Education Loan for MBBS Abroad: Cost, Eligibility, Application Process & More

Have you noticed the rise in the number of students aspiring to pursue a Bachelor of Medicine & Bachelor of Surgery (MBBS) degree abroad? The trend has become increasingly evident in recent years, with thousands of Indian students moving to Asian and European countries like Afghanistan, Bangladesh, Bhutan, China, Cyprus, Kazakhstan, Malaysia, Malta, Maldives, Nepal, Philippines, Russia, Sri Lanka, Uzbekistan, UAE, Vietnam, Hong Kong, Japan & South Korea to pursue medical education. According to recent data, the number of Indian students opting for medicine overseas has surged by over 25% in the past five years. This is due to limited seats and immense competition for medical education in India.

Let us explore other reasons for this surge.

Why Indians Aim to Pursue MBBS Abroad?

According to the Health Ministry's 2023-24 report, India has approximately 108,940 MBBS seats across its medical colleges. However, with around 2 million candidates competing annually for a spot through the National Eligibility cum Entrance Test (NEET), the competition is intense. Additionally, the total cost of MBBS degree at the private medical colleges in India is on the higher side. Although the cost of pursuing MBBS abroad may also cost the same or higher, the prospect of getting admits in foreign universities is better. Studying abroad also offers exposure to diverse medical practices and opens doors to global opportunities that can shape a promising career. Thus, many aspiring doctors look beyond national borders to fulfil their dreams.

Having understood the reasons behind changing trends of pursuing MBBS abroad, let's now delve deeper into the cost of pursuing MBBS abroad.

Cost of Pursuing MBBS Abroad

On an average, the total cost of pursuing a 5–6-year MBBS Degree falls in the bracket of INR 20 Lakhs to INR 70 Lakhs, depending on the study abroad destination.

This cost includes:

Tuition Fees,
Living Expenses,
Health Insurance,
Travel, and
Study Materials

Now that we know the total cost of a medical degree, it’s time to understand how an Education Loan for MBBS Abroad can be a pivotal step in funding your journey ahead.

Overseas Education Loan for MBBS Abroad

Nationalized Banks, Private Banks and NBFCs offer Secured and Unsecured Overseas Education Loan to fund an MBBS Degree at an International University. Here’s an overview of these two loan options to help you choose the right one based on the loan amount you are looking for:

Particulars

Secured Education Loan

Unsecured Education Loan

Range of Loan Amount

The bank loan limit is of INR 1.5 Crores and the loan amount solely depends on the valuation of the pledged assets and the financial institution.

Nationalized Banks offer an unsecured education loan of around INR 7.5 Lakhs.

Only in rare cases, private banks and NBFCs offer an unsecured education loan provided the ITR of the co-applicant is more than INR 15-20 Lakhs, with no liability.

Expenses Covered

Tuition Fees, Living Expenses, Health Insurance, Visa Fees, Air Ticket, other expenses related to studies like books, laptops, course equipments, project work, study tours etc.

Interest Rate

10%-12%

12-13%

Assets Required

A Secured Education Loan requires students to provide tangible or intangible assets as collateral against the loan amount.

These assets can include property in an urban area, fixed deposits, or other valuable assets.

An Unsecured Education Loan is the one where student is not required to pledge any security against the loan amount.

Documentation

Specific documentation is necessary for property used as security, such as the original sale deed, the sanctioned layout map, building plans, and recent tax receipts. It must also include any agreements to sale, previous owner sale deeds, a 3-month mutation copy, and an electricity bill.

PAN Card & Passport, Proof of Residency like Bank Account Statement, Passport of the Applicant, Electricity Bill, Aadhar Card, 6-Months Bank Account Statement of the co-signer holding the salary or personal account.

Moratorium Period

6-12 months after which the EMI begins.

In case of unsecured loans, students are not offered a moratorium period, and direct EMI is applicable with less liability.

Why no Moratorium Period for Unsecured Loans?

There is no moratorium period for unsecured overseas education loan for MBBS abroad because of the risk factors involved.

