Studying abroad is an exciting and life-changing opportunity for Indian students. However, the cost of tuition fees, living expenses, and other related expenditures can be overwhelming. Understanding how to get education loan for abroad studies will help you to secure funds properly. Education loans are an excellent option to finance your studies abroad. In this blog, we’ll guide you through the process of getting an education loan for studying abroad, the best options available, and tips for securing approval.
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How to Get Education Loan for Abroad Studies?
To get an education loan for studying abroad, start by researching banks or financial institutions that offer such loans. Compare their interest rates, repayment terms, and loan limits. Prepare essential documents, including proof of admission, academic records, income proof, and collateral (if required). Approach your preferred lender with a well-detailed application. Many banks require a co-signer, typically a parent or guardian. Once your application is reviewed and approved, the loan amount is disbursed, often in instalments, directly to the university or your account.
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Step-by-Step Process to Get an Education Loan for Abroad Studies
To secure an education loan for studying abroad, start by researching various schemes like SBI education loan scheme, HDFC, and ICICI Bank to compare interest rates, loan amounts, and other terms and conditions. Check your eligibility, including age, academic record, and admission to a recognized university abroad. Gather essential documents, such as your admission letter, ID proof, academic records, and financial details of your co-applicant. Choose a loan amount that covers tuition, living expenses, and travel costs. Check all the details of the steps involved in getting an education loan for overseas studies.
Research Your Loan Options
The first step in applying for an education loan is researching the available options. There are several banks and financial institutions in India that offer education loans for studying abroad. Try to find out schemes providing education loan without collateral. Some of the major banks for study abroad loans are as follows:
- State Bank of India (SBI)
- HDFC Bank
- ICICI Bank
- Axis Bank
- Punjab National Bank (PNB)
Each lender has different loan terms, interest rates, and eligibility criteria, so it’s crucial to compare these before making a decision.
Check Your Eligibility
While requirements may vary between lenders, the general eligibility criteria for education loans for abroad studies are as follows:
- Age: Typically between 18-35 years.
- Nationality: Must be an Indian citizen.
- Admission: You must have secured admission to a recognised university or institution abroad.
- Co-applicant: A co-applicant, usually a parent or guardian, is required to apply for the loan.
- Academic Record: Lenders often look at the applicant’s academic performance in previous studies, especially for undergraduate and postgraduate courses.
- Loan Amount: Banks may offer loans up to INR 1.5 crore (depending on the university and course).
Loan Amount and Coverage
Education loans for studying abroad typically cover tuition fees, living expenses, travel expenses, and even the cost of study materials. The loan amount can range from INR 20 lakhs to INR 1.5 crore or more, depending on the country, course, and the applicant’s eligibility.
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Understand the Interest Rate and Repayment Terms
Interest rates on education loans for abroad studies vary based on the lender, with rates ranging from 9% to 15%. It is advisable to go for loans with lower interest rates but also look at other factors such as the processing fee, moratorium period, and prepayment options.
Repayment terms are usually flexible, with a moratorium period (the time when repayment is not required) during the course and a few months after completion. After this period, you can repay the loan in instalments.
Prepare Your Documents
You will need several documents to apply for an education loan for studying abroad. These may include:
- Admission Letter: A confirmed offer letter from a recognized university.
- Identity Proof: Passport, Aadhaar card, etc.
- Proof of Academic Records: Marksheets, transcripts, and certificates.
- Co-applicant’s Financial Documents: Income proof, bank statements, income tax returns.
- Collateral Documents: Some banks may require collateral for loans above a certain amount. This could be in the form of property, fixed deposits, or a bank guarantee.
Apply for the Loan
Once you have completed all your research and have your documents ready, you can apply for the loan either online or by visiting the bank or financial institution’s nearest branch. Some banks offer a pre-approved loan facility for students, which can speed up the process.
Loan Sanctioning and Disbursal
After submitting your application, the bank will assess your eligibility and the documents provided. If everything is in order, the loan will be sanctioned, and the funds will be disbursed either directly to your university or to your account (for personal expenses). This process can take anywhere from a few weeks to a couple of months, so it’s important to apply well in advance.
Why Do You Need an Education Loan for Studying Abroad?
The cost of studying abroad has risen considerably in recent years. Students pursuing higher education in countries like the US, Canada, the UK, Australia, and Germany face hefty tuition fees, accommodation costs, and other living expenses. Many students and their families are turning to education loans as a means of financing their education, ensuring that financial constraints do not hinder their dreams of studying abroad.
An education loan for studying abroad is a great way to finance your overseas education. With the right research and preparation, Indian students can secure loans that cover their tuition fees, living expenses, and more. Check some common FAQs on how to get education loan for abroad studies below:
FAQs
An education loan is a financial aid provided by banks or financial institutions to cover tuition fees, living expenses, travel costs, and other related expenses for students pursuing higher education abroad.
Indian citizens aged 18-35 with admission to a recognized foreign university or institution can apply. A co-applicant (parent or guardian) and a good academic record are usually required.
Most education loans cover tuition fees, accommodation costs, travel expenses, study materials, and in some cases, health insurance and equipment costs.
Popular banks include State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank, and Punjab National Bank (PNB). Each offers different loan terms, so comparison is essential.
You need an admission letter, identity proof, academic records, co-applicant’s financial documents, and collateral documents (if applicable) to apply.
The loan amount depends on the lender, university, and course but typically ranges from INR 20 lakhs to INR 1.5 crore or more.
Interest rates vary between 9% and 15%, depending on the bank and the borrower’s profile. Compare lenders to find the best rate.
Collateral is usually required for loans above INR 7.5 lakh. It can be in the form of property, fixed deposits, or bank guarantees.
Loan approval can take a few weeks to a couple of months. Applying well in advance ensures you meet your university’s deadlines.
Repayment typically begins after the moratorium period, which includes the course duration and an additional 6-12 months post-course completion.
To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
