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    All you need to know about Education Loans in India for Studying Abroad

    Studying abroad is a dream come true for most of us. But it is a meticulous choice. It requires delicate and sincere planning of our choices and funds. We may ace in our academics but it requires a healthy fiscal approach. Now, with the emergence of education loans, this dream seems closer than before. Banks have become more alert to the common student’s dream of foreign education. So, these institutions now offer loans specifically for studying abroad. Some of these even offer education loan for abroad studies without collateral. The average cost of studying abroad is approximately 15-20 lakhs per year. So, education loan for international students has now become imperative for aspirants. Just like all other types of loans, it is essential to collect as much information as possible when taking a loan for education. Some of the most important things you should definitely know about before applying are stated below.

    An Education Loan is an excellent way to fund your higher studies at a college/university in India or abroad. If you are eligible, you can take the loan for yourself, your spouse and your children. Moreover, if you are a legal guardian to a student, you can take the loan for their education as well. While there are now several banks that offer such loans, there are few essential things you should know about to make an informed borrowing decision.

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    Top Study Abroad Education Loan Providers

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    SBI
    idfc
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    auxilopng
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    yes bank
    icici
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    What are the basic requirements for an education loan for study abroad?

    The minimal education loan for abroad eligibility includes the following:

    • Must be a citizen of India
    • Must be at least 18years of age
    • Minor students must have a parent/guardian representative
    • Must have the acceptance letter from a recognised foreign university
    • Must have a stable economic status for the loan to be released

    Whatdocuments will be required while applying for a student loan for study abroad?

    • Transcripts of all qualifying exams
    • Proof of acceptance of admission
    • Two passport size photographs
    • Estimation of expenses (tuition fee and accommodations)
    • Bank statement (not older than 6 months)
    • Income tax proof (not older than 2 years)
    • Proof of Collateral (if applied)
    • Residence Proof (such as Electricity Bill)
    • Identity Proof (Aadhar Card, Passport, Driver’s License, Voter Card, etc.)

    Which is the best education loan in India for study abroad?

    Almost all the banks of India offered the best schemes for students to study abroad. However, some of the recommended and popular banks that offer student loans for study abroad are

    Bank of Baroda

    This bank has the Baroda Scholar scheme and offers a loan with a maximum amount of 20 lakhs.
    Repayment Tenure: Within 10 years for a loan amount under Rs. 7.5 lakhs and within 15 years for loan amount above Rs. 7.5 lakhs.

    PNB(Punjab National Bank)

    Under the PNB Udaan Scheme, you can get the maximum amount of your requirement, without much hassle.
    Repayment Tenure: Within 15 years of time.

    State Bank of India

    Students usually flock to government banks for bulk loans. And SBI’s education loan can offer a maximum amount of Rs. 30 lakhs.
    Repayment Tenure: Within 15 years of time.

    Axis Bank

    This bank is also most chosen by students for education loans due to its hassle-free process. The minimum loan amount is Rs. 50,000 and the maximum loan amount-Rs.20 lakhs. They have special interest rates for female applicants.
    Repayment Tenure: Usually 5-15 years; also depends on the 6-month reset cycle

    HDFCBank

    You can avail up to Rs. 30 lakhs; there is no upper cap with certain collaterals.
    Repayment Tenure: Within 15 years of time.

    Can oneget aneducation loan in India for study abroad without collateral?

    It is quite often that many students with the most excellent academic background do not have stable collateral to offer to the banks for acquiring loans. However, there are some private banks and NBFCs (Non-Banking Finance Companies) that help you avail of an education loan up to Rs. 40 lakhs or more without collaterals. But their interest rates usually become higher in these cases.

    Some of the banks offering education loans in India for study abroad without collateral are:

    Axis Bank:

    The maximum loan amount is Rs.40 lakhs. Their interest rate is between 11.25% to 13%. The loan repayment tenure for unsecured loans is 20 years.

    ICICI Bank:

    The maximum loan amount is Rs. 40 lakhs. The interest rate starts at 10.75%. The loan repayment tenure is between 10 to 12 years for a post-graduate program.

