As more Indian families weigh the true cost of higher education, international student loans are quietly becoming one of the fastest growing corners of consumer lending

• Education loan demand surges 20% amid visa uncertainty for study abroad

LONDON: Somewhere between the offer letter and the boarding pass sits the number that decides whether an international degree stays a dream or becomes reality. That number has never been bigger, and it is about to get bigger still.

Domestic courses in pharma, healthcare and engineering at good private colleges in India have become expensive enough to rival a degree abroad. That is why more students are weighing the two side by side, reasoning that if they are borrowing big either way, it may as well fund a degree that opens doors globally. According to the Ministry of External Affairs, the number of Indian students pursuing higher education abroad is around 1.25 million as of January 2025. That scale of demand is exactly why the financing behind it has grown so significantly.

The demand for education abroad has never been higher, whether in India, Africa, or Latin America. What is really driving the shift toward global study is simple economics. Studying at home can cost almost the same as studying overseas, and in many cases it means risking the family home as collateral for a domestic degree. Given that risk, more students are choosing to go global instead, where the pay scale and job opportunities on the other end make the investment feel worthwhile, whether they are from India or across the African region.

Traditional private lenders can go up to INR 3 crore for international studies, but you usually need a co-applicant, property, or fixed deposits to back it. Even government schemes ask for a co-applicant once the loan crosses INR 75 lakh. Prodigy Finance goes up to USD 220,000 without asking for either, backing students on their academic profile and future earning potential instead

This growth is also attracting more players into the space than ever before. The number of consultants, agencies and platforms guiding students through applications and funding is expanding rapidly, all competing for the same pool of ambitious students. For lending companies, that shift cuts both ways. More consultants in the market can mean more students getting guided toward international degrees, which is good news for loan demand. But it also means more noise, more competition for trust, and a real risk of students ending up with the wrong advisor charging significant fees for very little genuine guidance.

According to CRISIL Ratings, education loan assets under management of Indian NBFCs are projected to grow around 20% this fiscal, with destinations like the UK, Germany and Ireland steadily gaining share as students diversify beyond the US. But the affordability pressure on families is real too. A loan that once covered a part of the tuition bill now needs to stretch across tuition inflation, currency depreciation, and living costs that have climbed sharply in nearly every major destination.

Sonal Kapoor, Global Chief Business Officer at Prodigy Finance, says the Fall rush has always been intense, but this year the added weight of new visa rules has made it more chaotic than usual. "This time of year always creates pressure. Despite students preparing well in advance, many are still waiting for their visa confirmation. We are receiving thousands of emails asking us to hold their application in place because their process is still ongoing. We understand that, and we are working with them."

Sonal adds that the door has not closed for students who missed their chance in the US or Australia this cycle. "We are also preparing for students who missed out and are now considering a shift in destination. The good news is they do not have to wait an entire year to make that change. That option is still very much open. That said, because the volume of interest is so high right now, students need clarity before they commit to applying or switching destinations. The Fall semester in the UK is still open, along with a few other destinations, and those intakes should be wrapping up soon."

The bigger picture is this. International education loans are no longer a niche financial product. They are one of the fastest growing corners of consumer lending anywhere in the world, with ticket sizes that would have seemed unthinkable a decade ago. For students and families going through this, Sonal Kapoor has one clear piece of advice. Be careful about what you borrow, the course you choose, and the destination you commit to. She understands that not every student can access a no cosigner or no collateral loan, but where possible, try to avoid pledging family assets, especially for students from humble backgrounds. Unplanned or blind borrowing can create problems that follow a family for years. The stakes are higher than ever, the window is narrower than it looks, and choosing the right lender matters more than ever before.

About Prodigy Finance:

Founded in 2007, Prodigy Finance is an international student lender that has helped over 47,000+ international master's students attend the world's top universities. To date, Prodigy has disbursed over $2.6 billion in funding to students from more than 150 countries. Prodigy Finance is fueled by impact investors and other privately qualified entities who invest in tomorrow's leaders while earning a financial and social return. Prodigy's borderless lending model enables students to apply for a loan based on their future earning potential and not just their current circumstances and credit history.

*Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

*Loan offers are subject to our eligibility, funding, and credit assessment criteria.

*13.38% APR representative variable, based on a total credit amount of USD 40,000 repayable over 180 months at a variable interest rate of 12.24% (8.60% fixed + 3.64% variable). Administration fee: USD 1,680 (4.2% of the amount borrowed), added to the loan on disbursement and repayable with interest over the term. Processing fee: USD 500, payable before the loan is advanced. Initial monthly repayments of USD 100 (30 Months). Subsequent monthly repayments of USD 625.50 (180 Months). Total interest payable USD 73,910.76. Total amount payable USD 115,590.76.