Student Loan for Australia: A Complete Guide for 2026 Aspirants

The decision to study in Australia is a huge step and a smart one. The universities in Australia are highly regarded in the world, the degrees are more industry-specific and post-study employment opportunities have seen the country appealing to Indian students seeking international employment.

However, along with excitement, there is a topic that comes to mind, a practical question: how do you finance your education overseas? This is where an education loan studying in Australia   fits in your study-abroad plan. By having the appropriate loan choice, you can control the payments of tuition, standard of living, and other charges without straining the savings of your family.

This guide gives a clear and simplified description of new policy changes, the loans that Indian students can have, requirements and documents needed and some tips that can be used in practical sense in order to avoid any form of mistakes.

Top Universities in Australia

Important Note on Fund Acceptance by Australian Universities

Australian universities generally prefer education loans from banks over NBFCs. Public and private banks are viewed as more credible due to stronger regulations and clearer tracking of funds.

NBFC loans are not rejected, but they often face additional visa scrutiny. If an NBFC loan is used, the sanctioned amount should be maintained in the student’s or sponsor’s bank account for at least 3–6 months before visa filing to establish a clear financial history.

For this reason, students should apply to banks first for an Australian education loan. NBFCs are best treated as a backup option when bank approval is not possible or when quicker disbursal is required.

Early planning and the right lender choice can significantly reduce visa delays and improve approval chances.

Living Expenses in Australia and Loan Planning

Along with tuition fees, living expenses in Australia directly affect how much education loan you need. Costs like rent, food, transport, and insurance vary by city. To plan your loan accurately, explore our detailed guide on Living Expenses in Australia before finalising your budget.

Best Education Loan Options for Indian Students Going to Australia

Indian students usually fund their Australian education through loans taken in India or from international lenders. Each option comes with different interest rates, repayment terms, and collateral requirements. 

Best Lenders of Secured Education Loan for Australia 

Best Lenders of Unsecured Education Loan for Australia 

Choosing the right lender depends on your university, course, co-applicant profile, and whether you can offer collateral.

Eligibility Criteria for Education Loans to Study in Australia

While requirements vary slightly across lenders, most Indian students must meet the following conditions:

• Minimum age of 18 years
• Confirmed admission to a recognized Australian university
• The course must be approved by the lender (degree, diploma, or vocational program)

A strong academic background and a financially stable co-applicant improve approval chances.

Documents Required for an Australia Education Loan

Documentation is a critical step, and delays often happen here. Below is a general checklist most lenders ask for:

• University admission letter
• Completed loan application form
• PAN card and identity proof
• Academic records
• Proof of residence
• Cost of study breakdown
• Bank statements
• Income proof of the co-applicant
• Asset and liability details (if applicable)

Exact requirements may differ based on lender and loan type.

Step-by-Step Application Process for Student Loans

The loan process usually begins after finalising your course and university. Most lenders only approve loans for institutions listed with them.

Application Flow

• Finalise your course and Australian university
• Receive an unconditional offer letter
• Visit Student Cover’s Website
• Click Our Education Loan page
• Go to our tie-up page sections 
• Compare education loan options
• Check eligibility and loan amount
• Arrange the required documents
• Tab Apply Now: Submit the application online or through a counsellor

Many students use education loan platforms to simplify comparisons and paperwork, which can save time during visa preparation.

Common Mistakes to Avoid While Applying for an Education Loan

Small errors can lead to rejection or long delays. Indian students commonly face issues such as:

• Submitting incomplete or incorrect documents
• Applying before receiving a confirmed admission letter
• Choosing an unsuitable co-applicant
• Underestimating total expenses (tuition + living + travel)
• Missing visa deadlines due to late loan applications
• Ignoring hidden charges and repayment terms
• Not using the loan sanction letter for visa filing
• Choosing universities and courses not eligible for an education loan.

Planning ahead reduces these risks significantly.

Practical Tips to Improve Loan Approval Chances

A well-prepared application increases approval odds and reduces stress later.

