Planning to pursue a diploma course abroad but worried about financing? You're not alone. Over 1.3 million Indian students study abroad each year, and diploma programs have become increasingly popular due to their shorter duration and career-focused curricula.
This comprehensive guide covers everything you need to know about getting an education loan for diploma courses abroad, including eligibility criteria, interest rates, and the best financing options available in India.
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Wisdom Corner If you are planning to pursue a diploma course abroad, this guide helps you clearly understand which Indian banks and NBFCs offer education loans, the interest rates they charge, and how loan options differ based on collateral. You’ll learn about secured loans with lower interest (starting ~8.25%), unsecured loans with faster approval, government-backed schemes, and lender-wise comparisons. The content also explains eligibility, repayment, tax benefits, and country-wise considerations, enabling you to choose the right bank, the lowest interest option, and the best financing strategy for your overseas diploma studies |
Can I Get Education Loan for Diploma Course Abroad?
Yes, absolutely. Indian banks and NBFCs offer education loans for diploma courses abroad, though eligibility criteria and loan amounts may differ from those for degree programs. Many lenders now recognise the value of professional diplomas and advanced certification programs from internationally recognised institutions.
Types of Education Loans for Diploma Courses Abroad
1. Secured Education Loans (With Collateral)
Secured loans require collateral such as property, fixed deposits, or insurance policies and offer the most favourable terms for diploma financing.
Key Features:
- Loan Amount: Up to INR 1.5-2 crores, depending on collateral value
- Interest Rates: Starting from 8.25% to 10.50% per annum
- Repayment Period: Up to 15 years
- Processing Time: 15-30 days
- Margin Money: 5-15% of total course cost
Best For: Students with available collateral seeking maximum loan amounts and lowest interest rates
2. Unsecured Education Loans (Without Collateral)
Overseas education loans without collateral options are available for diploma courses, especially from top-ranked institutions.
Key Features:
- Loan Amount: Up to INR 40-75 lakhs
- Interest Rates: Starting from 10.50% to 14% per annum
- Processing Time: 7-15 days (faster approval)
- Co-applicant Required: Financially stable parent/guardian
- No Property Risk: Family assets remain secure
Best For: Students admitted to reputed institutions without immediate collateral availability
3. Government Education Loan Schemes
Government education loans for abroad study include special schemes with interest subsidies for eligible students.
Available Schemes:
- Vidya Lakshmi Portal: Central platform connecting students with multiple lenders
- CSIS Scheme: Interest subsidy for families earning below INR 4.5 lakhs annually
- State-Specific Schemes: Various state governments offer special education loan benefits
Best Education Loan for Abroad Studies in India (Diploma Programs)
Here's a detailed comparison of top lenders offering education loans for diploma courses abroad:
|
Lender |
Loan Type |
Maximum Amount |
Interest Rate |
Processing Time |
|
State Bank of India (SBI) |
Secured/Unsecured |
₹1.5 Cr / ₹50 L |
Starting from 9.65% p.a. |
20-30 days |
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Punjab National Bank (PNB) |
Secured |
₹2 Crores |
Starting from 9.25% p.a. |
20-25 days |
|
Bank of Baroda |
Secured/Unsecured |
₹2 Crores |
Starting from 8.85% p.a. |
15-25 days |
|
Bank of India |
Secured/Unsecured |
₹1.5 Crores |
Starting from 8.25% p.a. |
20-30 days |
|
Union Bank of India |
Secured/Unsecured |
₹1.5 Crores |
Starting from 9.10% p.a. |
20-28 days |
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HDFC Credila |
Unsecured |
₹75 Lakhs |
Starting from 11.25% p.a. |
10-15 days |
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Axis Bank |
Unsecured |
₹75 Lakhs |
Repo Rate Linked |
10-12 days |
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Avanse Financial |
Unsecured |
₹60 Lakhs |
Starting from 11.50% p.a. |
7-12 days |
|
ICICI Bank |
Secured/Unsecured |
₹1 Crore |
Starting from 10.50% p.a. |
12-18 days |
|
Auxilo Finserve |
Unsecured |
₹60 Lakhs |
Starting from 12% p.a. |
7-10 days |
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Propelld |
Unsecured |
₹50 Lakhs |
Starting from 12% p.a. |
7-10 days |
Note: Female students typically receive a 0.5% interest rate concession from most public-sector banks. Interest rates are indicative and vary based on applicant profile, course, and institution.
