Education loans have become a popular choice among students aspiring to pursue higher education abroad. Financial management is one of the primary things that hit your mind while planning to study abroad and an education loan definitely contributes to better management. Fly Finance (fly.finance) is a financial services platform that helps students fulfil their financial requirements like education loans, forex cards, international money transfers, and currency exchange. You can get education loans through Fly Finance at the cheapest interest rates starting from 9.25%.

The education loan to study abroad covers tuition fees, accommodation costs, and all the expenses that are not easy to manage for every student without financial support. A lot of government and private banks have dedicated schemes under which they offer education loans to study abroad at affordable interest rates.

Features of Education Loan to Study Abroad by Fly Finance

Education loans for studying abroad secured by Fly Finance will come with various specific features. These features are designed to support students financially with various EMI options. You can use our online EMI calculator to calculate EMI for your education loan. Check some of the features of education loans through Fly Finance:

• The education loan will cover up to 100% cost related to tuition fees, accommodations, and other expenses. Education Loan EMI Calculator
• The process of loan application is completely online and the portal has a user-friendly interface that helps you secure student loan for abroad in a hassle-free manner.
• You only need to fill common application form for all lenders and the best-suited loan offer will be aggregated by Fly Finance.
• You will get a flexible repayment period of up to 15 years.

Fly Finance Loan Partners

Fly Finance has established its partnership with over 10+ banks and NBFCs that include public and private sector banks, and reputed financial institutions. All these institutions have dedicated financial schemes for study abroad loans.

Check the list of partners below before starting your education loan process:

• State Bank of India (SBI)
• Yes Bank
• Union Bank
• ICICI Bank
• Axis Bank
• HDFC Credila
• Avanse Financial Services
• Auxilo
• Prodigy Finance
• MPower Financing

Types of Education Loans Available

Education loans are majorly of two types:

(a) Secured Education Loan, and (b) Unsecured Education Loan.

In the case of a secured education loan, you need to pledge collateral of similar or greater value to the loan amount. Usually, the banks offer low interest rates on secured loans as these loans are less risky. Unsecured education loans do not require any collateral but it comes with a high rate of interest as the risk is high. Unsecured education loans are usually offered by private banks and NBFCs. Government or public sector banks offer unsecured education loans up to a limited amount. Let’s understand the type of education loans in detail below.

Secured Education Loan

As per the guidelines issued by the Reserve Bank of India, students can get collateral-free education loans for abroad of an amount up to INR 4 lakh. Education loan amounts exceeding INR 4 lakhs and up to INR 7.5 lakhs require a third-party guarantee which is considered as a security against the loan. Any amount above INR 7.5 lakh will require a tangible collateral i.e. land, flat, or any other tangible asset. Banks may demand security valued at up to 125% of the total loan amount.

Unsecured Education Loan

An unsecured education loan doesn’t require any kind of collateral. Mostly, private banks and NBFCs provide unsecured education loans of higher amounts based on the income of the applicant or co-applicant, whichever is applicable. You also need to have a good credit score of 700 and above. Timely repayment and limited credit use will improve your credit score. Unsecured loans can be obtained easily by showing the net monthly income only. However, the interest rate is higher in an unsecured education loan because the lending institution considers the applicant as a more risky borrower. You can get an unsecured education loan of up to INR 4 lakhs without any collateral or guarantor.

Eligibility Criteria for Education Loan

Every bank or financial institution prescribes basic eligibility criteria for an education loan to study abroad. It is suggested to check the individual eligibility criteria before proceeding with the education loan application.

Check some of the common education loan eligibility below:

• The student and the co-applicant must be an Indian citizen.
• The minimum age of the applicant should be 18 years.
• The student must have secured admission to a university abroad.
• The academic record of the student must be good.
• The selected course should be a technical or professional/vocational (job-oriented) course.

How to Apply for an Education Loan?

A lot of public sector and private banks in India offer education loans to study abroad under various schemes. The government of India and the state governments have launched various schemes to provide education loans to study abroad at low interest rates. Some of the major banks providing education loans to study abroad are State Bank of India, Bank of India, Bank of Baroda, Punjab National Bank etc. Several dedicated portals such as the Vidya Lakshmi Portal, and Jansamarth Portal are available for education loans.

