Types of Education Loans in Germany

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

 If you’re planning to study in Germany and need financial aid, education loans can help ease the burden of expenses. These loans are generally divided into two types: secured and unsecured education loans.

• Secured education loan: Also referred to as an education loan with collateral, this type of loan requires the applicant to offer some form of security. The collateral can include movable assets such as fixed deposits or LIC policies, or immovable assets like residential property, commercial property, or non-agricultural land. In India, most government banks require collateral to process an education loan for studying abroad.
  

• Unsecured education loan: This type of loan does not require any collateral, which is why it’s also known as a loan without collateral. However, because the financial institution takes on more risk, interest rates are typically higher than those for secured loans. Additionally, a co-applicant or co-signer is mandatory, and the approval of the loan largely depends on the co-applicant’s income and credit score (CIBIL score).

Eligibility Criteria for Education Loans to Study in Germany

Before applying for an education loan, it’s essential to ensure that you meet the basic eligibility standards set by most lenders. While these requirements may differ slightly from one financial institution to another, the following are commonly expected criteria:

• The applicant must be a citizen of India.
• Admission must be secured in a German university that is approved by the lending bank.
• The applicant should be at least 18 years old at the time of application.
• The selected program should be career-focused, ensuring potential for employment and repayment post-study.
• Proof of a blocked account with a deposit of EUR 11,208 is mandatory.

For unsecured loans, the applicant must have a co-applicant who meets the lender’s minimum income requirements.

Documents Required for an Education Loan to Study in Germany

When applying for an education loan to fund your studies in Germany, you’ll need to submit a set of essential documents to initiate and complete the loan process. These typically include:

•  KYC documents of the applicant
•  Academic transcripts from Class 10, 12, and graduation
•  Official admission letter from the German university
•  Detailed fee structure issued by the institution
•  KYC documents and income proof of the co-applicant
•  Proof of funds in a blocked account (as required by German visa rules)
•  Additional paperwork if the loan is backed by collateral

Acceptable collateral may include residential or commercial property, non-agricultural plots, or fixed deposits

Germany Education Loan Application Process

Applying for an education loan to study in Germany is quite a streamlined process, especially when done through Lending Brothers. Here’s how you can go about it:

• Begin by checking your loan eligibility using Lending Brothers’ online eligibility tool.
• A dedicated loan advisor will get in touch with you to guide you through the process in detail.
• Based on the lender that suits your profile, you’ll receive a tailored document checklist.
• Collect and submit all necessary documents to the lender for assessment.
• Once the documents are verified, you’ll be issued a sanction letter along with a loan agreement.
• If you agree with the terms, sign the agreement and return it to proceed.

The loan amount will be disbursed either to your account or directly to the university, depending on the policy of the selected lender and your preference.

Costs Covered Under Education Loans for Germany

• Education loans for Germany typically extend beyond covering just tuition fees. Most lenders also finance other academic and living costs such as hostel or accommodation fees, travel expenses, exam fees, charges for library and lab usage, and the cost of purchasing books, uniforms, required instruments, laptops, or desktop computers essential for your course. Additionally, some lenders include a one-time economy-class return airfare between India and Germany as part of the loan.
• Being well-informed about the loan process can make a real difference when applying for a study loan to Germany. With a wide range of lenders available—each with unique features—it’s important to compare options thoroughly. A clear understanding of what expenses are covered and how lenders differ can help you select the right fit. If you’re seeking guidance, Lending Brothers’ advisors are here to help you check your eligibility and explore the most suitable loan options.

Expenses covered by abroad education loan for Germany Study

Once your loan has been approved/sanctioned then it is time to take a disbursement. Now, when it comes to disbursement, it is your choice to take out all the approved money in one go or take it out in parts as per your requirements. Usually, later is much preferred because the interest that is charged will only be on the disbursed amount not the total approved amount. So in case you decide to take disbursement of part amount then the interest that you would be paying will be less as compared to when you would have taken a full amount disbursement.

The expenses which may be covered under loan as per the lender will include –

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• Tuition fees
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• Living expenses (accommodation, food, utility, and more)
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• Health insurance
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• Visa fees
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• Expenses related to studies (lab fees, instruments, and more)