How to get an education loan in Nepal to study abroad
Have a dream of studying for your postgraduate STEM or business degree in the U.S. or Canada? You’re not alone, thousands of Nepali students are taking that step every year in search of world-class education and global opportunities. The trend is increasing and so are the opportunities.
However, due to the increase in tuition fees and the cost of living, most families cannot afford the entire cost themselves. This is where education loans can help ease the financial burden and, at the same time, keep study abroad aspirations within reach.
In this blog, we’ll walk through how Nepali students can use an education loan for postgraduate studies to make their study abroad dreams come true.
Why are education loans important for Nepali students?
Managing expenses presents one of the biggest challenges to many Nepali students. Education loans can help fill that gap and enable students to focus on building a better future with less financial pressure.
- Cover high tuition fees: Tuition fees at the top universities may be extremely high, particularly at the postgraduate level. An education loan makes it possible to pay fees on time and focus on academics. It means you’re able to select the program that suits your goals, not your budget.
- Support living expenses abroad: Living in countries such as the U.S. or Canada can be costly in terms of rent, food and transport. Loans can help with those daily costs, allowing you to focus on your studies and less on money concerns.
- Reduce financial burden on families: Not all families can afford to fund all the expenses of studying abroad. Loans can ease the burden on you and your parents.
- Collateral-free options are emerging: In Nepal, most education loans require property as security, which is often a challenge for families and students. However, companies like MPOWER Financing offer education loans without a cosigner or collateral. This increases the accessibility of financing and enables students to seek international education without relying on family resources.
- Flexible repayment options: Most loan provider companies offer student-friendly repayment plans, with terms that change after graduation. This flexibility helps the students to responsibly manage debt while getting their careers off the ground.
Types of education loans available in Nepal
When Nepali students are looking for financial support, they can find different types of education loans offered by banks, cooperatives and international providers. Choose the best loan for your situation.
1. Loans from commercial banks in Nepal
There are many commercial banks like Nabil Bank, Siddhartha Bank and Global IME that often offer student loans backed by property/collateral with high interest rates. These loans require documentation such as proof of family income, an admission letter from the university, cost estimates from the university and a guarantor.
Bank loans can easily cover university program tuition fees, living costs and even travel expenses, but the loan process may require time for approval, depending on the documentation you provide.
2. Loans from cooperatives and financial companies
Many cooperatives and finance companies in Nepal provide education loans to students, some of them are Chandragiri SACCOS, Sahara Nepal and NCBL. They may approve loans faster and sometimes accept alternative forms of security.
However, interest rates can be slightly higher, so students and families must carefully compare terms. These options are useful for those who do not qualify for traditional bank loans but still need immediate funds.
3. Collateral-free loans
Recently, collateral-free loans have become more common, especially through international providers such as MPOWER Financing. These loans do not require any property, cosigner or assets. This makes loans more accessible to a wider range of students.
Approval is based on academic potential, chosen academic programs and career outlook instead of family assets. For Nepali students striving for postgraduate education in the U.S. or Canadian universities, this option opens the doors to global education without traditional obstacles.
Eligibility criteria for education loans in Nepal
If you’re thinking about studying abroad, find out if you’re eligible for a loan. The good news is that international lenders like MPOWER Financing have clear requirements, so students can prepare with confidence. Most lenders require:
- Proof of citizenship with a valid identification
- Admission offer letter from a foreign university (see the full list of eligible programs)
- Academic records such as transcripts, certificates and test scores
- Detailed cost breakdown from the university
- Proof of property ownership or fixed deposits
Additional requirements from a Nepalese lender include:
- Financial documents of the student or sponsor (salary, income or tax details)
- Collateral or guarantor documents for secured loans
In comparison, MPOWER Financing offers a smooth, collateral-free process, making it more accessible to students who wish to study abroad without relying on family assets.
Step-by-step process to apply for an education loan
Applying for an education loan may feel like a big step, but it’s simple when you follow the steps. You can choose a Nepali commercial bank or a global collateral-free option like MPOWER; the process is designed to support students at every stage.
