Education Loan For Abroad Studies: From Eligibility To Interest Rate: Everything You Need To Know
Education Loan For Abroad Studies: A Quick Introduction
Studying abroad comes no more as a shock because of the various opportunities like study loans that completely finance your education and harness you with the chance to transform your career to another level. This education loan for abroad studies comes with the perk of a Holiday commonly referred to as a Moratorium period where you can focus on completing your education and not worry about its repayment.
Read this blog to dive into some of the interesting facts of education loans for abroad along with tips to manage its repayment successfully.
SheikhMehreen
Sep 10 2023
10 Min
Types Of Education Loans Available For Abroad Studies
Here are some of the education loans that you can avail of to study abroad:
- Government-funded loans.
- Scholar education loans.
- Collateral loans.
- Non-Collateral Loans.
- Country-specific loans.
Things To Consider When Applying For An Education Loan
While you conduct your research on the lenders and applications for the education loans, here are a few things to consider:
- Interest rate: Research and compare interest rates of various lenders and opt for the one charging on the lower end.
- Repayment tenure: Opt for a shorter repayment tenure to save a lot on interest amount and free up yourself from loan sooner.
- EMI amount, etc.: While you choose a shorter repayment tenure, you may have to pay higher EMIs. Make use of the student loan EMI calculator and decide accordingly.
Eligibility Criteria For Education Loan For Abroad Studies
The eligibility criteria for Education loans for abroad studies varies across different loan providers. However, the following are the basic requirements one needs to fulfill in order to stand eligible for a study loan abroad:
- The applicant must be a resident of India.
- The minimum age of the applicant must be 18.
- The co-applicant must be a parent or guardian.
- The applicant must hold an admission or acceptance letter.
- The co-applicant’s regular income must be stable
How To Apply For a Study Loan For Abroad
Once you fulfill the eligibility criteria for an education loan abroad, you can avail loan from a number of banks and loan providers in the following manner:
- For Collateral: The term collateral refers to an asset or a tangible property that the borrower provides to the bank as a security against the loan. It is also referred to as a secured loan because if the borrower by any chance fails to repay the loan, the bank is authorized to take possession of the collateral to recover the debt. While the process differs from bank to bank, here’s the standard procedure.
- Visit your local bank.
- Apply for an overseas education loan.
- If required, the bank will ask you to provide collateral against the loan.
- Submit the required documents
- You’re more likely for loan approval for a secured one.
- For Non-Collateral: The non-collateral loan refers to an unsecured loan where the borrower does not have to pledge an asset against the foreign education loan. In this type of loan credit history and financial stability of the borrower are taken into account. The application process for an abroad education loan without collateral involves similar initial steps as that of the Collateral loan except for the part where you go through the documentation of the asset you put against the loan.
Also Read: The Best Countries To Study Abroad
Documents Required For Education Loan For Abroad Studies
Here’s a list of documents required for an education loan
- Academic Transcripts.
- Proof of identity.
- Address proof.
- A valid passport
- Admission letter.
- Fee Structure
Advantages Of Taking An Education Loan
From breaking the financial restrictions to pursue your study abroad dream to giving you access to top-notch universities worldwide, a foreign study loan comes with a precious opportunity for you to shape your future along with the following advantages:
- It paves a path to your career advancement and professional development.
- It provides you with the immediate funds to carry forward your study.
- It helps you go all out on selecting the right university and country for yourself by keeping no financial restrictions.
- You don’t have to worry about the repayment owing to deferred payments and a grace period post-graduation (Few banks offer this opportunity).
- You can fund your own education.
- The education loan for foreign studies has low-interest rates.
Also Read: Benefits of Higher Education At Overseas
Tips For Managing & Repaying Your Loan Successfully
While you harness the power to fund your own education, it also becomes equally paramount to manage and strategize into repaying the loan by thoroughly considering a few factors including abroad education loan interest rate:
- Ensure to develop a repayment plan right before you decide to take an education loan so that don’t you fall into a debt trap.
- Opt for a loan plan that will sit perfectly with your budget, it will help you manage other finances as well.
- Extend your Moratorium period by six or one-year post-graduation to ensure job settlement.
- While you might fulfill an education loan for abroad eligibility in various banks, consider factors like processing fees, application fees, late payments, loan insurance, etc.
- Choose a lender that can provide some condition-based concession like girl-child, scheme, differently abled, etc.
- Opt for a loan with shorter tenure, it may have higher EMIs but you can save a lot of the interest amount.
- Choose the course fee to be paid in instalments to alleviate the burden of interest.
- Start freelancing or opt for a part-time job in your moratorium period itself to save up money and utilize it in the repayment of the loan.
Conclusion: Fulfil Your Dreams Of Studying Abroad With Education Loans
With an education loan for abroad studies from the Indian government and an array of options available with the Indian banks and private institutions, you can easily pursue your dream of studying abroad and shape your future just as you want. It equips you with the power to advance your career and helps you fund your own education. It is an investment of money that will reap benefits all life-long. You can also choose professional career counselling to discuss about education loan and others which will help you as a Indian student in abroad.
FAQ
Yes, there are certain loan providers like Axis Bank who offer 100% loan amount for foreign education loans.
Depending on the type of loan whether non-collateral or collateral, the amount varies from 40 - 45 lakhs for the former and 1 - 1.5 cr for the latter one respectively.
Here’s a list of top banks that offer good education loan interest rates for abroad study:
- ICICI Bank
- Axis Bank
- IDFC Bank
- Georgia
- The State Bank of India
- The Punjab National Bank
- Canara Bank
- The Bank of Baroda
The average rate of interest varies from bank to bank but is more or less around 10 to 12% P.A.
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