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Education Loans for Studying Abroad

For overseas study the decision is rarely just the rate — it is the currency.

TCS applies on foreign remittance for education
Yes

At concessional treatment for education, with further relief where the remittance is funded by an education loan. Check current slabs.

as of 2026-08-17· Income Tax Department — TCS on LRS remittancesverified

An INR loan funding USD fees leaves you carrying the exchange-rate risk across four years of disbursals, and a 10% rupee depreciation adds 10% to the real cost of every remaining tranche. That risk is usually larger than the rate difference between lenders.

By Nishit Kumar, Founder & Editor
Updated 17 August 2026

Beyond the table

Tax collected at source on foreign remittance is not a cost, it is a prepayment — it is credited against your tax liability and claimed back through your return. It is still cash out of the door at the moment of the transfer, so budget it into the cash flow even though you recover it later. Education remittances receive concessional treatment, with further relief where funded by a loan from a financial institution.

Costs that consistently get left out of the plan: the forex margin on each transfer, which is a real percentage of every tranche; health insurance mandated by the university; and the blocked-account or proof-of-funds requirement in several countries, which ties up money you had earmarked for fees. Build all three into the loan amount rather than discovering them mid-course.

Your numbers

₹15 L
₹0₹15,00,000₹20 Cr
TCS payable
₹1,00,000
Amount remitted
₹15,00,000
Threshold
₹10,00,000
Amount above threshold
₹5,00,000
TCS rate
20.00%
Total outflow
₹16,00,000

What this means.General LRS remittance — 20% above ₹10 lakh. TCS is not an extra tax — it is a prepayment. It appears in your Form 26AS and you claim it as a credit when filing your ITR, or against your salary TDS via Form 12BAA. The LRS ceiling is USD 250,000 per person per financial year.

Questions

How much education loan can I get for studying abroad?

Public sector banks lend into the tens of lakhs against collateral; specialist NBFCs go higher and are more flexible on security, at a higher rate. The limit is usually set by the co-applicant's income and the collateral offered rather than by the course cost.

Do I pay TCS on money sent abroad for education?

Education remittances under the Liberalised Remittance Scheme receive concessional TCS treatment, with further relief where the remittance is funded by an education loan from a financial institution. TCS is not a tax cost — it is credited against your liability and claimed in your return — but it is cash out at the time of transfer. Check the current slabs before you plan the cash flow.

Should I take a loan in rupees or in foreign currency?

A rupee loan is simpler and usually cheaper to obtain, but you carry the exchange-rate risk on every future disbursal. Foreign-currency options exist for some destinations and remove that risk while adding complexity. For a four-year course the currency exposure is often the larger number.

Related reading

Sources

Every figure on this page is traced to the document it came from. Where a claim rests on a regulator or an institution’s own rate card, that is the link below — not a summary of it.

  1. [1]Tax collected at source on foreign remittances under LRS— Income Tax Department, Government of IndiaPrimary
Worth knowing.Rates, fees and terms change frequently and vary by applicant. Everything here is general information, not personalised advice. Confirm the current terms directly with the institution before you apply. How we research and rate.