Best Education Loan for Abroad Studies
Table of Contents[Show]
- Education Loan for Foreign Studies
- Best Education Loan Providers for Abroad Studies
- 7 Benefits of Availing of an Education Loan for Abroad
- Eligibility Criteria for a Student Loan for Abroad
- Documents Required to Apply for an Education Loan in India for Study Abroad
Step into the world of boundless opportunities! Delve into the exciting realm where we unravel the secrets of obtaining financial wings for your international dreams.
Join us on this thrilling journey as we navigate the application process, unveil the eligibility criteria, and uncover the essential documents required for your Education Loan for Studying Abroad.
Gear up to empower yourself with the knowledge you need to secure the much-needed financial support for your exceptional overseas education!
Education Loan for Foreign Studies
“Investing in knowledge yields the greatest returns", especially when acquired from a top-tier university. However, the cost of studying at prestigious institutions, especially overseas, can be daunting.
Education loans for abroad studies help all students achieve their dream of studying at the best universities worldwide. With numerous banks and lenders offering such loans, choosing the right one can be challenging.
Best Education Loan Providers for Abroad Studies
Moving further let us identify which are the best providers for your education loan for abroad studies by the Indian government banks, private sector, and lenders.
Best banks for education loans for abroad studies
Public and private banks provide students with competitive advantages for loans for study abroad. However, few of the best banks and their highlights have been mentioned below:
SBI provides education loans for postgraduate degrees in job-oriented courses in countries like Italy, the United States, the United Kingdom, Canada, etc. The education loan for abroad studies in SBI covers tuition, books, travel, and more.
Highlights of SBI education loan for abroad:
- Loans up to Rs. 1.50 crore, with a minimum of Rs. 7.50 lacs.
- Repayment through EMI up to 15 years with tax benefits under 80(E).
- Moratorium period of 6 months after course completion.
HDFC Bank offers student loans for studying abroad, covering tuition fees, travel, accommodation, and other expenses. The loans come with competitive interest rates and flexible repayment options.
Highlights of HDFC Bank education loan for abroad:
- Quick and hassle-free loan approval process
- The loan amount is customized according to the borrower's requirements
- Tax benefits are available on the interest paid under Section 80(E) of the Income Tax Act
Axis Bank is certainly the best bank for education loan for abroad studies, offering hassle-free loan coverage for technical, professional, and career-oriented courses, with no maximum loan amount. The loan can cover up to 100% of the study cost, including fees, books, living, and travel expenses.
Highlights of Axis Bank education loan for abroad:
- No margin for loans up to Rs. 4,00,000.
- 15% margin for loans up to Rs. 4,00,000 for studying abroad.
- Disbursement within two days after loan sanction.
Punjab National Bank
PNB Udaan is a special education loan scheme by Punjab National Bank for Indian students with excellent academic records planning to study abroad. The loan covers a wide range of courses and expenses, including university fees, travel, exam, lab, and book fees. The repayment period is up to 15 years, with no prepayment charges.
Highlights of PNB Udaan education loan:
- Fees reimbursement is considered on individual merits if paid within 6 months.
- No margin for loans up to Rs. 4 lakhs, and a 15% margin for loans above Rs. 4 lakhs.
- No payment charges.
Bank of Baroda
Bank of Baroda offers the Baroda Scholar Loan for MBA, MCA, MS, and other recognized courses promoting employment generation abroad. Loan limits are up to Rs. 80 lakhs for specified institutes and Rs. 60 lakhs for non-specified institutes.
Highlights of Bank of Baroda education loan for abroad:
- Processing fees: 1% (Max Rs. 10,000) for loans above Rs. 7.5 lakhs; no fees for loans up to Rs. 7.50 lakh.
- No margin for loans up to Rs. 4 lakhs.
- Repayment tenure: Up to 10 years for loans up to Rs. 7.5 lakhs and up to 15 years for loans above Rs. 7.5 lakhs.
Canara Bank education loan covers a wide range of expenses for Master's degrees in STEM courses abroad. It requires a co-borrower and 100% collateral security for loans above Rs. 7.5 lakhs.
Highlights of Canara Bank education loan for abroad:
- Repayment tenure: Up to 15 years.
- Security: Not required for loans below Rs. 4 lakhs; tangible collateral security is needed for higher amounts.
- Interest rates vary based on collateral security
IDBI education loan for abroad studies covers various expenses like university fees, travel, exams, and more, with no security required for loans below Rs. 4 lakhs.
