PNB Udaan Student Loan for Study Abroad: Complete Guide

Heading outside of India to study can be an exciting adventure, but it also can cost a lot. Punjab National Bank offers PNB Udaan Education Loan to help make the payments easier for Indian students who want to go abroad for further studies. Learn more about how this loan works, what you need to be eligible, and how to apply.

📝 Your Complete Guide to PNB Study Abroad Loan

PNB Udaan Education Loan Scheme for Study Abroad Eligible Courses Covered Expenses Requirements for PNB Study Abroad Loan Student Eligibility Collateral Security Upfront Payment Interest Rates for PNB Study Abroad Loan Repayments Terms for PNB Study Abroad Loan How to Apply for PNB Study Abroad Loan Applying Online Apply In Person Documents Required Punjab National Bank Loan Disbursal Process Save with international remittance when you choose Wise

About PNB Udaan Education Loan Scheme

Punjab National Bank offers the PNB Udaan education loan scheme to Indian students who wish to study abroad.

Eligible Courses and Colleges under PNB Study Abroad Loan

This loan is specifically for students accepted for eligible post-secondary studies:¹

• Graduation courses, including job-oriented professional and technical courses offered by reputed universities.
• Post-graduation courses like MCA, MBA, and MS.
• Professional courses offered by institutions such as CIMA (in London) and CPA (in the US).
• Specialized degree and diploma courses such as shipping, pilot training, aeronautical, etc., recognized by the competent regulatory bodies abroad that make students eligible for employment abroad.
• Other courses, as defined under different Government Subsidy Schemes.

PNB Udaan may also be available to support other non-specialized accredited diploma and degree courses, with eligibility contingent on the collateral offered. Check out the section later on in the article about how collateral works.

Expenses covered under PNB Study Abroad Loan

The PNB Udaan can cover the following expenses for Indian international students:¹

• Tuition fees.
• Hostel fees and expenses.
• Examination, library, and laboratory fees.
• One-way travel expenses to the university or institute.
• Life Insurance premium for the student.
• Refundable deposits, with receipt, as required by the institute.
• Cost of books, equipment, uniforms, and instruments needed for the course.
• Computer (within a reasonable price range), if essential for the entire course.
• Other education-related expenses to cover costs of project work, thesis, and study tours.

Requirements to Apply for PNB Study Abroad Loan

In addition to being accepted into one of the eligible courses, there are additional requirements for a student, or their family, to apply for the loan.

Student Eligibility

Here are the eligibility requirements for PNB Udaan:¹

• Resident of India. The loan is only available for resident Indians. Foreign citizens, NRIs, or OCIs are not eligible to apply. OCIs can consider the PNB Pravasi Shiksha Loan² for higher studies in India.

• Educational Qualifications. The prerequisite qualifications depend on the course you intend to pursue for your study abroad.

1. Applicants for Graduation and Diploma courses must have completed their high school studies (10 plus 2 or equivalent).
2. Applicants for Post-Graduate courses must hold a bachelor's degree from an Indian university (10 plus 2 plus 3 or 10 plus 2 plus 4).

• Acceptance from University. Before applying for the PNB Udaan Loan, it is necessary to have already gained admission to an eligible course at a foreign university.

Collateral security for the loan

You may be required to put up a portion or the entire loan amount as collateral for an education loan. The collateral requirements for PNB Udaan are as follows:

• For loans up to INR 7.50 lakhs, no collateral is required as long as the parents or guardians are co-borrowers on the loan application.
• For loans above INR 7.50 lakhs, tangible collateral of suitable or the exact value is required as the loan. Parents or guardians are required to be joint borrowers on the application.
• For foreign diploma or certificate courses besides the listed eligible courses, collateral of 125% of the loan amount is required. Parents or guardians, if the applicant, must also sign on as joint borrowers.

The collateral must be liquid and can include LIC policies or fixed deposits. If you are unable to provide any tangible assets as collateral security during the loan application, you can also assign your future employment income to the bank to secure the repayment of the education loan.

💡 What is collateral security?
Collateral security, sometimes just written as collateral, is an asset with a value - like an account or real estate- provided to the bank as surety for a loan. This helps reduce the risk the bank takes on when they give you a loan. The one catch is that if you don't repay the loan, the bank can take the collateral.

Upfront Payment

You will be asked to provide an upfront payment as part of your loan application process. Here is what to expect:²

Loan Processing Charges
The processing fee is 1% of the loan amount, with a minimum charge of INR 10,000. This amount is refundable after the first disbursement of the loan.

