how to get a student travel loan?
a student travel loan is not a distinct product. it is a component of an education loan, designed to cover travel expenses associated with studying abroad or within India. banks and NBFCs include travel costs as part of the overall education loan, covering one-way airfare, visa fees, and related travel expenses.
the term "student travel loan" is sometimes used loosely to refer to a personal loan taken for travel purposes. a personal loan for travel carries higher interest rates, shorter tenures, and no tax benefits. the appropriate route is an education loan that includes travel as a covered expense.
what an education loan covers
an education loan is not restricted to tuition fees. it covers hostel charges, travel expenses, library fees, books, and living costs when studying abroad. most banks and non-banking financial companies (NBFCs) offer loans for higher studies within India and overseas, allowing the student to choose the course and university without worrying about every expense.
travel expenses covered include:
- one-way economy airfare to the study destination
- visa fees and related documentation costs
- travel between the university and accommodation
- initial travel for admission and course commencement
banks like South Indian Bank, SBI, and Bank of India explicitly include travel expenses or passage money as part of the education loan coverage.
education loan vs personal loan for travel
the difference in cost and structure is significant. education loans are designed for students and come with lower interest rates, longer tenures, moratorium periods, and tax benefits. personal loans are designed for working individuals and carry higher costs.
| feature | education loan (with travel coverage) | personal loan for travel |
|---|---|---|
| interest rate | 8% to 13% per annum | 10.5% to 21% per annum |
| repayment tenure | up to 15 years | 1 to 5 years |
| moratorium period | course duration + 6 to 12 months | no moratorium, EMI starts immediately |
| tax benefit | section 80E deduction on interest | no tax benefit |
| collateral | required for larger loans, but CGFSEL covers up to ₹7.5 lakh without collateral | unsecured, but lower amounts |
a personal loan for travel is processed faster and requires no collateral. but the higher interest and shorter repayment period make it costlier. education loans offer better terms but take longer to process.
eligibility criteria for an education loan
admission to a recognised institution, whether in India or abroad, is the first requirement. the applicant must be an Indian citizen, typically between 18 and 35 years of age. a co-applicant, usually a parent or guardian, is required to share the repayment responsibility. collateral may be required for larger loans, though the credit guarantee fund scheme for education loans (CGFSEL) provides coverage for loans up to ₹7.5 lakh without collateral.
approval chances improve with a strong academic record. the co-applicant's income stability carries significant weight in the lender's decision.
how to apply
the application process is similar across banks and can be completed online or offline.
step 1: secure admission. the admission letter from the university is required before applying.
step 2: check eligibility. confirm that the course, institution, and student profile meet the lender's criteria.
step 3: gather documents. identity proof (Aadhaar, permanent account number (PAN)), address proof, academic records, admission letter, income proof of co-applicant, and property documents (if collateral is needed).
step 4: apply. submit the application online through the bank's portal or visit a branch. the vidya lakshmi portal allows comparing and applying to multiple banks through a single form.
step 5: verification and approval. the bank verifies the documents, evaluates the co-applicant's income, and assesses the collateral (if applicable). approval can take 5 to 7 days for unsecured loans and 2 to 3 weeks with collateral.
step 6: disbursement. funds are disbursed directly to the university or to the student's account for living and travel expenses.
factors to check before applying
read the key fact statement. RBI requires lenders to provide a key fact statement showing the annual percentage rate (APR) and all charges upfront. the upfront fees range from ₹10,000 plus goods and services tax (GST) for some banks.
verify RBI registration. check that the lending partner is an RBI-registered bank or NBFC.
compare interest rates. public banks like SBI offer lower rates starting at 8.4%, while NBFCS like Avanse offer faster processing at 11% to 13.5%.
check the moratorium period. SBI offers course period plus one year. most lenders offer course duration plus 6 to 12 months.
confirm travel coverage. not all education loans explicitly mention travel costs. asking the lender whether one-way airfare and visa fees are included is advisable.
frequently asked questions
1. can a personal loan be taken for travel to study abroad?
a personal loan is possible but more expensive, since personal loans carry higher interest rates, shorter tenures, and no tax benefits. an education loan that covers travel is the better option.
2. does an education loan cover airfare?
most banks include one-way economy airfare as part of the education loan. Bank of India explicitly covers "travel expenses or passage money (one-way fare)." South Indian Bank and Avanse also include travel costs.
3. what is the minimum CIBIL score for a student travel loan?
the student's credit score is not the primary factor. lenders evaluate the co-applicant's income and creditworthiness. the co-applicant, usually a parent or guardian, should have a stable income and a good credit history.
4. how long does a student travel loan take to get approved?
approval can take 5 to 7 days for unsecured loans and 2 to 3 weeks if collateral is involved. starting the application 3 to 4 months before the visa appointment is advisable.
5. can an education loan be obtained without collateral for travel expenses?
under the credit guarantee fund scheme for education loans (CGFSEL), students from households earning below ₹4.5 lakh a year can borrow up to ₹7.5 lakh without collateral. SBI also offers collateral-free loans up to ₹50 lakh for premier institutions under its global ed-vantage scheme.
