Studying abroad is a dream for many students in India. However, the cost of higher education in foreign countries can be a significant financial burden for most families. This is where education loans come in handy. Education loans abroad can provide financial assistance to students who wish to pursue their higher education in foreign universities. In this article, we will explore the eligibility criteria for education loans, the application process, and the best banks in India for education loans.
What is Education Loan for Abroad?
Education loan for abroad studies is a type of loans offered by banks or financial institutions to students to help finance their education. These loans can cover the cost of tuition fees, accommodation, travel, and other related expenses. Education loans for abroad studies usually have a lower interest rate than personal loans, making them a more affordable option for students.
Check Out: Top Universities to Study Abroad
Steps to Apply for an Education Loan for Aborad
- Research and choose a lender: Look for banks, financial institutions, and NBFCs that offer education loans. Compare their interest rates, processing fees, and other terms and conditions.
- Check eligibility criteria: Once you have selected a lender, check their eligibility criteria to ensure that you meet their requirements for education loan applicants.
- Gather required documents: Collect all the necessary documents such as proof of identity, address, income, academic record, and admission letter from the educational institution.
- Fill the loan application: Fill out the education loan application form provided by the lender. Ensure that you fill in all the details correctly and attach all the required documents.
- Submit the application: Submit the completed application form along with the necessary documents to the lender. After verifying your eligibility and documents, the lender will process your loan application.
Types of Education Loans for Studying Abroad
There are several types of education loans available to students who wish to pursue higher education abroad. The type of education loan for abroad and its terms and conditions can vary depending on the lender. Here are the different types of education loans based on the lenders:
Secured Education Loan
A secured education loan is a type of loan where the borrower needs to provide collateral such as property or fixed deposits to secure the loan. The collateral acts as a security for the lender in case the borrower fails to repay the loan. As a result, secured education loans for abroad studies come with a lower interest rate compared to unsecured loans.
Unsecured Education Loan
An unsecured education loan is a type of loan that does not require the borrower to provide any collateral to the lender. As there is no security provided, the interest rates on unsecured education loans are higher compared to secured education loans. Additionally, the loan amount sanctioned for unsecured education loan for abroad studies is relatively lower.
Students should weigh their options and choose a loan type that is suitable for their financial situation. secured education loans are ideal for students who have collateral to provide and require a higher loan amount. Unsecured education loans are useful for students who don't have collateral to offer and need a smaller loan amount.
Also Explore: Scholarships to Study Abroad
Education Loan For Abroad: Eligibility
Education loans for abroad are normally available to Indian students who want to study abroad. The requirements for receiving student loans might differ from one bank to another. Nonetheless, some of the general requirements for qualifying include
- Indian Citizenship: The applicant must be an Indian citizen or have a valid Indian passport.
- Age: Applicants must be between 18 and 35 years old at the time of application.
- Academic Record: Students must have a good academic record with a minimum of 60% marks in their previous degree or qualifying examination.
- Admissions: Applicants must have secured admission to a recognized university or institution for the course they wish to pursue.
- Co-applicant: Most banks require a co-applicant who has a steady income source and can provide collateral security for the loan.
- Credit Score: Applicants should have a good credit score and no history of defaulting on loans or credit card payments.
Documents Required for Applying for Education Loan to Study Abroad
To apply for an education loan, you will need to submit various documents, including proof of university admission, academic records, and financial statements. Also, you must fulfill specific requirements in order to be eligible for the loan to study abroad.
- Admission Letter: Proof of admission to a recognized university or institution abroad.
- Passport: A valid passport is required for identity verification and travel purposes.
- Academic Documents: Mark sheets, degree certificates, and other academic records to prove academic eligibility.
- Income Proof: The co-applicants income documents, such as salary slips, income tax returns, and bank statements.
- Collateral Documents: If the collateral is required to secure the loan, relevant documents such as property papers, fixed deposit receipts, and other asset documents.
- Loan Application Form: The application form provided by the lender must be completed with accurate information.
- Photographs: Passport-sized photographs of the applicant and co-applicant.
- Test Scores: Scores of standardized tests such as TOEFL, IELTS, GMAT, or GRE, if required by the lender.
- Other Supporting Documents: Any other documents that the lender may require, such as visa documents, travel itinerary, etc.
Know more, why 1.33L Indians chose to study abroad
Best Indian Agencies for Education Loans to Study Abroad
There are several Indian agencies that provide education loans to students looking to pursue their studies abroad. Some of the best Indian agencies for education loans to study abroad are mentioned below along with the average loan amount and interest rates:
| Major Lenders | Types of Education Loans | Loan Amount | Interest Rates |
|---|---|---|---|
| State Bank of India, Bank of Baroda, Punjab National Bank, Union Bank of India | Loans from Public-Sector Banks | Up to INR 7.5 Lakhs | Better interest rates than private lenders, tax benefits under Section 80E available |
| ICICI Bank, Axis Bank | Loans from Private Banks | Depends on various factors | Higher interest rates than government banks, lower than NBFCs, tax benefits under Section 80E available, faster processing time |
| HDFC Credila, Avanse, InCred, Auxilo | Loans from Non-Banking Financial Companies (NBFCs) | Depends on various factors | Higher interest rates than government and private banks, no tax benefits under Section 80E, faster processing time |
| Prodigy Finance, MPOWER Financing | Loans from International Lenders | Depends on target study destination and loan product offered | No collateral or co-applicant required, limited list of colleges and countries, loan amount in foreign currencies |
Also Check:
Choosing the right bank for your education loan is crucial to ensure that you get the best terms and conditions. Factors to consider when choosing a bank for education loans include:
- Interest rates and processing fees
- Loan amount and repayment terms
- Collateral requirements
- Loan disbursement process and time frame
- Customer service and support
Top Banks for International Education Loans
There are several banks in India that offer education loans for studying abroad that offer education loans at competitive interest rates with flexible repayment options, and they have dedicated loan schemes designed specifically for students who want to pursue higher education abroad. Mentioned below are a few of the top banks offering education loans to study abroad
State Bank of India
SBI's premier student loan scheme, the Global Ed-Vantage education loan scheme, is specifically designed for students who aspire to study abroad. The scheme offers students an opportunity to secure their education funding at remarkably low-interest rates.
