Education loans have become a key part of studying abroad. Many students dream of pursuing higher education in top universities across the world, but the cost can be a big challenge. That’s why financial institutions like ICICI Bank and Avanse Financial Services offer education loans to help students achieve their study goals.
In this detailed blog, we’ll explore and compare ICICI Bank vs Avanse Education Loan — including interest rates, loan amount, eligibility, repayment options, and examples. By the end, you’ll clearly understand which lender might be a better choice for your situation.
Overview of ICICI Bank and Avanse Education Loans
ICICI Bank Education Loan
ICICI Bank is one of India’s largest private banks. It offers both secured and unsecured education loans for Indian students who want to study in India or abroad. The bank has a strong reputation, quick processing, and a wide range of loan options.
Highlights:
- Education loans for India and abroad.
- Both secured (with collateral) and unsecured (without collateral) options.
- Interest rates start around 10.75% to 12.5% per annum.
- Loan amount up to ₹1.5 crore (for top-category universities).
- Tenure up to 12 years.
Avanse Education Loan
Avanse Financial Services is a Non-Banking Financial Company (NBFC) focused entirely on education financing. It is known for its flexibility, speed, and student-friendly approach.
Highlights:
- Specializes only in education loans.
- Interest rates between 10% and 13.75% per annum.
- Loan amount up to ₹75 lakh (unsecured) and higher with collateral.
- Covers 100% of education-related expenses.
- Tenure up to 15 years.
Detailed Comparison: ICICI Bank vs Avanse Education Loan
| Feature | ICICI Bank | Avanse |
| Type of Institution | Private Bank (RBI-regulated) | NBFC (RBI-regulated) |
| Max Unsecured Loan | ₹1.5 crore (Premium Select) | ₹75 lakh |
| Interest Rate (Unsecured) | 10.75% – 12.5% | 10% – 13.75% |
| Processing Fee | 0.5% – 1% + GST | 1% – 1.5% + GST |
| Margin Money | 0% (Premium) or 15% (Others) | Nil (0%) |
| Tenure | Up to 12 years | Up to 15 years |
| Moratorium Period | Course + Grace Period | Course + 1 year |
| Collateral Option | Yes (for higher amount/lower rate) | Optional |
| Prepayment Charges | Nil after 6 months | Nil |
| Loan Coverage | Tuition + Living + Travel | 100% including Living + Insurance |
| Co-applicant Income | ₹50,000+/month (recommended) | ₹20,000+/month |
| University List Requirement | Pre-approved list required | Flexible |
Interest Rate Comparison with Example
To understand the cost difference, let’s take an example.
Example
A student needs ₹30 lakh for a 2-year master’s program abroad.
Option 1: ICICI Bank
- Interest Rate: 11.25% per annum
- Tenure: 12 years
- EMI (approx): ₹35,000/month
Total Interest Paid:
Using a simple EMI formula, the total amount paid = ₹35,000 × 144 months = ₹50.4 lakh
→ Total Interest = ₹50.4 lakh – ₹30 lakh = ₹20.4 lakh
Option 2: Avanse
- Interest Rate: 12% per annum
- Tenure: 15 years
- EMI (approx): ₹36,000/month
Total Interest Paid:
₹36,000 × 180 months = ₹64.8 lakh
→ Total Interest = ₹64.8 lakh – ₹30 lakh = ₹34.8 lakh
✅ Result:
Even though Avanse offers a longer tenure (which reduces EMI), the total interest paid is higher. So, if your profile fits ICICI’s premium category, you could save nearly ₹14.4 lakh in total interest.
Eligibility Criteria
ICICI Bank Eligibility
- Must be an Indian citizen.
- Admission to a recognized foreign university.
- Co-applicant (parent/sibling/spouse) must have stable income.
- Minimum CIBIL score: 750 or above (preferred).
- Course types accepted: Engineering, Technology, Science, Management, Business Analytics, etc.
- For unsecured loans above ₹20 lakh, college must be on the ICICI premium list.
Avanse Eligibility
- Indian citizen aged 18 or above.
- Admission to any recognized university abroad.
- Co-applicant (parent, relative, or guardian) with minimum income ₹20,000/month.
- CIBIL score of 700 or above (flexible).
- Accepts wide range of courses — STEM, non-STEM, arts, media, hospitality, etc.
✅ Key Difference:
Avanse is more flexible regarding course type and co-applicant income. ICICI is more selective and prefers top-tier profiles.
Margin Money and Coverage
What is Margin Money?
Margin money is the portion of the total education cost you pay yourself. If a lender covers 90%, you must pay the remaining 10%.
Example:
If your total expense is ₹40 lakh:
- ICICI (15% margin): You pay ₹6 lakh yourself.
