Abroad In 2024: How To Get An Education Loan For Studying

Abroad In 2024: Studying abroad can significantly enhance career prospects by providing access to top-notch education diverse cultural experiences and valuable global networks. For students who plan their academic journey thoughtfully attending prestigious universities overseas can lead to exceptional job opportunities. the high cost of foreign education can be a challenge. Students often seek scholarships or consider education loans to finance their studies. In India various banks offer education loans with interest rates typically ranging from 8.5% to 16%.

These loans can cover a wide range of expenses including tuition fees, accommodation, books, equipment, uniforms and computers. It’s advisable for students to look for loans that do not require collateral to ease the financial burden.

Steps to Get an Education Loan

Probably, most of you are going to borrow a loan for the first time and have less information about the process of borrowing an education loan for abroad studies. So, to help you we have mentioned a road map of getting student loans from banks.

• Understand your needs first (How much amount you need to finance your studies)
• Compare loan schemes and select 2 or three schemes for you.
• Check the eligibility to apply for an education loan.
• Now arrange the documents you need to submit with the education loan application.
• Apply for student loans offered by Banks and NBFCs.
• Bank will verify your documents and after completing the verification the bank will disburse your amount.

Documents Required for Education Loan to Study Abroad

Before applying for an education loan the applicant must be completely aware of the documents required toapply for a study loan abroad. The following documents are required to apply for an education loan for abroad studies:

• Filled bank application form to get a study loan for abroad studies.
• Photographs: Passport-size photographs of the applicant and the co-applicant.
• Photo ID: Photo ID of the applicant and the co-applicant. It can be a PAN card, driving license, Voter ID card, Aadhar Card or Passport.
• Residence proof: Resident proof of the applicant and the co-applicant
• Academic documents:
  • Mark sheet and certificates of the applicant
  • Mark sheet (Score Report) ofGRE,GMAT,TOEFL,IELTS etc. whichever is applicable (The total academic standing and professional experience in addition to the GRE score are important considerations when applying for a loan).

• Admission proof: Admission letter shared by the university or college.
• Bank statements: Last six months bank statements of the co-applicant
• Income proof: Income proof of the co-applicant (A foreign education loan can be obtained depending on a number of variables including the financial situation location and assets of your co-applicant).
• In the case of collateral (immovable property) it can be flat home or non-agriculture land the following documents are required:
  • Property title deed
  • Building approved plan
  • NOC for a mortgage from a builder or society

Interest Rates of Banks for Student Loan for Abroad Studies

The interest rates of different prominent banks in India for study-abroad education loans are given below:

How to Apply for an Education Loan?

From loan application to approval and disbursement the entire loan process is time-consuming so it is always advisable to apply for a loan a little early. Follow these steps for applying for a student loan:

• Check whether the course in which you are going to study is recognized by the banks or not.
• Figure out how much loan amount you require and how much you are going to arrange on your own.
• Compare the student loanprovided by different banks for studying abroad and go for the one that caters best to your needs.
• After finalizing the bank and the loan amount fill out the loan application form and approach your bank.
• As soon as your loan is approved the bank will issue a loan document that includes various elements of the loan.
• After signing the loan document the bank will disburse the amount in instalments or as asked by the university.

Top Education Loans Providers in India for Studying Abroad

Several banks and NBFCs offer overseas education loans to eligible students. Here are some popular options:

HDFC Bank

HDFC Bank is one of the largest private banks providing education loans for studying abroad. They offer loans up to INR 20 lakhs and allow students to apply even before securing admission helping to avoid last-minute rushes.

ICICI Bank

ICICI Bank offers education loans of up to INR 1 crore for international courses with interest rates starting at 9.50% per annum. They accept fresh property to fixed deposits and cross-collateralization with existing mortgage loans as collateral. For those seeking unsecured loans the limit is INR 20 lakhs for undergraduate courses and INR 40 lakhs for postgraduate courses.

State Bank of India (SBI)

SBI provides education loans for studying abroad with a maximum limit of INR 30 lakhs and a loan margin of 15%. The interest rate is capped at 2% above SBI current base rate. Loan repayment terms can range from 1 to 15 years.