Highlights of IDBI Bank overseas education loan:
- Attractive interest rates: Up to 7.5 lakhs - 9%, above 7.5 lakhs - 9.5%, 0.5% concession for female students.
- Maximum loan amount: Up to Rs. 30 lakhs.
- Maximum of 15 years after the moratorium period.
Federal Bank offers education loans for higher education, excluding vocational training or skill development programs, both in India and abroad. The Special Vidya Loan supports meritorious students in pursuing their educational aspirations.
Highlights of Federal Bank education loan:
- No security is required for loans up to 4 lakh rupees.
- Speedy loan approval process.
- Loan amounts of up to 20 lakhs
Union Bank of India
The Union Bank of India provides education loans for technical, higher, or professional education in India or abroad. Co-applicant must be Indian citizens and can be parents, spouses, in-laws, guardians, or close relatives. The loan covers various expenses, except for overseas Diploma courses.
Highlights of Union Bank of India education loan:
- Flexible loan amount based on need and account margin norms.
- Repayment period of up to 15 years after the course and moratorium period.
In addition to nationalized banks, students can also obtain study-abroad education loans from Non-Banking Financial Companies (NBFCs). NBFCs offer loans covering complete tuition fees, with collateral required for amounts above INR 7.5 lakhs. Some popular NBFC options include:
- Avanse: A popular non-banking financial institution under the DHFL group, offering student loans covering up to 100% tuition fees and other expenses with floating interest rates and a processing fee of 1 to 2 percent.
- Credila: Part of HDFC bank, it provides competitive floating interest rate loans with a repayment period of up to 10 years.
- International Student Loan Program (ISLP): Designed for international students studying in the US, offering loans starting from $1500 with repayment periods of up to 25 years covering tuition fees and other expenses.
- Global Student Loan Corporation (GSLC): Provides loans to international students studying in the US without the need for a co-signer.
Loan Schemes Offered by Banks
Indian banks offer various loan schemes for studying abroad:
- SBI Student Loan Scheme: Available for Indian students studying in India or abroad, offering up to INR 20 lakhs with a nominal interest rate and repayment within 15 years. Collateral is required for amounts exceeding INR 7.5 lakhs.
- SBI Global ED-VANTAGE Scheme: For full-time courses abroad, students can avail up to INR 1.5 crore with repayment within 15 years. Collateral is necessary, and repayment starts after 6 months of course completion.
- HDFC Bank Education Loan for Foreign Education: Designed for Indian students pursuing studies abroad, the HDFC education loan for abroad studies scheme offers up to INR 20 lakhs at a nominal interest rate with tax benefits and pre-admission sanction.
- Oriental Bank of Commerce Education Loan for Study in India and Abroad: Available for higher studies in India or abroad, with a loan amount depending on the institute's fee structure. No prepayment penalty and insurance coverage included. The margin for amounts exceeding INR 4 lakhs is 15% for studying abroad.
7 Benefits of Availing of an Education Loan for Abroad
Want to learn what are the best benefits of availing education loans for studying abroad? We have listed down the 9 unmatchable benefits you could gain by choosing to apply for an education loan for foreign studies:
- Lower interest rates compared to personal loans, with an additional 0.5% concession for female students from Government banks.
- The moratorium period, allows students to start repayment after course completion.
- Education loans for studying abroad cover a wide range of expenses, including tuition fees, travel, accommodation, living expenses, and other educational necessities.
- Education loan interest subsidy schemes by The Government of India offer benefits like waived interest during the moratorium period, and repayment of EMIs starting after the moratorium period.
- Claim tax exemption on the interest paid under Section 80E of the Income Tax Act.
- Helps build your CIBIL score by ensuring timely EMI repayments.
- You don't need to liquidate valuable assets, instead can hold them as security for banks to grant loans.
Eligibility Criteria for a Student Loan for Abroad
Before applying for an education loan, it's crucial to check your eligibility based on general terms and conditions typically followed by banks. Keep in mind that individual banks may have specific eligibility guidelines that you must adhere to while applying.
The minimum eligibility for a study loan for abroad includes:
- The candidate must be an Indian national.
- If the applicant is under 18 years old, parents will have to take out the loan.
- The candidate must have a strong academic record.
- The candidate must have been accepted to a reputable overseas university, institution, or college.
- The chosen course must be technical or professional in nature, as banks prefer job-oriented courses.
- Underwriting norms are followed to ensure safe and secure loans are provided, determining loan approval, amount, and interest rate.