- Avanse (0% margin): You pay ₹0; Avanse can fund the full ₹40 lakh.
✅ So for students with limited savings, Avanse provides better full-cost coverage.
Processing Fees and Other Charges
| Charge Type | ICICI Bank | Avanse |
| Processing Fee | 0.5% – 1% + GST | 1% – 1.5% + GST |
| Late Payment Fee | As per bank norms | As per policy |
| Prepayment/Foreclosure Fee | Nil after 6 months | Nil |
| Insurance Charges | Optional | Included in many cases |
Example Calculation:
If your loan is ₹40 lakh:
- ICICI processing fee @1% = ₹40,000 + GST (₹47,200 approx).
- Avanse processing fee @1.5% = ₹60,000 + GST (₹70,800 approx).
✅ ICICI Bank has slightly lower processing costs.
Moratorium and Repayment Period
Both lenders give a moratorium period — the time when you don’t pay EMIs (usually course duration + 6–12 months).
ICICI Bank
- Moratorium = Course Duration + 6 months
- Interest during moratorium: Simple Interest (must be paid monthly).
Avanse
- Moratorium = Course Duration + 1 year
- Flexible repayment during moratorium (can pay partial or simple interest).
✅ Avanse offers a longer moratorium, giving students more breathing room before EMI starts.
Tenure and EMI Flexibility
ICICI Bank
- Tenure: Up to 12 years
- Shorter tenure = higher EMI but lower total interest.
Avanse
- Tenure: Up to 15 years
- Longer tenure = smaller EMI but more total interest.
Example:
For ₹30 lakh @ 11% interest:
- 12 years = EMI ₹35,000 (Total interest ~₹20 lakh)
- 15 years = EMI ₹32,000 (Total interest ~₹27 lakh)
✅ Choose ICICI if you want to repay faster; choose Avanse if you want smaller monthly payments.
Collateral Requirements
| Loan Type | ICICI Bank | Avanse |
| Unsecured Loan | Up to ₹1.5 crore (Premium) | Up to ₹75 lakh |
| Secured Loan | Above ₹1.5 crore | Above ₹75 lakh |
| Accepted Collateral | Property, FD, Govt Bonds | Property, FD, Mutual Funds |
✅ Both lenders accept similar collateral, but Avanse allows alternative security forms like mutual funds or insurance policies, which adds flexibility.
Advantages of ICICI Bank
- Lower processing fees.
- Slightly lower interest for top profiles.
- Trusted private bank with stable reputation.
- Easy digital application process.
- Special “Premium Select” category for top universities.
Advantages of Avanse
- Flexible course and university eligibility.
- No margin money (100% cost coverage).
- Longest repayment tenure (up to 15 years).
- Quick approval and minimal documentation.
- Accepts co-applicants with moderate income.
Real-Life Example: Which is Better?
Let’s say two students apply for loans:
| Student | Profile | Preferred Lender |
| Rahul | Engineering student admitted to University of Toronto; co-applicant earns ₹60,000/month; property available as collateral. | ✅ ICICI Bank — better rate (11%), lower total cost. |
| Ananya | Student of Arts & Design admitted to University of Melbourne; co-applicant earns ₹25,000/month; no collateral. | ✅ Avanse — flexible, full coverage, easier approval. |
This example shows how the right choice depends on your background, course, and co-applicant profile.
Tips Before Choosing Between ICICI Bank and Avanse
- Compare total cost, not just interest rate.
- Check repayment flexibility and moratorium options.
- Ask for a written quote from both lenders.
- Read prepayment terms carefully.
- Consider your co-applicant’s income and CIBIL score.
- Use EMI calculators on their websites to plan repayment.
- Avoid multiple applications simultaneously — it affects credit score.
Which One Should You Choose?
Here’s a quick summary:
| Scenario | Better Choice |
| Want lower interest rate and established bank support | ICICI Bank |
| Want flexible eligibility and longer tenure | Avanse |
| Have top-tier university admission | ICICI Bank (Premium Select) |
| Have low co-applicant income or non-STEM course | Avanse |
| Need full cost coverage | Avanse |
| Want lower processing fees | ICICI Bank |
Conclusion
Both ICICI Bank and Avanse offer excellent education loan options for students aspiring to study abroad.
- If you have a strong financial background, good CIBIL score, and admission to a top-ranked university, ICICI Bank could offer you a lower interest rate and overall cheaper loan.
- But if you’re looking for flexibility, no margin money, and easy processing, Avanse is an excellent choice.
In short, the best lender depends on your profile, income stability, course type, and repayment comfort.Before applying, always compare quotes, calculate EMIs, and understand all terms carefully. A small difference in interest rate or fees can save you lakhs over the loan period.