Education Loan for Abroad Studies: Studying abroad can be a life-changing decision, however, this doesn’t come easy. Those who want to pursue higher studies abroad, but finding it difficult to arrange for funds, now have the option to make arrangements for funding their education. In this article, we will cover each and every detail related to education be it the process to apply for a loan, eligibility or documents required for it. We will also cover various other aspects related to student loans like the Indian banks giving student loans or the role of a guarantor. We will cover each and every aspect for all those who are looking for an education loan for study abroad.
Eligibility criteria to apply for the education loan
The first and foremost thing is to check whether you are eligible to apply for an education loan or not. Below provided is the usual criteria which Indian banks follow for checking the eligibility of the loan applicant is:
The applicant should be a citizen of India.
The applicant must have attained the age of 18 else his/her parents will have to take the loan.
The applicant must have a good academic background.
The applicant must have secured admission to a recognized foreign university/institution/college.
The desired course which the applicant is going to study must be a technical or professional one, as banks give preference to job oriented courses.
Quick links to Education Loan Guides for the top study abroad destinations:
What all documents required for applying for Education Loan for Study Abroad?
Before applying for an education loan, the applicant must be completely aware of the documents required to apply for a study loan for abroad. Following documents are required to apply for an education loan for abroad studies:
Filled application form
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
快穿系统女主深吻ho Mark sheet and certificates of the applicant
o Mark sheet (Score Report) of GRE, GMAT, TOEFL, IELTS快穿系统女主深吻h, etc. whichever is applicable
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
In case of collateral (immovable property), it can be flat, home, or non-agriculture land the following documents are required:
o Property title deed
o Building approved plan
o NOC for a mortgage from builder or society
NOTE: These requirements can vary as per the banks’ own regulations.
What is the procedure for getting an education loan for Studying Abroad?
From loan application to approval and disbursement, the entire loan process is time taking, so it is always advisable to apply for a loan a little early. Follow these steps for applying for a student loan:
Check 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.
Shiksha has partnered with India’s topmost and trusted loan providers who will assist you in getting an education loan. Find out more!
Top Education Loans Providers in India for Studying Abroad
快穿系统女主深吻hHDFC Bank is one of the largest private banks offering education loans abroad. The maximum loan amount offered by the bank it up to INR 20 lakhs. In order to avoid the last-minute rush, the bank offers study loans abroad even before the student has secured admission at the university.
State Bank of India
快穿系统女主深吻hSBI offers a maximum amount of INR 30 lakhs as an education loan for studying abroad with a loan margin of 15%. The Interest rate charged on the loan amount is up to 2% on the current base rate of SBI. Further, the loan repayment tenure can be 1 year to 15 years.
快穿系统女主深吻hAxis bank offers study loans abroad at competitive interest rates. A margin of 15% has to be arranged by the borrower if the loan amount exceeds INR 4 lakhs. The bank offers a maximum of INR 20 lakhs and covers different costs like tuition, accommodation, and books.
Punjab National Bank
PNB Udaan is the education loan scheme offered by the Punjab National Bank to students going to study abroad. The bank offers foreign education loans for students going to pursue graduate, post-graduate, job-oriented professional and technical courses. The borrower needs to show a loan margin of 15% for the loan amount of above INR 4 lakhs. Also, the bank offers the base rate as the interest rate on loans taken for pursuing an education at the top 200 universities across the world.
Study Abroad Education Loan from NBFCs (Non-banking financial companies)
快穿系统女主深吻hApart from the nationalized banks, student loans can also be availed from non-banking financial companies/institutions (NBFCs). Non-banking institutions offer complete tuition fees to the 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 loan 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 a period of 10 years.
Avanse: Part of the DHFL group, it is considered as 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 program is specially designed for international students who want to study in the US. Through this program, students can borrow an amount 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.
Some of the loan schemes offered by Indian banks for Studying Abroad
SBI Student Loan Scheme: This scheme can be availed by Indian students who have secured admission in any institute in India or abroad. A maximum of INR 20 lacs can be availed at a nominal interest rate and it has to be repaid within 15 years. Also, if the loan amount is more than INR 7.5 Lacs, then borrowers need to furnish collateral as security. The repayment starts after one year of completion of the course.