    Avanse (NBFC):

    The maximum loan amount is Rs.40 lakhs. The interest rate is between 12.65% to 16%. The repayment tenure is 10 years.

    InCred (NBFC):

    The maximum loan amount is Rs. 40 lakhs. The interest rate is between 11.75% and 16%. The repayment tenure is 10 years.

    HDFC Credila:

    The maximum loan amount is Rs.40 lakhs. Their interest rate starts at 12.05%. The loan repayment tenure for unsecured loans is 10 years.

    Auxilo (NBFC):

    The maximum loan amount is Rs. 40 lakhs. The interest rate is between 12.70% to 18%. The unsecured loan repayment tenure is 10 years.

    Frequently Asked Questions

    You canavail of an education loan of a minimum of Rs. 4 lakhs to a maximumofRs. 40lakhs, or sometimes according to your requirement.

    To apply for an education loan for abroad studies, you must be a citizen of India and at least 18 years of age or have a parent/guardian representative. You must also have an acceptance letter/ admission script from a recognized foreign university.

    According to RBI guidelines, the cap amount for abroad education loans in India is Rs. 40 lakhs. However, someprivate banks do offer nearly Rs. 75 lakhs with certain collaterals.

    You can get an education loan between Rs. 4 lakhs to Rs. 40 lakhs to study abroad. However, some private
    banks offer more upper limit in loans, according to your requirement, with some terms and regulations.

    Choose anappropriate bank or NBFC which suits your criteria of the loan amount, interest rates, repayment tenure, etc. Keep your residence proof, identity proof, and academic transcripts ready. Also, keep handy any other such documents and proof.

    The first thing you should know about is the eligibility criteria for the loan. While the requirements can vary between lenders, they are more or less the same. Things like your credit score, income, existing loans, age, etc. would be taken into consideration by the lender.

    Moreover, you should also know that the loan is not available for every course, expense, or college/university. You can get in touch with the lender you are interested in to know more about the courses, expenses and colleges/universities for which they offer the loan.

    For effective Education Loan comparison, you also need to make sure whether you want a secured loan or an unsecured loan. Student loans are generally available in both variants. If you go with the secured option, you will be required to pledge collateral like your home against the loan
    amount.

    Decide before applying as the selection can have a significant impact on the interest rate, loan amount and loan tenure.

    You also need to compare the interest rate as it will significantly impact the overall amount you repay to the lender. The Education Loan interest rate can vary considerably between lenders, based on your eligibility, loan amount and loan tenure.

    A few top banks in India offer Education Loans starting at just 11.5% per annum. Consider such lenders to make sure that the loan is both convenient and affordable.

    You can think of margin money in loans for education as the down-payment you make in other types of loans like Home Loans. This is generally a certain percentage of the total cost of education/course. For instance, if the fee of a course is Rs 10 lakh, the bank might approve a loan of Rs 8 lakh even if you meet their eligibility requirements.

    You will then be required to pay a margin of Rs 2 lakh from your own pocket. So, do check the margin requirement of the lender. You can also find the best Education Loan in India that do not have any margin requirement up to a certain extent, like for loans of up to Rs 20 lakh.

    Last but not least is the loan tenure. Most banks in India generally offer student loans for up to 8 years in case of the unsecured loan (without collateral) and up to 10 years in case of secured loans (with collateral).

    Also, there is an additional moratorium period of generally around six months after course completion where you can only pay the interest part of the loan. But this period too can vary between lenders.

    Repayment period of upto 15 years after Course Period + 12 months of Repayment will commence one year after completion of course. Loan to be repaid in 15 years after the commencement of repayment. In case a second loan is availed for higher studies later, to repay the combined loan amount in 15 years after completion of second course. The accrued interest during the moratorium period and course period is added to the principle and repayment is fixed in Equated Monthly Installments (EMI). If full interest is serviced before the commencement of repayment; EMI is fixed based on principal amount only.

    The parent(s) of the student has to compulsorily join in as co-applicant. In case of a married person, a co-applicant can be spouse/parent(s)/parent(s)-in-law. In cases where both the parents are not alive, close relative or guardian to be taken as co-applicant.
    The co-applicant should be Indian national