1. Applying through traditional banks in Nepal
One of the most common ways to secure an education loan in Nepal is by applying through traditional banks, which offer structured loan programs for students planning to study abroad.
Here’s how to get an education loan through traditional banks in Nepal:
- Research bank loan schemes: Compare different banks to find loan options that work for your study location and your ability to pay them back on time. Talking to past applicants can help you gain real insights about the banks.
- Check eligibility: Before you apply for an education loan, make sure you meet the age, academic and financial requirements. A bank may check your family’s financial background to ensure repayment ability.
- Prepare collateral documents: Almost all the banks in Nepal ask for property or a guarantor as security for the loan. Gather all the documents for your property or house to help you avoid delays.
- Gather required documents: Gather documents like admission letters, academic transcripts, proof of citizenship, income proof of your family member and other documents that may be necessary during the loan process.
- Submit loan application: Fill out the student loan application form and submit it along with all additional required documentation. Submitting a well-organized document packet could help facilitate loan approval.
- Loan evaluation: The bank reviews your documents, the value of your collateral and your ability to repay the loan. They may ask to talk to your family.
- Approval and disbursement: Once the loan is approved, it’s released to cover tuition and related study expenses. The funds typically are sent directly to your university to cover tuition and, in the U.S., living expenses.
2. Applying through MPOWER Financing (Collateral-free option)
MPOWER Financing was established for international students who need a no-collateral student loan. The entire process is online, making it easy to apply for no-cosigner, no-collateral loans.
Here’s how you can get an education loan without collateral:
- Check eligibility: Make sure your university is an MPOWER-eligible university and that you meet academic requirements.
- Create an online account: Visit the MPOWER website or download the MPOWER app and create an account. This gives you access to the application and lets you track your loan progress.
- Conditional offer: After analysing your basic information, MPOWER provides a conditional loan offer. This gives you a basic idea of your loan amount and terms for your studies abroad.
- Upload documents: Provide your admission letter, identification and academic records.
- Final approval: MPOWER reviews your documents and provides the final confirmation.
- Accept and disbursement: Accept the loan terms, and MPOWER sends the funds directly to your university to cover tuition fees and other expenses.
What are common mistakes to avoid when applying for a loan?
While applying for an education loan is exciting, students face long waits or are rejected because of small mistakes.
Some common mistakes to avoid when applying for a loan are:
- Not comparing loan options: Rushing into the first loan offer may lead to higher costs. Always seek the right match and compare banks and lenders around the world.
- Incomplete documentation: Missing documents such as transcripts, proof of income or ID can delay the approval process for student loans. Create a list of required documents before applying for the loan.
- Ignoring hidden costs: Besides tuition and other expenses of studying abroad, think about processing fees, insurance, and loan interest rates. Know about fixed vs variable student loan rates to make a better plan.
- Applying without checking eligibility: Each loan has specific requirements. Checking eligibility first saves time and effort.
- Overestimating loan amount: Only borrow the amount you actually need for university fees and living costs. A lower loan amount makes it easier to repay later.
Wrapping up
It may seem hard to get an education loan in Nepal from an international loan provider, but if you follow the steps to get a loan, it can be easy. Students can quickly secure a hassle-free education loan if they provide the right documents and avoid common mistakes.
With proper planning, you can make your dream of postgraduate studying abroad possible. For a fast, no-collateral option, check out MPOWER’s path2success resources.
FAQs
Is it possible to take an education loan in Nepal without collateral?
Yes. Some global lenders like MPOWER Financing offer loans without collateral or a cosigner, focusing instead on your future potential
Can the loan cover 100% of my expenses?
In Nepal, loans often cover tuition and part of living costs. MPOWER loans in the U.S. can cover full tuition, living and health insurance expenses.
How long does the approval process take?
Bank loans may take weeks. MPOWER can give a conditional offer online in minutes and final approval in a few days.
