Studying abroad is a dream for many in India. Though bright students are everywhere, most are bound by financial issues passed onto them through generations. Education loans have long been securing the career graphs of students over the decades and without educational loans, nearly 26,000 international students in India would have been unable to fulfil their study abroad dreams. In the financial year 2022, the country has disbursed nearly 1,400 crores into student education loans. At this point, with a plethora of options and opportunities at the services of the students and their aspirations, it becomes important to identify what is the best education loan in India, why one would require loans, what other factors are to be considered while taking a loan, and much more.
| Type of Loan | Education Loan |
| Purpose of Loan | Study Abroad |
| Best Indian Bank for Loan | HDFC Bank |
| Lowest Interest Loan (Bank) | SBI |
| Other options | NBFCs |
| General Requirement Time | Higher Studies |
Importance of Education Loan to study abroad
There are a whole lot of pre-departure expenses to study abroad. It is not just the tuition fees of the University but also the living expenses, books, and other miscellaneous expenses that happen when a student relocates to a new country.
It is not easy to be able to survive without an education loan except for students from families who are very well-to-do in life. The decision can ease the student’s economic burden. Better career prospects follow soon after.
So while it is a tough decision to make, it is also worthwhile for the students who had been working so hard for so long. An education loan relieves the students of all the expenses and allows them to focus on receiving new experiences, learnings, and opportunities to explore.
Benefits of Best Education Loans
Not every family is stable enough to support the study abroad dreams of their kids. In such cases, the students can approach banks and other financial institutions, like NBFCs, for student loans. In essence, an education loan is not an investment but an asset. Its worth grows over time.
The student is able to complete their education tension free of the expenses and then set for a great career: job, entrepreneurship, or any other occupation.
Thus, a student loan will help to pay a part of the education-related expenses or an entire set of expenses. Finally, education loans open the horizons of bright students making them brighter and stronger in the path of life.
Best Education Loan In India
Firstly, many people argue that personal loans are way better than student loans or education loans. The main fact that negates this thought is that the interest rate for personal loans is much higher than the educational loans.
Also, in the case of repayment, the allowed time is very less in the case of personal loans. For study abroad purposes, the expenses are much more and the students are not having stable permanent jobs. For these two reasons, parents and students always prefer taking student/education loans over personal loans.
For people looking for the best education loan in India, the Government of India has launched the Comprehensive Educational Loan Scheme while collaborating with two financial organizations: RBI and Indian Banker’s Association (IBA). This scheme allows the banks to sponsor students with loans to any course in India or abroad.
RBI allows banks to give a loan at a rate of 9% to 10% to the students for education while the base rate of the banks varies. Thus, the banks provide education loans with interest rates between 12% to 16%.
Competitive Features of HDFC Education Loan
The best education loan is offered by HDFC Bank. The private bank allows a loan of 20 lakhs and more where the disbursal procedure is painless. The facilities can be pointed out as:
- The student does not have to wait for the offer letter from the University in order to get approval for the education loan. The bank does this so that the student does not suffer a loss of time while waiting for the loan approval.
- Also, the repayment terms are negotiable which makes this education loan a favourite among students.
- The loan also provides Income tax benefits under Section 80(E) of the Income Tax Act of India.
- There are no prepayment charges as well.
- Another great feature of HDFC dedication loans is that the repayment tenure can be a maximum of up to 10 long years.
- HDFC Bank also comes with its NBFC counterpart named Credila which has all these benefits and more for students looking to study abroad.
This is exactly why HDFC provides the best education loan in India. However, if a student is looking for an education loan from a Govt. owned bank then the best education loan in India is from SBI.
However, SBI does have an upper limit for education loans which is 30 Lakhs. The repayment period can be up to 15 years with an interest rate of 15%. In case the student is unable to gain a sanctioned loan from the banks, they can approach NBFCs such as HDFC Credila, Avanse by the DHFL group, International Student Loan Program (ISLP), and Global Student Loan Corporation (GSLC).
Best Education Loan In India: Eligibility Criteria
The following are the eligibility criteria for getting the best education loan in India sanctioned.
- The student or the borrower must be a citizen of India along with the co-applicants.
- Co-borrower(s) must be having a bank account with any bank in India which has cheque-writing facilities.
- Disbursal requires admission confirmation in the University. The loan is sanctioned by the HDFC Bank before the admission happens so that the students are able to plan their expenses.
- Other norms of the bank must be followed from time to time.
Documents Required
The documents required for the students planning to apply for the education loan are different for different profiles. However, the basic documents that are a mandate for securing the loan are given below.
- Admission letter from the institute.
- Educational certificates of completed degrees.
- Photographs.
- Photo ID.
- Residence proof.
- Income proof of the co-applicant(s).
- Bank statements for the last 6 months.
- In the case of collaterals, legal documents will be required.
Procedure to Get Education Loan for Study Abroad
The basic procedure to get an education loan in India to study abroad is mentioned below.
- Check whether the bank caters to the particular institution.
- Keep a handy calculation of the amount you need to take a loan that you can arrange.
- Compare bank loans according to the needs of the student.
- After finalizing the bank, fill out the application form.
- If the loan amount is sanctioned, the bank will provide a loan document.
- The loan will be disbursed on signing and submission of the loan document.
FAQs
Ans. IDBI Bank has a very fast disbursal of education loans that allow students to have a secured and anxiety-free educational tenure. They disburse the loans at the same small time without depending on the loan amount. This is what sets the bank apart from other Indian banks. Again, HDFC Bank provides loans within 4 hours for non-HDFC customers while in just 10 seconds for HDFC customers.
Ans. Bank of Baroda allows a repayment tenure of 15 years which is greater than any other Indian Bank. There is also no collateral charge till a loan of INR 40 Lakhs. Thus, it is one of the best-suited banks for student loans when a student is planning to study abroad in a premium institution.
Ans. The Government of India has allowed for a Central Government Interest Subsidy Scheme that is to support educational aspirants coming from Economically Weaker Sections (EWS) of society in India. However, this is for education in India. For study abroad students the scheme for education loans is Padho Pardesh Scheme. A maximum loan of INR 20 Lakhs can be sanctioned under this scheme for higher education abroad.
Ans. No. There is no zero-interest education loan scheme available from any bans in India. However, students aspiring to study abroad can apply for Government Schemes for some rebates on loans or apply for scholarships as well. Scholarships are largely available from abroad Universities in the UK, USA, Canada, and Australia. Leverage Edu also helps students secure scholarships through our partner banks and financers.
If you are someone looking forward to studying abroad and want to get all your finance-related troubles like bank accounts, international money transfers etc solve, reach out to Fly Finance and ease your study-abroad journey.
