where the loan is to be sanctioned. Required documents are to be attached to the form and the process is taken further by the bank.

You will need to submit the documents as per the requirement of the lending bank. The document list can vary depending on the type of loan you have opted for that is secured education loan or unsecured education loan. You don’t need to submit any document to the ministry to claim the benefits of this scheme.

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