The financial institution sanctioning the loan has six years of waiting period before the repayment begins. Additionally, upon returning to India, you will be required to appear for the Medical Council of India (MCI) screening test, also known as the EXIT test, to practice medicine in India. The MCI screening test is said to be more challenging than the NEET exam, with only about 10%-20% of students managing to pass. So, the financial institutions do not wish to take any such risk.

Now that you have learnt about various parameters of secured and unsecured overseas education loans, you would want to know whether you are eligible for an overseas education loan for MBBS abroad or not. Find it out in the next section!

Education Loan for MBBS Abroad - Eligibility Criteria

To be eligible for an education loan for MBBS abroad, here’s the criteria you should meet.

Academic Performance: Should have passed 10 + 2 from a recognized board with an aggregate of 50% in PCB subjects.
Age Requirement: The age criteria of the student must be 17 years or older as of 31st December in the admission year.
Entrance Exams: Should have qualified for the NEET UG Exam and should have a valid NEET scorecard.
Collateral: For secured loans, suitable collateral must be provided.

The next step is to ensure that your university is in the List shared by the Medical Council of India (MCI). Let us now understand the steps to apply for an overseas education loan.

Steps to Apply for an Education Loan for MBBS Abroad

The financial lenders, including Nationalized Banks, Private Banks, NBFCs and International Lenders, offer secured overseas education loans to fund an MBBS abroad. Mentioned below is the step-by-step process.

Research Loan Providers: Identify financial institutions offering study abroad loans for MBBS Abroad and conduct thorough research to find out which one is the best based on the profile of the student. Some popular financial institutions include the Bank of Baroda, State Bank of India, HDFC Credila, Axis Bank, Avanse, MPower Financing, etc.
Check Eligibility Criteria: Review the education loan eligibility criteria set by different lenders and ensure that the study destination and the university are listed under the MCI list and the bank list.
Calculate Education Loan Amount: Calculate the total cost of your MBBS Degree, including tuition fees, living expenses, travel, health insurance and any other associated costs.
Select a Co-Signer: In case of an unsecured overseas education loan, lenders require a co-signer. So, ensure your co-signer has a stable income and a credit score above 650.
Prepare Required Documentation: The next step is to gather all the necessary documents required for an overseas education loan, including:
> A University Offer Letter,
> Proof of Identity & Residence,
> Academic Transcripts,
> Standardized Test Scores,
> A Valid Passport,
> Visa Details,
> Pan Card,
> Income Proof of the Co-Signer and
> Recent Bank Statements of the Guarantor, Co-Borrower, or the Applicant
Apply for the Loan: Complete the loan application form provided by the chosen lender and submit it with all the required documents.
Wait for Approval: Based on the academic and financial profile, the lender will assess your application and determine whether you are eligible. This process usually takes 2-3 weeks.
Accept the Loan Offer: Once the loan application is approved, you must carefully review the terms and conditions before accepting the offer. Once received, the funds will be disbursed directly to the educational institution or your account, depending on the lender's policies.

To better understand the potential hurdles in securing an overseas education loan for an MBBS degree abroad, it's crucial to recognize the factors that might lead to loan rejections. So, let’s have a look at that.

Factors Leading to Loan Rejection

Listed below are some of the common reasons for rejection that students should keep in mind while applying for an education loan for MBBS abroad.

Property Not Acceptable: If the property offered as collateral does not meet the bank's requirements.
Low Income for Unsecured Loans: Insufficient income to qualify for unsecured education loans.
Country not listed in the Bank list: Banks have a separate list of counties for which they provide overseas education loan. Students should ensure that the country they want to study in is listed with the Bank.
CIBIL Issues of Parents: Poor credit scores of parents can lead to rejection of both secured and unsecured loans.
COA Not Provided: Many European countries do not include the Cost of Attendance (COA) in the offer letter, leading to reliance on budget sheets from MBBS consultants, which banks often do not accept.

So, ensure that you do not give any such reasons to the financial institution to reject your loan application.

With this you’ve got all the required information to avail an overseas education loan for MBBS abroad. At Élan Overseas Education Loans, we understand the significant financial commitment to pursuing higher studies abroad. As such, our team of experts is dedicated to assisting students in securing the best education loan in India for study abroad. They are here to guide through the complexities of the process, providing complete support in acquiring the loan.

So, contact us today and start your journey towards an MBBS abroad.