Popular Diploma Courses Covered Under Education Loans
Indian lenders typically approve education loans for these diploma programs:
|
Field / Discipline |
Program Name |
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Business & Management |
Postgraduate Diploma in Business Management |
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Diploma in International Business |
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Advanced Diploma in Marketing and Sales |
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Technology & IT |
Diploma in Software Development |
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Advanced Diploma in Cybersecurity |
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Diploma in Data Analytics and AI |
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Hospitality & Culinary Arts |
Diploma in Hotel Management |
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Advanced Diploma in Culinary Arts |
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Tourism and Event Management Diplomas |
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Healthcare |
Diploma in Nursing |
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Postgraduate Diploma in Public Health |
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Healthcare Administration Diplomas |
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Creative Arts & Design |
Diploma in Graphic Design |
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Fashion Design and Merchandising |
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Film and Media Production Diplomas |
Education Loan for Abroad Eligibility
Student Eligibility:
- Citizenship: Must be an Indian national
- Age: 18-35 years (parent/guardian as co-applicant if under 18)
- Academic Qualification: Completed 10th standard minimum (for diploma entry)
- Some advanced diplomas require 12th or graduation completion
- Admission Confirmation: Offer letter from a recognised institution abroad
- Course Duration: Minimum 6 months to 3 years
- Institution Recognition: The college/university should be recognised by the relevant authorities
Co-applicant Requirements:
- Parent, spouse, sibling, or legal guardian
- Stable income source (minimum INR 3-5 lakhs annually for unsecured loans)
- Good credit score (above 650 preferred)
- Age: Should not exceed 60 years at loan maturity
How Can I Get an Education Loan for Studying Abroad (Diploma)?
Step 1: Course and Institution Selection
Research and finalise your diploma program. Ensure the institution is:
- Recognised by the country's education authority
- On the approved list of your chosen lender
- Offers good placement opportunities
Step 2: Calculate Total Financial Requirement
Create a comprehensive budget including:
- Tuition fees for the entire course duration
- Accommodation costs (on-campus or off-campus)
- Living expenses (food, transportation, utilities)
- Travel expenses (flight tickets, visa fees)
- Health insurance
- Study materials and equipment
- Miscellaneous expenses (buffer 10-15%)
Step 3: Check Loan Eligibility
Before applying:
- Verify your academic eligibility
- Check co-applicant's income and credit score
- Assess collateral availability (if opting for secured loan)
- Confirm institution is on lender's approved list
Step 4: Compare Lenders
Use these criteria for comparison:
- Interest rates (fixed vs. floating)
- Maximum loan amount offered
- Processing fees and charges
- Moratorium period duration
- Repayment tenure options
- Approval and disbursement timelines
- Customer service quality
Recommended: Apply through the Vidya Lakshmi Portal to compare multiple banks simultaneously
Step 5: Gather Required Documents
Step 6: Submit Application
- Online: Through the bank website or the Vidya Lakshmi Portal
- Offline: Visit the nearest bank branch with complete documentation
- Through Aggregators: Use education loan platforms like GyanDhan, Credenc
Step 7: Loan Processing
The lender will:
- Verify all submitted documents
- Assess the creditworthiness of the co-applicant
- Conduct property valuation (for secured loans)
- Check institution credentials
- Evaluate course viability and career prospects
Processing Time:
- PSU Banks: 20-30 days
- Private Banks: 12-18 days
- NBFCs: 7-15 days
Step 8: Loan Sanction
Once approved, you'll receive:
- Sanction letter with terms and conditions
- Loan amount breakdown
- Interest rate details
- Repayment schedule
- Disbursement process
Review carefully before signing the loan agreement
Step 9: Loan Disbursement
Disbursement typically happens in stages:
- Stage 1: Pre-admission fees (if applicable)
- Stage 2: First semester/year tuition fees
- Stage 3: Subsequent instalments as per the fee schedule
- Living Expenses: Quarterly or semester-wise disbursement
Funds are transferred directly to the institution account or the student's foreign bank account.
Documents Checklist for Quick Loan Approval
Essential Documents
Student
- Offer/admission letter & fee structure
- Academic transcripts (10th, 12th, degree if any)
- Passport, PAN, Aadhaar
- Photos & address proof
Co-applicant
- Salary slips (6 months) / ITRs (2 years)
- Bank statements (6–12 months)
- Employment letter/business proof
- PAN, Aadhaar & address proof
Financial
- Savings/fund proof
- Scholarship letters (if any)
- Property / FD documents (for secured loans)
- Assets & liabilities statement
Course-related
- Course syllabus
- Institution accreditation proof
- Visa receipt (if applied)
- Entrance exam scores (if required)
Education Loan Coverage for Diploma Courses
|
Expense Category |
Included Costs |
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Tuition and Academic Fees |
• Full course tuition fees • Registration and admission fees • Examination fees • Library and laboratory fees • Mandatory course materials |
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Living Expenses |
• Accommodation (hostel/rent) • Food and groceries • Local transportation • Utilities (electricity, internet, phone) |
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Travel Costs |
• Return airfare (economy class) • Visa application fees • Travel insurance |
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Additional Expenses |
• Health/medical insurance (mandatory in most countries) • Study materials and equipment • Laptop/computer (reasonable limits) • Caution deposit / refundable fees |
Note: Personal expenses, entertainment, and luxury items are typically not covered
Why Diploma Courses Are Loan-Eligible?