Check out some of the steps to apply for an education loan:

• Visit the official website of the bank or lending institution.
• Go to the personal banking page and click on education loan.
• Check the features and eligibility mentioned by the bank.
• Fill out the application form and submit the same along with supporting documents.
• Wait for the verification process and approval from the lender.

Note: The above-mentioned steps are general and indicative. The actual steps may differ from the above depending on the operations of the bank or the lending institution.

Documents Required for Education Loan to Study Abroad

The documents required for an education loan depend upon various factors such as type of loan, lending institution, loan amount etc. Always check properly the list of documents asked by the lender and keep all such documents handy.

Check the list of documents required for an education loan to study abroad:

Education Loan Interest Rate

While taking an education loan, it is very important to check and compare the interest rates. Usually, the secured education loan comes with a lower interest rate and unsecured loans have a higher rate of interest. One of the most important factors which is necessary to understand is the nature of education loan interest rates.

Most of the government banks in India offer education loans on a floating interest rate i.e. the interest rate will be revised every quarter. In a rising interest rate or high inflation environment, the rate of interest on your loan will get higher.

• Always try to take an education loan with a fixed interest rate as it will not change depending on the economic scenario.
• Try to negotiate with your bank over interest rates when you are taking a large amount of education loan.
• Always go through all the terms and conditions properly and find the best-suited offer for you.

Education Loan Repayment

Education loan repayment is one of the most important things to understand before taking an education loan. Most of the banks in India offer a maximum repayment period of up to 15 years which will help you to get a lower EMI amount. However, the longer repayment period often makes the loan costly as you will have to pay interest rates for a longer period.

For education loan repayment, the bank will also provide you with a moratorium period during which the simple interest will be charged and it will be added to the total loan amount when you start repaying the loan. The bank also charges a foreclosure fee i.e. early repayment charges on education loans if you close the loan before the stated repayment period.

Education Loans Offered by Major Banks

The public sector banks in India provide overseas education loans under various schemes in line with the guidelines issued by RBI. You can get up to INR 1.5 crore education loan to study abroad subject to the eligibility criteria and terms and conditions. Check some of the leading banks providing education loans under various schemes:

SBI Global Ed Vantage Loan Scheme

State Bank of India (SBI) is the largest public sector bank in India. The bank has a dedicated scheme for study abroad education loans i.e. SBI Global Ed-vantage Education Loan. Under this scheme, the bank offers loans up to INR 1.5 crores based upon the requirements. Check some of the major features of SBI Education Loan below:

• The bank will offer you a maximum repayment period of up to 15 years.
• You can claim tax benefits under section 80 (E) of the Income Tax Act.
• You can get an education loan from SBI for pursuing regular Graduate, Post Graduate, or Doctorate Courses in any stream offered by foreign Universities in the USA, UK, Canada, Australia, Europe, Singapore, Japan, Hong Kong and New Zealand.
• The bank will charge a processing fee of INR 10,000 per application.
• Any tangible security offered by the applicant, co-applicant or third party will be accepted as collateral for the loan.
• The interest rate on the SBI Education loan will be 11.15% (floating rate) and a concession of 0.5% in interest rate will be provided to the female students.

BOI Star Education Loan

Bank of India (BOI) Star Education Loan is available for students who want to pursue a regular full-time undergraduate or postgraduate program from a reputed foreign university. You can get an education loan of up to INR 150.00 Lakh for Medical courses excluding Nursing and non-medical courses. The bank will provide you with need-based finance to meet expenses, subject to earning potential after completion of the course. Check some of the major features of BOI Star Education Loan below:

• No margin money is required for an education loan up to INR 4 lakhs.
• Agricultural land will be accepted as collateral subject to the state laws.
• The interest rate for the BOI Star education loan will be 1-year RBLR + 2.5%.
• The bank will provide a moratorium of course duration + 1 year, and you can get a total repayment period of up to 15 years.

Baroda Scholar Loan by Bank of Baroda

The Bank of Baroda is one of the most preferred banks for study abroad education loans. It has a strong track record in providing loans and has a dedicated scheme for the same i.e. Baroda scholar loan. Under this scheme, the bank provides education loans of up to INR 1.5 crore covering tuition fees, accommodation fees, and other important expenses. Check the major features of the Baroda Scholar Loan.