SBI Global ED-VANTAGE Scheme: This loan can be availed by Indian students who wish to pursue a full-time course abroad. Students can avail of a loan of up to INR 1.5 crore and have to repay it within a period of 15 years. The borrowers need to provide collateral to secure this loan and will have to start repayment after 6 months of completion of the course.
HDFC Bank Education Loan for Foreign Education:This loan scheme can be availed by Indian students who wish to pursue studies abroad. The maximum amount available in this scheme is INR 20 lacs at a nominal rate of interest. Also, it offers tax benefits to the borrower and it can be sanctioned before admission as well.
Oriental Bank of Commerce Education Loan for Study in India and Abroad: This loan scheme is offered to students who wish to pursue their higher studies in India or abroad. If the student wishes to pursue his studies in the US, then the amount of the loan will depend on the fee structure of the institute they have applied to. The highlight of this scheme is that it does not charge a prepayment penalty from the borrowers and also give insurance coverage as well. The margin for the loan amount exceeding INR 4 Lacs is 15% on the loans taken for studying abroad.
Things to remember while taking an Education Loan for Abroad Studies
Moratorium period: This is the time period during which the borrower need not make any repayment to the bank. This period varies from bank to bank and could last up to sometime after completion of the course.
Loan Margin: Usually, banks do not provide the complete amount i.e. 100 percent money needed to fund the education. The majority of the public sector banks issue 90% of the total amount, the remaining 10% has to be arranged by the aspirant himself.
Effect of Exchange Rate: Always calculate the amount which you will be receiving at the time of disbursement, as any change in the exchange rate can affect the amount you will be receiving.
What is Collateral?
Any property whether movable or immovable, which can be offered to a bank as a security for a loan is collateral. Most Indian banks demand collateral as security in order to reduce the risk involved in paying off the credit. Learn everything about collateral here.
Which type of instruments are accepted as collateral?
快穿系统女主深吻hAny type of liquid assets like bonds, FD, shares or any immovable property like the house, any commercial property or just land can be classified as collateral. One important point to keep in mind is that agricultural land is not accepted as collateral. Even shares, bonds, bank deposits, mutual fund units, gold, debentures, bank deposits, life insurance policy, and government securities, are also accepted as collateral.
How can I get an education loan to study abroad without collateral?
Education loan has come as a big relief to those who want to pursue quality education but face a big challenge while arranging the funds. Now students can avail of a loan of up to INR 4 lacs without collateral. For loans, up to INR 7.5 lacs, parents or guardians are made joint borrower and third party guarantee is obtained. For loan exceeding INR 7.5 lacs property or any other asset is required as collateral.
How much can you borrow against collateral?
If you want to take the loan with your immovable property as collateral, in that case, the bank’s representative will verify your property and prepare a report on whether it can be mortgaged or not.
Also, the bank’s representative will evaluate your property. Based on this report, the loan amount will be approved.
What is the responsibility of a guarantor in an Education loan?
Becoming a guarantor for a loan is a huge responsibility as the guarantor will have a legal obligation to pay in case the borrower defaults on his payment. If the loan amount exceeds INR 4 lacs, then the bank may ask for a guarantee by a third party. If the borrower is not able to repay the loan amount irrespective of the circumstances, in that case, the guarantor holds the liability to repay the complete amount to banks.
Read the agreement carefully
This is one of the most important aspects to look after while taking the loan. We always suggest you go through the terms and conditions of the loan carefully and then move ahead with it. This is one factor we really stress upon, as you should always be clear with all the conditions mentioned in the loan agreement. If you have any doubts regarding anything then always consult the experts apart from the bank representative.
FAQs for foreign education loan
Q. What is the maximum loan amount you can get for studying abroad?
A. As such, there is no limit set by the banks for offering education loans to the students abroad. It depends on the bank to bank. The majority of the banks offer loans maximum up to INR 20-30 lakhs. Also, if the loan amount is more than INR 20 lakhs then the interest rate also increases.
Q. For which type of courses, banks offer education loans for studying abroad?
A. Generally, banks and NBFCs prefer to give loans for undergraduate and postgraduate courses. Also, the majority of banks prefer to give education loans abroad for pursuing job oriented and professional courses.
With a plethora of knowledge of the education domain, Piyush Kohli has been involved with study abroad for over 5 years and counting. He comes with prior experience on the complexities of the study abroad application...Read Full Bio