| Education loan terms | Values |
|---|---|
| Interest Rate | 9.7% (Female candidates), 10.2% (Male candidates) |
| Loan amount range | INR 10 Lakhs to INR 1.5 Cr. |
| Loan Margin | 10% |
| Total Loan Tenure | Up to 15 years |
| Total Expenses covered by the education loan | Tuition Fees, Living expenses, Study aid expenses, travel expenses, library fees, etc |
| Average moratorium period | course duration + 6 months (can be extended to a year) |
| Processing Fees | Rs. 10,000 |
Punjab National Bank
PNB Udaan is an education loan scheme offered by Punjab National Bank for students who want to pursue higher education abroad. Under this scheme, students can avail of financial assistance to cover expenses such as tuition fees, travel expenses, living expenses, and other related costs.
| Education loan terms | PNB Udaan Education Loan Scheme |
| Loan amount range | Need-based finance |
| Interest rate | 11.75% |
| Loan Margin | Upto INR 4 lakhs - NIL Above INR 4 lakhs - 15% |
| Total Loan Tenure | Up to 15 years |
| Total Expenses Covered | All expenses related to the course abroad |
| Processing Fees | 1% minimum INR.10000/- (Refundable after 1st Disbursement) |
| Moratorium Period | Course period + 1 year |
| Repayment Period | Maximum upto 15 years |
Canara Bank
Canara Bank provides education loans for studying abroad under the IBA's model loan product for higher studies in India and Abroad scheme. This scheme is available for both undergraduate and postgraduate courses, and students who want to pursue their studies abroad can apply for an education loan.
| Education loan terms | Canara Bank Abroad Education Loan Scheme |
| Maximum Loan Amount | Need-based financing. For studies in India: INR 10 Lakhs |
| Canara Bank education loan ROI | 11.15% |
| Eligible Courses | Undergraduate (Bachelors), Postgraduate(Masters), Ph.D., PG-Diploma Courses, etc. |
| Loan Tenure | Up to 15 years |
| Moratorium period duration | Course period, plus one year |
| Loan Margin | For loans of up to INR 4 Lakhs: Nil For loan amounts above INR 4 Lakhs -15% |
| Processing Fees | Nil |
Bank of Baroda
Bank of Baroda is one of the few government banks that offers education loans for abroad with conditions similar to SBI. The Bank of Baroda's main loan program for students to study abroad is called the Baroda Scholar loan program. Based on their global rankings, the bank divides colleges into prime and non-prime universities and offers loan arrangements in accordance.
| Education Loan Terms | For universities in premier list | For universities in non-premier list |
|---|---|---|
| Loan Amount | Up to INR 150 lakhs | Up to INR 60 Lakhs |
| Interest Rate | 10.60% | 11.25% |
| Expenses Coverage | Tuition + All expenses related to the candidate’s course | Tuition + All expenses related to the candidate’s course |
| Loan Margin | 0% | Up to INR 4 lakhs - NIL Above INR 4 lakhs - 10% |
| Repayment Period | Up to 15 Years | Up to 15 Years |
| Moratorium Period | Course Duration + 6-12 Months | Course duration + 6-12 Months |
| Processing Fees | 1.00% of loan amount (refundable) (maximum 10,000/-) A non-refundable lump sum amount of INR 7,500 per property as Legal and Valuation charges | 1.00% of loan amount (refundable) (maximum 10,000/-) A non-refundable lump sum amount of INR 7,500 per property as Legal and Valuation charges |
| Processing Time | 15 Days if processed through our team | 15 Days if processed through our team |
Students can also look for scholarships to study abroad, click here to know more
Tips for a Successful Education Loan Application
Applying for an education loan for abroad can be a complex process, but following these tips can make it easier:
- Determine the amount of loan you need by considering the cost of living, tuition fees, and other expenses.
- Check the repayment options available, such as the repayment period, interest rate, and any prepayment penalties.
- Be aware of the collateral requirements, as some lenders may require collateral or a co-signer for the loan.
- Check the interest rates offered by different lenders, as they can vary depending on the lender and the loan amount.
- Be careful of the loan processing time, as it can take several weeks or even months for the loan to be processed.
- Make sure to plan for loan repayment after completing your studies, as it may take some time to find a job and start earning a steady income.
Education loans for studying abroad can help students finance their education and achieve their academic goals. By understanding the basics of education loans, eligibility criteria, and the best banks to approach, students can make informed decisions and secure the necessary funding for their studies abroad.
Also Check:
Comments