Top Study Abroad Loan Myths Busted for 2025

A new day, a new dream of studying abroad, a new intake season, and the same old confusion. Education loans continue to be one of the biggest hurdles or rather, perceived hurdles for students planning to study abroad. The problem? Too many myths, half-truths, and “Google said so” advice.

This blog breaks down the most common study abroad loan myths that Indian students still believe in 2025. From eligibility assumptions to interest rate fears, we’re busting it all so you don’t make financial decisions based on WhatsApp forwards. Lorien Finance is here to help you make informed, stress-free choices for all your study abroad loan questions even if it is a lame one, everything will be answered without judgement.

Myth 1: Only Rich Students or Collateral Owners Can Get Loans

Reality: Not true. Many students believe they need to own property or have a wealthy co-applicant to get approved. But thanks to NBFCs, fintech platforms, and even private banks, unsecured loans are now widely available especially for top universities.

At Lorien Finance, we work with 17+ trusted Indian and Global lenders, including those who provide collateral-free study abroad loans with No-cosigner drama and flexible repayment options.

Myth 2: Public Sector Banks Are Always Cheaper

Reality: While public banks may offer slightly lower interest rates, they also tend to have strict eligibility criteria, longer processing times, and complex paperwork. In contrast, NBFCs and private banks offer faster approvals, flexible repayment terms, and often cover a larger part of your total expenses.

During Lorien Finance's Loan Fest, students can compare offers across public, private, and NBFC lenders, all in one place with interest rates starting at 3.39%*.

Myth 3: Loans Only Cover Tuition Fees

Reality: Many students assume that loans cover tuition only. But today’s education loans or study abroad loans can include everything:

• Living expenses
• Flight tickets
• Insurance
• Laptop/books
• Visa and admin fees

A good lender covers up to 100% of your total education cost which covers all of the above, and Lorien Finance helps you not only getting that but also helps in identifying those options based on your profile.

Myth 4: You Can’t Apply Without Final Admission

Reality: You don’t have to wait for the official admit to get started. Most lenders offer pre-admission loan eligibility checks or provisional sanctions based on your shortlists and academic profile.

This is especially helpful for students applying to multiple universities. Lorien Finance’s advisors guide students on pre-admit offers so they can plan finances in advance.

Myth 5: Loan Processing Takes Too Long

Reality: This one used to be true but not anymore. With digitized KYC, e-signatures, and streamlined underwriting, many NBFCs and private banks can process loans within 7–10 working days or faster during priority periods like Loan Fest.

Lorien Finance provides faster loan sanction time within a week of document submission and also tracks lender timelines so Fall 2025 aspirants never miss a visa deadline.

Myth 6: Interest Accrues Immediately After Disbursement

Reality: Most lenders offer a moratorium period, meaning you don’t start full repayments until after your course ends. You may pay simple interest or nothing at all during the study period depending on the lender.

Loan Finance loan experts explain repayment structures clearly so you don’t get blindsided by post-study EMIs.

Myth 7: Education Loans Affect Future Credit Negatively

Reality: In fact, timely repayment of your study abroad loan can boost your credit score, which helps in securing credit cards, car loans, or even a home loan later.

Lorien Finance also provides post-disbursement guidance to help students manage repayments smartly after graduation.

Myth 8: Comparing Lenders Is Too Confusing

Reality: Certainly not an issue, when you use Lorien Finance. With access to 17+trusted Indian and global lenders, you can easily compare interest rates, processing fees, and coverage all in one dashboard.

And with Loan Fest, you also get:

• Exclusive interest rates starting at 3.39%*
• Assured rewards worth ₹2,000 on every successful disbursement
• Big-ticket prizes like MacBooks, iPhones, and study abroad kits worth ₹20,000

Final Checklist: What to Ask Before Believing Study Abroad Loan Myths

• Have you compared both collateral and non-collateral options?
• Have you spoken to a loan advisor (not just scrolled forums)?
• Have you checked repayment terms beyond just interest rates?
• Are you aware of all inclusions (insurance, living, visa)?
• Have you explored pre-admission offers?

Sounds overwhelming right? But with Lorien Finance you got all the questions answered and not only that you can get study abroad loans that suits your study abroad loan requirements. 

Say Goodbye to Loan Confusion

In 2025, there’s no reason to let myths drive your financial decisions. The landscape of study abroad financing has changed with faster loans, flexible options, and student-first services are the norm now.

At Lorien Finance, we don’t just help you apply for a study abroad loan, we help you understand it, compare it, and optimize it. That’s why thousands of students choose us to finance their study abroad dreams, especially with Lorien Finance.

FAQs

Do I need to show income proof even if I have collateral?
Yes. Most lenders still evaluate co-applicant income even with property-based loans.

Are NBFCs safe for study abroad loans?
Yes, Lorien works with RBI-regulated NBFCs that specialize in education loans for international studies.

Is it mandatory to take loan insurance?
Some lenders include it, others leave it optional. Always clarify the cost and coverage.

Can I apply for a loan with multiple admits?
Yes, you can get conditional approvals or switch disbursement based on your final choice.

Does Lorien charge for loan assistance?
No, our services for students are completely free. We are compensated by lenders, not students.