Axis Bank

Axis Bank offers competitive interest rates on study loans for abroad. If the loan amount exceeds INR 4 lakhs borrowers must arrange a margin of 15%. The maximum loan amount available is INR 20 lakhs covering expenses such as tuition accommodation and books.

Punjab National Bank (PNB)

PNB offers the Udaan education loan scheme for students pursuing graduate, postgraduate or professional courses abroad. For loans above INR 4 lakhs a margin of 15% is required. The interest rate is set at the base rate for students attending the top 200 universities worldwide.

These options can help students finance their education abroad and achieve their academic goals.

Student Loan For Abroad Studies from NBFCs (Non-banking financial companies)

Apart from the nationalized banks student loans can also be availed from non-banking financial companies/institutions (NBFCs). the Non-banking institutions offer complete tuition fees to students. Borrowers need to provide collateral as security to the banks as the loan amount is generally more than INR 7.5 Lacs. Students looking for education loans for abroad studies can now have the option to secure a loan from NBFCs. Some of the NBFCs options are:

• Credila:Credila is part of the renowned HDFC bank and provides loans to Indian students wishing to study abroad. The loans are given at a competitive floating rate of interest and can be repaid within 10 years.
• Avanse:Part of the DHFL group it is considered one of the most popular non-banking financial institutions in India. Student loans from Avanse cover tuition fees up to 100% and other expenses. Apart from this the interest rates are floating and the processing fee can go up to 1 to 2 percent of the loan amount.
• International Student Loan Program (ISLP):This programme is specially designed for international students who want to study in the US. Through this programme, students can borrow an amount of as little as $1500 and can extend the repayment period up to 25 years. The loan disbursed under this program covers tuition fees and other expenses.
• Global Student Loan Corporation (GSLC):The GSLC offers loans to international students to pursue their higher studies in the US without the requirement of any co-signer.

Advantages of Education Loan For Abroad Studies

There may be times when the family’s income and resources are insufficient to cover the cost of the student’s education. In such cases, banks or other financial organisations must be approached for a student loan (NBFC). You can use a student loan to pay for all or part of your education expenses. A student who takes out a study abroad education loan is guaranteed to be able to complete their degree programme without encountering any financial issues. Here are the point-wise benefits of borrowing a student loan for abroad studies:

• Financial Flexibility without breaking the bank:Education loan helps pay the total fees and cover other expenses without going bankrupt.
• Covers a wide range of expenses:A student loan for abroad studies can cover various costs including university tuition fees accommodation & living expenses and etc.
• Flexible repayment terms:Banks offer flexible repayment options or moratorium period to repay the student loan.
• You can claim tax benefits:The least known benefit is you can claim tax benefits. This will significantly reduce your taxable liability.
• Built impressive credit report:This benefit will help you in the future when you knock on the door of a bank to borrow other loans.

Loans are frequently seen as bad debt. This expression implies that you are borrowing money for something whose value will diminish over time. An education loan is unique from other forms of loans since it is an investment in the borrower. Through this, you will eventually make far more money than you borrowed.

Eligibility for Education Loan in India

The first and foremost thing is to check whether you areeligible to apply for an education loanor not. Provided below are theeducation loan eligibility in Indiaand the general conditions that are usually followed by any bank in the process of granting an education loan. Kindly note that individual banks could have their eligibility guidelines which would have to be adhered to when applying to that particular bank.

• The candidate must be an Indian national.
• If the applicant is under 18 years old then his or her parents will have to take out the study loan for abroad studies.
• The candidate must have a strong academic record.
• The candidate must have been accepted to a reputable overseas university, institution or college.
• Since banks favour courses that are job-oriented, the applicant’s chosen course must be technical or professional in nature.
• Underwriting norms are the standards set out by loan providers to guarantee that only safe and secure loans are made available. They are also important as they are used to determine whether or not to provide a person with a study loan for overseas study as well as how much money the firm is prepared to loan and at what interest rate.

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