Margin
PNB Udaan requires no margin for loans up to INR 4 lakhs. For loans above INR 4 lakhs, a margin of 15% of the loan amount is required. Any scholarships or assistance provided externally can also be included in the margin, and applicants are allowed to deposit a margin amount annually on a pro-rata basis based on the loan disbursal schedule.

Documentation Charges
There are no documentation charges for PNB Study Loan Abroad. However, for loans that are secured by real estate or immovable property as collateral, there is an inspection charge of INR 250 plus GST once every three years.

Interest Rates for PNB Study Abroad Loan

PNB Udaan interest rates are determined by adding the bank's Repo Linked Lending Rates (RLLR), Basic Spread (BSP), plus an additional premium depending on the loan product and other market factors.³

Loan Amount	Effective Rate of Interest*
Up to INR 7.50 lakhs	11.25%
Above INR 7.50 lakhs	11.25%
Loans, irrespective of the amount with 100% or higher collateral	10.50%

*Rates retrieved on May 25, 2023.
Please verify the latest rates from Punjab National Bank website.

Punjab National Bank offers an additional concession of 0.5% on the interest rate to female applicants.³

💸 Income Tax Benefit
Under Section 80E of the Income Tax Act⁴, borrowers can get deductions on interest repayments of education loans without any ceiling on the deduction amount. The deduction can only be claimed for the interest paid in the year the income tax is filed.

Repayments Terms for PNB Study Abroad Loan

PNB offers a moratorium (a grace period where no repayments are required) that covers the duration of the course plus 1 year. The repayment period starts after the moratorium and extends to a maximum of 15 years.¹

How to apply for PNB Study Abroad Loan

You can apply for the PNB Udaan loan online, at a PNB branch, or start the process over the phone.

Applying Online through the Vidya Lakshmi portal

1. Start the online application through the Vidya Lakshmi portal.⁴
2. Complete the single application form and select Punjab National Bank as the financial partner.
3. Complete the necessary details.
4. Submit the supporting documents.

Apply In Person at the PNB branch

Students can directly approach their respective PNB branches and consult the credit officer who will help them apply for PNB Udaan.

Documents Necessary for PNB Study Abroad Loan

Here are the documents you will need to submit for PNB Udaan:

1. KYC documents of all borrowers, including parents and guardians.
2. Income documents and statements of assets and liabilities of the co-borrowers parents and guardians.
3. Educational qualifications (marksheets and certificates) of the student from Standard X.
4. Admission confirmation letter from the university abroad
5. Documents that have the course details and fee structure.
6. Other documents as required by the bank, like fee receipts for fees already paid, computer quotation, air ticket if already purchased, etc.

📞 Punjab National Bank Contact Phone Numbers
Customers in India can contact the following toll-free numbers to learn more about PNB Udaan Education Loan for Study Abroad¹ 1800 1800 1800 2021 1800 180 2222 1800 103 2222 Customers outside India can call PNB at +91 120 2490000 for further details.

Punjab National Bank Loan Disbursal Process

PNB Udaan typically disburses or pays out the loan money as needed directly to the university. Students must provide the tuition and other expense payment schedules at the time of the application so that the payments are not delayed.

PNB allows reimbursement of fees already paid to the university under specific terms and conditions, including evidence of an original university expense receipt. PNB can then credit the student's account with the reimbursed amount.

You'll also need to arrange a savings account at PNB Bank to facilitate the margin money and other application-related transactions.

While the tuition fee is directly disbursed to the university, the living expenses are credited to the student's account. The bank can provide the student with a travel card that enables them to make foreign transactions, or the amount can also be credited to the account, depending on the student's preference.

Save with international remittance when you choose Wise

It can be hard to manage all the things you need to do before leaving India to study. Make international payments easier with Wise, which uses smart tech to make money transfers from India safe, secure - and cheap.

Wise can help you save⁵ when sending money to bank accounts abroad. You can save money on international transfers with Wise’s low transfer fee and the mid-market exchange rate, which is the same as the one you see on Google. So make university payments or living expenses a breeze when you use Wise to send money abroad from India.

And 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.

Please see the Terms and Conditions for your region and visit our pricing page for the most up-to-date pricing and fee information on Wise products.

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Sources used for this article:

1. PNB Udaan
2. PNB Pravasi Shiksha Loan
3. PNB Service Charges Related To Retail Advances
4. Income Tax deduction under Section 80E of the IT Act 1961
5. Price Comparison for sending money abroad from India

Sources verified on May 25, 2023.
Cover photo by Paulina B on Unsplash.