How Nepali students studying abroad can take loans: Everything you need to know

Studying abroad is a dream for many Nepali students. From Australia and Canada to the United States and the United Kingdom, thousands of students from Nepal leave the country each year to pursue higher education. However, this journey comes at a high cost. Tuition fees, living expenses, visa processing, travel, insurance, and unforeseen emergencies all add up to a significant financial burden.

While scholarships and part-time jobs help ease the burden for some, many students or their families look towards education loans to make international study a reality. But how can Nepali students studying abroad take out a loan—especially once they are already outside Nepal? Here’s a detailed breakdown of what’s possible and how to approach it.

1. Types of education loans available for Nepali students

Nepali students can access education loans through two main routes:

a) Loans from Nepali banks and financial institutions

Before leaving Nepal, students can apply for education loans from commercial banks, development banks, or finance companies. These loans are typically meant to support students through:

• University application fees
• Tuition and semester fees
• Visa and processing costs
• Airfare and travel
• Accommodation and living expenses for the initial months

Most banks require physical collateral, usually in the form of land, house, or fixed assets owned by the student’s family.

Basic eligibility requirements:

• Admission offer letter from a foreign university or college
• Valid student visa
• Proof of academic qualifications (SLC/SEE, +2, Bachelor’s, etc.)
• Citizenship and relationship verification documents
• Collateral documents (land ownership, valuation, etc.)
• Income source or guarantor’s proof of income (especially if parents are self-employed)

Common banks offering education loans:

• Nabil Bank
• Global IME Bank
• Himalayan Bank
• NIC Asia Bank
• Prabhu Bank
• Laxmi Sunrise Bank

Loan limit: Varies depending on the bank and the collateral, but can range from NPR 500,000 to over NPR 5 million (50 lakhs)

Repayment: Most banks offer a grace period (moratorium) during your study years. Repayment typically starts 6–12 months after course completion and can extend up to 7 years

b) Loans from foreign banks or institutions in host countries

Once students are abroad, accessing loans becomes much harder. Most international lenders require:

• A cosigner or guarantor who is a citizen or permanent resident of the country
• Good credit history (which new international students usually lack)

However, some platforms and institutions do offer international student loans without cosigners, although they often come with higher interest rates.

Examples of such platforms:

• MPOWER Financing (mainly for US/Canada)
• Prodigy Finance (for select Master’s programs)
• Ascent Funding (for US-based programs, often requires a cosigner)

Keep in mind, these lenders usually only work with specific universities and programs and may require you to be enrolled full-time.

2. Can Nepali students apply for loans after going abroad?

Yes—but with limitations. Once you’re already abroad, Nepali banks usually don’t issue new loans directly to students unless a guardian in Nepal takes responsibility. Here’s how it works:

• Your family in Nepal can apply for a loan on your behalf using collateral
• The loan amount can then be sent abroad via legal remittance channels
• You (as the student) may still need to provide university documents and visa copies digitally
• The loan will be in the name of your guardian, and they will be responsible for repayment unless you send money back from abroad

Nepali banks generally do not accept remote applications without physical signatures, which is why pre-planning before departure is critical.

3. How much can you borrow and what does it cover?

Most Nepali banks allow loans up to 80–90% of the assessed cost, depending on the bank’s policy and the collateral value.

What it usually covers:

• Tuition and fees
• Visa processing fees
• Travel and airfare
• Health insurance
• Initial living expenses
• Emergency or contingency costs

However, monthly living expenses beyond the initial few months are not always covered unless specifically approved.

4. Interest rates and repayment structure

Interest rates for education loans in Nepal typically range from 10% to 12.5%, depending on the bank and risk level. Some banks offer lower rates during the study period and increase it after graduation.

Repayment begins:

• After graduation or
• After a fixed moratorium period (usually 6 months to 1 year after graduation)
• Monthly EMIs (Equated Monthly Installments) are calculated based on the principal and interest

Loan tenure usually spans 5–7 years, with some banks allowing extensions in special cases.

5. Documents required for a Nepali student education loan

Here’s a general checklist:

• Admission letter from foreign university/college
• Student visa copy
• Academic transcripts and certificates
• Citizenship of student and guardian
• Passport copies
• Statement of Purpose (explaining the reason for studying abroad)
• Collateral documents (land, building valuation, tax clearance)
• Guardian’s income proof
• Recommendation letters (if needed)

6. Challenges faced by students applying from abroad

• Physical presence often required: Most Nepali banks still require the applicant or guardian to be present at the bank
• Communication delays: Sending documents back and forth can delay the process
• Currency risks: Repaying in foreign currency can be easier if you get a job abroad—but risky if the exchange rate fluctuates
• Limited access to credit: Students without strong family support or collateral often get left behind

7. Alternative options to consider

• Scholarships: Always try to apply for in-country or university-based scholarships abroad
• Part-time work: Most countries allow 20 hours/week for international students
• Crowdfunding: Some students turn to GoFundMe or other platforms to raise small amounts
• Education consultancies: Some consultancies in Nepal partner with banks to facilitate loan processes

Final thoughts

Education loans are a powerful financial tool to help Nepali students fulfill their dreams of studying abroad. However, they require careful planning, a strong financial background, and responsible borrowing.

If you are planning to study abroad:

• Start the loan application process months in advance
• Make sure your family understands the commitment
• Always compare interest rates and terms between banks
• Never rely solely on expected part-time income abroad for repayment

For those already abroad and in financial trouble, reach out to your local Nepali community, student unions, or embassy for support or emergency relief.