Union Bank of India: Education Loan for Study Abroad

Union Bank of India is one of several Indian banks that offer education loans to help Indian students pay for the expense of attending university overseas. The bank provides two different kinds of loans for studying outside of India:

• Education Loan for Study in India/Abroad/NRI Students¹
• Special Education Loan Schemes for Premier Institute Abroad Studies²

Read on to learn more about how these Union Bank of India loans work, what is required to apply, and the expected interest rates.

Eligible Courses and Colleges

Union Bank Education Loan for Study Abroad is available for graduation and post-graduation degrees from recognized foreign universities.¹ The loan also covers specialised certificate courses such as CIMA (from London), CPA (from the US), and Ph.D. programs. Other courses, such as diploma programs, are not eligible for this loan.

The Special Union Education Loan Schemes for Premier Institute Abroad Studies is exclusively for students who have received acceptance from one of the premier foreign institutes shortlisted by the Union Bank.² It covers courses in management, STEM, medical and other programs like law, arts, economics, performing arts, and design. This scheme offers loans up to INR 1.5 lakhs, with no collateral required for loans up to INR 40 lakhs.

Expenses Covered

Study-abroad education loans offered by the Union Bank cover the following expenses:

• Tuition fees.
• Hostel, mess, and general boarding expenses.
• Examination, Library, and Laboratory fees.
• Insurance premium for the student.
• Refundable deposits, as required by the university (and supported by original receipts).
• Purchase of books, equipment, instruments, and uniforms.
• Computer or laptop, if essential for the course.
• One-way travel to the university.
• Other course-related expenses such as study tours, project work, and thesis.

Requirements to Apply for Union Bank Education Loan

Union Bank of India has specific prerequisites for international education loans that differ from domestic ones. Read through the requirements for each type of loan to find the best fit for you.

Student Eligibility

• Nationality: Union Bank education loans are only available to Indian nationals.

• Qualifications: Applicants must have completed their high school education before applying for the education loan. In addition, students pursuing a postgraduate program must have completed their undergraduate degree and other qualifications required by the premium institution abroad.

• Admission Letter: To apply for a study abroad loan, applicants must first be accepted into the program offered by the foreign university.

• Co-applicant: Loan application must be co-signed by the student's spouse, parent, guardian, or in-laws who are Indian nationals.

Collateral Security

The loan application requires you to provide a collateral asset to guarantee the loan. The collateral can be a deposit account, an investment, or real estate of the same value as the required collateral. In addition to the collateral requirements outlined below, the applicant is required to have life insurance covering the loan amount in the bank's favour.

Collateral Requirement for Union Bank Education Loan for Study Abroad¹
Eligible applicants can use the Credit Guarantee Fund Scheme for Education Loan (CGFSEL)³ to help provide collateral under this scheme.

Collateral Requirement for Special Union Education Loan Scheme for Premier Institute Abroad Studies²
Under this scheme, providing additional collateral can help reduce your interest rate.

Upfront Payment

Union Bank of India Education Loan for Study Abroad has no loan processing fee and requires 15% of the loan amount as margin payment for loans above INR 4 lakhs.¹

Special Union Education Loan Scheme for Premier Institute Abroad Studies charges a loan processing fee of INR 5,000, which is refunded if the student avails the loan within 3 months from the date of sanction. A 15% of the loan amount as a margin payment is required for applying for the loan under this scheme.²

Interest Rates for Union Bank Study Abroad Loan

The effective rate of interest for education loans offered by the Union Bank of India depends on four different factors:³

• The type of loan.
• Whether the loan is covered under CGFSEL.
• The student’s gender.
• The value of the collateral offered.

The education loan interest rate is based on the Reserve Bank of India’s External Benchmark Lender Rate (ELBR). The Union Bank of India adds a premium on top of EBLR to calculate the effective rate of interest on the loan.

Rates for Union Bank Education Loan for Study Abroad - Covered under CGFSEL

Rates for Union Bank Education Loan for Study Abroad - Not covered under CGFSEL

Rates for Special Union Education Loan Scheme for Premier Institute Abroad Studies

Union Bank Study Abroad Loan Repayments Terms

Once your education loan is approved, you won’t need to start repayments until you have completed your course, plus an additional 12 months after. This grace period during which no repayments are required is called a moratorium. After the moratorium period ends, the bank will expect you to start making your monthly repayments on the loan.

Although you are not required to make any interest payments during the moratorium period, you can still choose to make payments and benefit from an interest rebate.

Union Bank of India offers a loan tenure of up to 15 years (180 months) for study-abroad educational loans.

How to Apply for Union Bank of India Study Abroad Loan

Union Bank of India accepts online applications for education loans through the Vidya Lakshmi portal. You can also visit the nearest bank branch and complete the loan application in person.

Apply Online through the Vidya Lakshmi Portal

• Register and enter your details on the Vidya Lakshmi Portal.
• Complete the simple application form, and select Union Bank of India as the loan provider.
• Choose the type of loan, and ensure it is for studying overseas.
• Provide the necessary details and upload the supporting documents.

Apply In Person through the local branches

Visit your nearest Union Bank of India branch⁶ and complete the loan with the help of a representative. Make sure to bring physical copies of the required documents, as outlined below.

Documents Required for the Union Bank of India Study Abroad Loan

• A complete application form.
• ID, address proof, and income information for all borrowers and co-applicants.
• Last 12 months' bank statements of all borrowers.
• Academic qualification with mark sheets and certificates of all cleared exams from Standard X onwards.
• Proof of admission to a foreign university, along with the payment schedule for the course.

Union Bank of India may request additional documents to support your application.

Union Bank Study Abroad Loan Disbursal Process

Generally, Union Bank of India takes a week to ten days to approve an education loan if the application is complete.

Union Bank of India disburses the loan funds directly to the university according to the provided payment schedule. You must have the pro-rata margin amount in the Union Bank Savings Account before the loan money can be paid out.

Any qualifying fees can be reimbursed by your loan as long as you can provide original receipts. The bank will remit the living expenses directly to the student’s overseas account whenever required.

Get started with Wise: the world’s most international account⁷

Starting a new course as an international student can come with many expenses. Once you arrive abroad for your studies, check out the Wise multi-currency account available for residents living in supported countries. Enjoy an account as worldly as you are and spend just like a local when you travel abroad with a linked debit card, while also paying less in fees.

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