Types of Education Loans for Studying in Australia

In general, International student loan Australia can be classified into two categories.

When planning to study in Australia, students typically have two main options for funding their education through loans: secured and unsecured education loans. Here’s a breakdown of both:

Secured Education Loan:
Also known as a loan with collateral, this type of loan requires the borrower to pledge an asset as security. The collateral can be in the form of real estate, fixed deposits (FDs), insurance policies, or other high-value assets. Since the loan is backed by security, lenders usually offer lower interest rates and higher loan amounts.

Unsecured Education Loan:
This is a loan without collateral, meaning the borrower doesn’t have to provide any asset as security. Due to the higher risk for the lender, these loans often come with higher interest rates. In most cases, a co-applicant or co-signer is required, and the loan amount is determined based on their income and creditworthiness, typically reviewed through agencies like CIBIL.

Secured education loan in Australia

Education Loan Options for Top Australian Universities

Let’s explore the loan options available to students planning to study in Australia, categorized into secured and unsecured education loans.

Secured Education Loans for Australia

Secured loans are primarily offered by public sector banks, which require collateral as a guarantee. Here’s a breakdown of the loan options provided by major public banks for studying at prominent Australian universities:

Unsecured Education Loans for Australia

Students who don’t have collateral can still apply for unsecured education loans through:

• Private banks such as Axis Bank, ICICI Bank, and IDFC FIRST Bank
• NBFCs including HDFC Credila, Avanse, Incred, and Auxilo
• International lenders like MPOWER Financing and Prodigy Finance

Here’s a comparison of the major unsecured loan providers:

Education Loans for Various Degrees in Australia

When planning to study in Australia, the type of course you pursue can significantly influence the loan amount, interest rate, repayment structure, and eligibility. Here’s a detailed look at education loan options across different degree levels:

How to Choose the Best Lender for Your Education Loan to Study in Australia?

With so many education loan options available—from public sector banks to private banks, NBFCs, and international lenders—it’s natural to wonder:

“Which lender is the right fit for me?”

The good news is, selecting the best lender doesn’t have to be overwhelming. By comparing a few key aspects, you can easily identify the one that aligns best with your academic, financial, and personal goals.

 Key Factors to Compare When Choosing a Lender:

1. Interest Rate: Lower interest rates reduce the overall repayment burden. Always check if the rate is fixed or floating.
2. Processing Fee & Time: Some lenders charge a fee to process your application. Consider how fast they disburse loans, especially if you’re close to deadlines.
3. Margin Money: This is the percentage of total expenses that you need to pay from your pocket. Lower margin money means less financial strain.
4. Moratorium Period: Check how much repayment flexibility is offered during your course and the post-study grace period.
5. Tax Benefits: Loans from approved banks (under Section 80E) can help you save on taxes for interest paid.
6. Loan Duration: Longer repayment tenure may ease EMI burden, but results in more total interest paid.
7. Covered Expenses: Make sure the loan covers tuition, living costs, travel, insurance, and other academic-related expenses.
8. Prepayment Terms & Conditions: Some lenders charge penalties for early repayment—others don’t. This can affect your flexibility in clearing the loan faster.