Documents Required to Apply for an Education Loan in India for Study Abroad
Moving further now that you have learned through the benefits and eligibility requirements let us delve into the documents required to apply for an education loan for studying abroad.
- Filled application form
- Passport-size photographs of the applicant and co-applicant
- Photo ID of the applicant and co-applicant (PAN card, driving license, Voter ID, Aadhar Card, or Passport)
- Residence proof of the applicant and co-applicant
- Academic documents:
- Mark sheets and certificates of the applicant
- Score reports of standardized tests like GRE, GMAT, TOEFL, IELTS (if applicable)
- Admission letter from the university or college
- Last six months' bank statements of the co-applicant
- Income proof of the co-applicant
- Collateral documents (if applicable):
- Property title deed
- Building approved plan
- NOC for a mortgage from a builder or society for an immovable property like a flat, home, or non-agricultural land
Application Process for Study Loan for Abroad
Now that you are equipped with the documentation and other requirements for student loans for studying abroad. Moving further let us learn about the process of applying for Foreign Education Loans:
- Step 1: Check your loan eligibility online: Begin by assessing if you meet the loan requirements to proceed with the application.
- Step 2: Get expert loan counseling: Seek guidance from loan experts to compare various options and choose the best-suited one.
- Step 3: Select a lender and apply online: Choose a suitable lender and fill out the online application form.
- Step 4: Get your customized education loan document checklist: Receive a tailored list of required documents for your loan application.
- Step 5: Submit the required documents: Either submit the necessary documents online or arrange for a representative to collect them from your home.
- Step 6: Property & legal evaluations (for secured loans): If your loan requires collateral, complete property evaluations, and other legal formalities.
- Step 7: Get the loan sanction letter: Once your education loan is approved, you will receive a loan sanction letter from the lender.
How to select the best education loan in India for study abroad?: Things to be considered
By carefully considering a few factors, you can save up to 5-6% on the overall cost of the loan. To choose the best overseas education loan, consider these factors:
- Interest Rate: Even a 1% difference in the education loan interest rate for abroad study can significantly impact the overall cost of the loan.
- Repayment Holiday/Moratorium Period: Look for loans that offer a moratorium period, giving you relief from repayments while studying abroad.
- Tax Rebate: Check for tax benefits on interest paid, as it can result in substantial savings.
- Margin Money: Find out the amount you need to pay from your pocket; a lower or 0% margin is preferable.
- Hidden Fees: Watch out for hidden charges like forex margin, processing fees, credit life insurance costs, and mandatory cross-selling.
- Interest Rate in Different Currencies: Evaluate the impact of choosing a loan in INR or another currency.
Education Loan for Abroad Studies: Secured Loan Vs Unsecured Loan
We also realize you would be having a doubt about which loan could be a better option among the secured and unsecured types. So as we have listed down the comparison, for you to make an informed decision regarding your student loans for studying abroad.
|Particulars||Secured Education Loan||Unsecured Education Loan|
Requires collateral (e.g., immovable property, FD, Insurance Policy)
No collateral required
Lower interest rate
Higher interest rate (usually 1.5% - 4% higher than secured loan)
High approval chances
Lower approval chances without collateral
Longer repayment period
Comparatively shorter repayment period
Higher loan amounts can be availed
Lower loan amount
Repayment During Study Period
No repayment during the study period
Some repayment during the study period
Not required for approval
Is required for approval
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In conclusion, education loans for studying abroad offer vital financial support for students pursuing higher education overseas. Education loans for studying abroad offer flexible repayment options, coverage of various expenses, etc enabling students to fulfill academic aspirations and open doors to global opportunities, fostering personal and academic growth.
Want to experience the thrilling adventure of studying abroad experiences? GetGIS assistance is all you need. Our experienced team will be your trusted companion throughout your study abroad journey, providing all the support and guidance you need for this life-changing experience.
Useful Links: For Further Reads
- Cheapest Country To Study Abroad For Indian Students
- Top 10 Exams to be written to study abroad
- Ultimate Guide on How To Study Abroad on a Budget
- How To Study Abroad Without IELTS for Indian
Frequently Asked Questions
Which banks provide the most affordable education loans for studying abroad?
Can I apply for multiple education loans from different banks for studying abroad?
How is the interest rate calculated for an education loan for abroad studies?
Are there any additional charges or hidden fees associated with education loans for studying abroad?
Is it mandatory to have a good academic record to be eligible for an education loan for abroad studies?