Further Your Education Overseas
Studying abroad can be life-changing, but for many students, it’s a goal that’s out of reach. If they can arrange financial aid, they have an opportunity to study in a foreign country.
A student loan can cover all or part of their education expenses. An education loan is different from other loans because investing in education enables them to make more money in their future careers.
Eligibility criteria
The following criteria are those that most banks follow to grant an education loan. In India, banks require applicants to be Indian nationals with a strong academic record. If the applicant is under 18, the parents need to take out the loan.
Banks want to see the applicant’s acceptance at a university, college or other educational institution. It’s preferable if the courses are professional or technical so the student has a better chance of finding a job after studying.
Documents
The following documents are necessary to apply for a loan for abroad studies.
- Completed application form.
- Passport-size photographs.
- Photo I.D. (driver’s license, Adhaar card, etc.).
- Proof of residence/address (electricity bill, municipal tax receipt, etc.).
- Academic documents (mark sheets, degree or provisional degree certificate and applicable entrance test scores).
- Admission letter.
- Statement of cost of study.
- Six months of bank statements.
- Proof of income of any co-applicants.
- In the case of collateral like immovable property, the bank will need documents such as a property title deed or NOC for a mortgage. Many banks want collateral as security to reduce their risks.
Some banks may also require certain technical or legal documents. Requirements can vary depending on a bank’s regulations.
What is the Procedure for Getting International Student Loans?
Applying for a loan early is a good idea, as the process can take some time. You will need to decide how much you want to apply for. Check whether the bank you want to use recognizes the course you want to study. Compare what different banks offer before deciding which one to use. Now you can fill out your application form and approach the bank.
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Once the loan is finalized, you will receive a loan document that details all the conditions of the loan. Once you sign the loan documents, the bank will disburse the amounts required by the educational institution.
Top Education Loan Providers in India for Studying Abroad
- HDFC Bank is a large private bank that offers international study loans. It offers up to INR 20 lakhs. Students can have loans approved even before they are admitted to universities. The HDFC loan for foreign study has a nominal interest rate and has tax benefits for the borrower.
- State Bank of India (SBI): It is considered to be one of the best banks for student loans and has four different types of loans. The Global Ed-Vantage loan scheme offers some of the lowest interest rates for students who want to study abroad. The loan range amount is above INR 7.5 lakhs up to INR 1.5 crore. The interest rate is 10.90%, effective from January 2023. The loan margin is a minimum of 10%, and loan repayment must be within 15 years.
- ICICI Bank offers up to a maximum amount of R2.1 crore for studying abroad. Interest rates begin at 9.50% per annum. The education loan without collateral limit is R2.20 lacs for undergraduate courses and Rs 20 lacs for post-graduate courses.
- Punjab National Bank offers loans to students under the PNB Udaan scheme. It’s for students who want to study graduate, post-graduate and job-oriented technical and professional courses abroad. There’s a loan margin of 15% for a loan amount of more than INR 4 lakhs. The bank offers the base rate as the interest rate on loans to study at the top 200 universities worldwide.
- Axis Bank offers international study loans with a margin of 15% if the loan amount exceeds INR 4 lakhs. It offers good interest rates and student loans of up to Rs. 75 lacs. Students must obtain admission to career-oriented courses such as engineering or medicine at the graduate or postgraduate level to receive loans.
What to Remember When Taking a Study Abroad Loan
- There is a period in which borrowers don’t have to make payments. This period depends on the bank.
- Banks usually do not provide the full amount needed to fund studying abroad. Most of them provide loans for about 90% of the total amount.
- It is important to remember that the exchange rate can affect the amount borrowers receive.
- Government banks in India mostly provide secured loans where borrowers pledge collateral, but there are private banks where they can get unsecured loans based on eligibility criteria. Students usually receive a loan of up to INR 4 lakhs without collateral. For loans exceeding INR 7.5 lakhs, property or other assets are required as collateral.
New Comprehensive Student Loan Scheme
In consultation with the Reserve Bank of India and the Indian Bankers Association, the Indian government has formulated a Comprehensive Student Loan Scheme. The new scheme covers all types of courses in India and abroad. Loans up to Rs. 30 lakhs will be given for studies abroad. No collateral or margin is necessary for loans up to Rs. 4 lakhs, and the interest rate won’t exceed PLR plus one percent. Loans must be repaid within 10 to 15 years, and borrowers have a grace period of a year after completing their studies.