• Start the loan process early
• Compare banks, NBFCs, and international lenders
• Maintain good academics and English test scores (IELTS/TOEFL; GRE/GMAT where required)
• Apply only to CRICOS-registered universities
• Choose a co-applicant with a stable income and good credit history
• Keep documents organised
• Calculate the full cost of attendance in advance
• Clarify processing fees, prepayment penalties, and interest type
• Plan your repayment strategy after graduation
• Use the loan sanction letter as proof of funds for your visa

Note - Career prospects matter just as much as education costs when planning to study abroad. Understanding the Highest Paying Jobs in Australia can help you choose the right course and estimate your future earning potential. Explore our detailed guide to see top roles, average salaries, and career growth opportunities.

How Recent Policy Changes Affect Student Loans in Australia

Australia introduced several student loan reforms to support domestic students. While these updates do not directly apply to international students, they are often confused with visa and funding rules. Here’s a clear breakdown.

20% Reduction in Student Loan Debt (Domestic Students)

From 1 June 2025, eligible domestic student loans, including HELP, VET Student Loans, and Australian Apprenticeship Support Loans, will receive a 20% reduction in outstanding debt. This benefit is strictly for Australian citizens and permanent residents.

Revised Loan Repayment Threshold

A loan repayment threshold refers to the minimum income level determined by lenders (mostly for student loans/government loans) that starts the process of mandatory repayments; if your income is under that level, you pay nothing and as soon as your income is above the threshold, you pay a certain percentage on the income that is above the threshold, leading to higher payments as the income increases. Starting 1 July 2025, the income threshold for mandatory student loan repayment increases to AUD 67,000, up from AUD 54,435. Repayments will apply only once income crosses this limit, offering relief to lower-income domestic graduates.

Changes in Loan Indexation

The adjustment of a loan's value (either the principal, interest rate, or both) to a defined economic index, like the inflation rate or a market benchmark such as the Consumer Price Index (CPI), is known as loan indexation. This mechanism is mainly used to guard the lender's purchasing power or to keep the payment burden of the borrower stable, thus the loan's real value remains unchanged throughout the period.

Under legislation passed in November 2024, loan indexation will be calculated using the lower of the Consumer Price Index (CPI) or Wage Price Index (WPI) from 1 June 2025. This ensures student debt does not grow faster than wage increases.

Show Money Requirement for International Students

For international students, financial proof requirements remain unchanged. Since 10 May 2024, students must show AUD 29,170 as proof of funds—a 17% increase from the earlier requirement of AUD 24,505. For Indian families, this roughly translates to a higher INR amount due to exchange rates and must be planned carefully.

Conclusion

Australian education is not a short-term investment in studying and working. Although recent policy changes are predominantly favourable to domestic students, Indian students need to thoroughly budget their finances in relation to the new AUD 29,170 requirement to demonstrate proof-of-funds and the increasing cost of living.

An education loan, when taken with wisdom, will render your Australian education plan achievable and affordable. Shop around, know how to pay, and be ready to write paperwork. It is also possible to start a study-abroad experience on a confident and secure basis, with some organised planning and financial awareness.

FAQs

Which bank is best for an education loan to Australia from India?

Public banks like SBI and private lenders such as ICICI or Axis are popular. The best option depends on your academic profile, co-applicant strength, and whether collateral is available.

How much education loan can Indian students get for Australia?

Indian banks may offer up to INR 1.5 crore without collateral. International lenders usually cap loans at USD 2,20,0,000.

 Is collateral mandatory for an Australia education loan?

Not always. Many NBFCs and international lenders offer collateral-free loans, though interest rates may be higher.

Can international students benefit from Australia’s student loan reforms?

No. The recent debt reduction, repayment threshold, and indexation changes apply only to domestic students.

 Are education loans available without a co-applicant?

Some international lenders may approve loans without a co-applicant, but Indian banks usually require one.

Is it possible to get an interest-free education loan for Australia?

Interest-free loans are rare. Certain trusts offer loan scholarships, but eligibility is limited and competitive.

Does Prodigy provide an education loan for Australia?

Yes, Prodigy Finance does provide education loans for Australia. After the implementation of this new service, Prodigy Finance has made international student financial support available at top-ranked Australian universities for the postgraduate (Master's) degree programs.

 Does the university ranking affect loan approval?

Yes. Lenders prefer recognized and well-ranked Australian universities listed with them.

Can the loan amount cover living expenses in Australia? Yes. Most education loans include tuition fees, accommodation, travel, insurance, and other living costs.