Diploma courses from reputed institutions abroad are increasingly recognised by Indian lenders because:
- Career-Oriented: Focus on practical skills and industry-specific knowledge
- Shorter Duration: Typically, 1-2 years, reducing overall education costs
- High ROI: Strong placement opportunities and salary prospects
- Pathway Programs: Many serve as bridges to degree programs
- Industry Recognition: Globally accepted certifications in fields like hospitality, IT, healthcare, and business
Tax Benefits on Education Loans: Section 80E Deductions
- Deduction Amount: 100% of interest paid (no upper limit)
- Benefit Period: Up to 8 years from first repayment
- Eligible Borrower: Individual (student, parent, or legal guardian)
- Coverage: Interest component only (not principal)
- Course Eligibility: Any diploma/degree for higher education
How It Works:
If you pay INR 1 lakh as interest in a financial year, your taxable income reduces by INR 1 lakh, saving approximately INR 30,000 in taxes (30% tax bracket).
Important: Maintain all loan payment receipts for tax filing
Country-Wise Diploma Loan Considerations
|
Country |
Key Highlights |
Typical Loan Amount |
Avg. Course Cost / Year |
Living Expenses / Year |
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Canada |
High loan approval, PGWP, PR pathway |
₹20–40 lakhs |
CAD 12,000–20,000 |
CAD 10,000–15,000 |
|
Australia |
VET diploma programs, strong work rights |
₹25–45 lakhs |
AUD 15,000–25,000 |
AUD 21,000+ |
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United Kingdom |
Business, Hospitality, IT diplomas |
₹20–35 lakhs |
GBP 10,000–18,000 |
Included in visa funds |
|
United States |
Diplomas are less common; Associate degrees |
₹30–50 lakhs |
USD 15,000–30,000 |
Varies by state |
Loan Repayment, and Moratorium Period
Understanding Moratorium Period
The moratorium is a grace period where you don't repay the principal amount:
|
Aspect |
Details |
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What is a Moratorium? |
A grace period during which you are not required to repay the principal amount |
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Moratorium Duration |
• Full course period (entire diploma duration) • + 6–12 months after course completion • OR 6 months after employment, whichever is earlier |
|
Repayment During Moratorium |
Option 1: Pay only simple interest monthly. Option 2: Pay partial interest. Option 3: No payment (interest gets capitalised into principal) |
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Best Practice Tip |
Paying interest during the moratorium reduces the total repayment burden. |
Important: Choosing Option 3 increases the total repayment amount significantly
Repayment Period
|
Category |
Details |
|
Standard Repayment Tenure |
• 5–15 years after the moratorium period |
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Shorter Courses |
• 1-year diplomas: 5–10 years repayment |
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Longer Courses |
• 2–3 year diplomas: 10–15 years repayment |
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EMI Calculation Factors |
• Final loan amount (principal + capitalized interest) • Interest rate applied • Repayment tenure chosen • Prepayments made during the course |
Prepayment Options
|
Aspect |
Details |
|
Benefits of Prepayment |
• No prepayment penalties on education loans • Reduces total interest burden • Improves credit score |
|
When to Prepay |
• After securing a part-time job during studies • Using scholarship or assistantship funds • Upon getting full-time employment • Using any windfall income |
Cheapest Education Loan for Abroad Studies: How to Get the Lowest Interest Rates
1. Choose Public Sector Banks
Bank of India, Punjab National Bank, and Bank of Baroda consistently offer the lowest interest rates on secured loans, ranging from 8.25% to 9.25% p.a.
2. Provide Strong Collateral
Secured loans always come with interest rates 1-3% lower than unsecured options.
3. Maintain Excellent Credit Score
A co-applicant with a credit score above 750 can help negotiate better rates.
4. Apply for Government Schemes
Check eligibility for:
- Central Sector Interest Subsidy (CSIS) Scheme
- State government education loan schemes
- Minority community schemes (if applicable)
5. Negotiate with Multiple Lenders
Get loan offers from 3-4 banks and negotiate for:
- Lower processing fees
- Reduced interest rates
- Better repayment terms
6. Choose Top-Ranked Institutions
Many banks offer preferential rates (0.25-0.50% lower) for:
- QS Top 500 universities
- Government-affiliated colleges
- Institutions with strong placement records
7. Opt for Female Applicant
Most PSU banks offer a 0.5% interest rate concession to female students.
Common Loan Rejection Reasons (and Fixes)
- Unapproved institution → Check the bank list before admission
- Low co-applicant credit score → Improve score or add co-applicant
- Insufficient income proof → Ensure ₹3–6 lakh+ annual income
- Low-ROI / unrecognised course → Prefer IT, Healthcare, Business, Engineering
- Incomplete documents → Submit the full checklist together
- No collateral (high loan) → Opt unsecured / reduce amount
- Past loan defaults → Clear dues before applying
Conclusion: Making Your Diploma Abroad Dream Affordable
Education loans for a diploma course abroad are not just possible; they're increasingly accessible for Indian students. With interest rates starting from 8.25% per annum for secured loans and comprehensive unsecured loan options up to INR 75 lakhs, financing your international diploma education has never been easier.
Start your loan application today and take the first step toward your international education journey. Your diploma abroad awaits. Don't let financing hold you back!
Disclaimer: Interest rates and loan terms are indicative and subject to change based on lender policies, market conditions, and applicant profile. Always verify current rates directly with lenders before applying. This guide is for informational purposes only and does not constitute financial advice. Consult with financial advisors for personalised guidance.