• The processing charge on the loan will be 1% (Max. 10,000/-) and will be recovered upfront for the Loan above Rs. 7.50 Lakh and will be refunded after the first disbursement.
• The bank will not charge any processing fee for education loans up to INR 7.5 lakhs.
• You can get collateral-free loans up to INR 7.5 lakh, and the bank will also provide a free debit card along with the loan.
• The Baroda Scholar Loan interest rates start from 9.70%.

PNB Udaan Education Loan to Study Abroad

PNB Udaan Scheme is a dedicated study abroad education loan scheme launched by the Punjab National Bank. The scheme was launched with the aim to provide financial assistance to meritorious students who want to study abroad. PNB Udaan Education Loan will cover expenses like tuition fees, accommodation costs and other important expenses like the cost of purchasing laptops, bikes, laboratory equipment etc. Check some of the major features of the PNB Udaan Education Loan Scheme:

• The PNB Education Loan is provided to the students for pursuing Diploma and certificate courses.
• The program must be other than aeronautical, pilot training, shipping, etc.
• The value of the collateral for the education loan shall be 125% of the total loan amount.
• If you have already paid the fees with your own money, it will be reimbursed by the bank after taking the education loan. However, the reimbursement shall be claimed within six months of paying the fee.
• PNB Education Loan interest rate starts from 10.5%. The interest rate may vary depending on the market rates set by the RBI. It is calculated based on the RLLR+BSP+ 1.50%.

Union Education Premier Abroad Loan by Union Bank

The Union Bank of India is one of the leading public sector banks in India with a strong track record in providing education loans to study abroad. The Special Union Education Loan Scheme for Abroad Studies (Union Education Premier Abroad) has been launched by the bank to help meritorious students aspiring to study in a foreign university. Check some of the major features of Union Bank Education Loan to study abroad:

• The bank provides education loans to study full-time Postgraduate Courses in the Premium University Abroad.
• You can get a maximum loan amount of INR 1.5 crore to study abroad based on your requirements.
• You will be required to pay INR 10,000 as a processing charge to the bank while taking an education loan.
• The bank will also provide you with a moratorium of course period + 1 year, and the repayment period is up to 15 years.

Education Loan Refinance

Are the Interest rates rising on your education loan? Education Loan Refinance is an important financial tool which you can use if you want to change your lender. Let’s understand this with an example thereafter check all the details about how to apply for an education loan refinance Ramesh has an ongoing education loan of INR 20 lakhs with ABC Bank. Due to the rise in inflation, the interest rate was revised and increased by 3%. Ramesh came across an offer by XYZ Bank which was offering education loans at a fixed rate of interest. When he compared both the interest rates he found that XYZ Bank is offering loans at a lower interest rate as compared to ABC Bank. He then went to XYZ Bank and asked to take over the loan from ABC Bank.

• Here, XYZ Bank will pay ABC Bank for the pending loan amount.
• Ramesh will be paying a new and revised EMI to XYZ Bank, and now he has nothing to do with ABC Bank.
• In this way, the education loan of Ramesh was transferred from ABC Bank to XYZ Bank, and now he will pay the loan to the new lender, i.e., XYZ Bank.

Curious about the credit score while getting a loan refinance? Check out all the details about the Impact of Credit Scores on Education Loan Refinance

Courses Eligible for Education Loan

Banks provide education loans to study abroad only to students applying for courses that are job-oriented. This means that those courses should anticipate employment and career growth. This includes full-time undergraduate degree programs, postgraduate degree programs, PhD courses, and professional diploma programs.

The detailed list of courses eligible for education loans are-

• STEM courses (Science, Technology, Engineering, and Mathematics).
• Non-STEM Courses like Management, Finance, Luxury, Fashion, and other subjects.
• Undergraduate degree and Diploma courses (B.A, B.Com, B.Tech, B.Sc, B.B.A, B.E, B.M.S, B.Ed, L.L.B, M.B.B.S, and others).
• Postgraduate degree and Diploma courses (M.A, M.Com, M.Tech, M.Sc, M.B.A, M.Ed, M.D, M.F.A, M.Phil, and others).
• PhD and Doctoral Programmes.
• Certified job-oriented Diploma courses like Engineering, Agriculture, Veterinary Courses, Teaching, Nursing, and others.
• Degree/ Diploma in Army, Navy, or Air-Force Training courses.
• Degree/ Diploma in Aeronautics or any other relevant Pilot Training courses.