Education Loans For Studies Abroad

Different types of education loans

Based on the security, education loans can be broadly classified into 2 main categories :

  • Collateral loan
  • Non – collateral loan

 

What is colleteral and non colleteral loan

Colleteral Loan

A collateral loan is also known as a secured loan. A collateral security can be in the form of house, flat, bungalow, non-agricultural land, fixed deposit, life insurance etc.

Non Colleteral Loan

There are options to secure a loan without any security/ collateral. Such type of loan is known as non – collateral loan. If the loan amount is upto 4 lakhs , no collateral is required. If the loan amount above 4 lakhs and 7.5 lakhs, then a third-party guarantor is required. A third – party guarantor is an assurance that if the person who originally took the loan fails to repay the loan because of any reason, then the full repayment of the loan shall be borne by the third party guarantor. If the loan amount is more than 7.5 lakhs, then a colleteral of suitable value is required

Eligibility criteria for education loan

Although eligibility criteria may differ slightly for different loan providers, but following are some of the common points that needs to be checked to see if one is eligible for an education loan to study abroad :

education loan for abroad studies - tick-icon  He/She should be a resident of India.

education loan for abroad studies - tick-icon  The student who is applying must have attained the age of 18. Otherwise his/her parents will have to take the loan

education loan for abroad studies - tick-icon  The student should have a good academic background.

education loan for abroad studies - tick-icon  A confirmed admission from a recognised college/education institution is a must.

education loan for abroad studies - tick-icon  The chosen course for which the student is going to study must be a technical or professional one because banks give preference to job oriented courses.

education loan for abroad studies - tick-icon   The co-applicant, i.e. parent(s) or guardian, need to have a regular source of income

Documents required for education loan

Before you start applying for an education loan, here is a quick list of documents that would be required while applying for the loan. Documents required may vary as per the banks own regulations.

education loan for abroad studies - tick-icon  Filled application form

education loan for abroad studies - tick-icon  Passport size photographs of the applicant and the co-applicant.

education loan for abroad studies - tick-icon  Photo ID of the applicant and the co-applicant. It should be a government photo ID such as a driver’s license, PAN card,  Voter ID card, Aadhar card, Passport.

education loan for abroad studies - tick-icon  Proof of residence of the applicant and the co-applicant

education loan for abroad studies - tick-icon  Academic documents that are required are :

  • SSC, HSC, Graduation mark sheets
  • Mark sheet of any entrance exams like GRE/GMAT/TOEFL/IELTS
  • Proof of admission – Admission letter offered by the college or university.
  • Income documents :

For salaried people :

education loan for abroad studies - tick-icon  Latest 3 salary slips carrying date of joining details

education loan for abroad studies - tick-icon  Previous 6 months bank statement of the salary account

education loan for abroad studies - tick-icon  Previous 1 year’s Form 16 from the employer along with 1 year income tax return

For self employed :

education loan for abroad studies - tick-icon  ITR of previous 2 years along with computation of income

education loan for abroad studies - tick-icon  Audited balance sheet of previous 2 years

education loan for abroad studies - tick-icon  Bank statement of previous 8 months

education loan for abroad studies - tick-icon  Proof of turnover (latest sales/service tax return)

For Self Employed – Professional

education loan for abroad studies - tick-icon  ITR of previous 2 years along with computation of income

education loan for abroad studies - tick-icon  Audited balance sheet/proft and loss statement of previous 2 years

education loan for abroad studies - tick-icon  Bank statement of previous 8 months

education loan for abroad studies - tick-icon  Proof of Qualification

education loan for abroad studies - tick-icon  In case of collateral loan, a collateral can be a flat, home, or non-agriculture land the following documents are required:

  •    Property title deed
  •  Building approved plan
  •   NOC for a mortgage from builder or society  

Loan friendly banks and aggregators in India for studying abroad

Here is a list of few banks which you can approach for education loan for abroad studies :

HDFC Credila

HDFC Credila, an HDFC Ltd. Company, is India’s First Dedicated Education Loan Company. It has funded thousands of students from all over India across in 2100+ educational institutes and 35 + countries. Some of the benefits of taking loan from HDFC Credila include :

  • No margin money required
  • There are options of upto 100% finance
  • Tax benefit under Sec 80E
  • Rate of Interest is quite feasible
  • There is no upper limit on loan amount
  • There are long term loans as well resulting in easy EMIs
  • Flexibility in collateral security requirements
  • Loan against property mortgaged with HDFC

State Bank Of India

State Bank of India is SBI is considered to be India’s largest loan financer . SBI Loans can be availed by Indian Residents.  For upto Upto Rs 7.5 Lacs, effective interest rate is 10.50% . For loans above 7.75 lacs, effective interest rate is 10.75% . There’a 0.5 5 concession in the interest rate for the girl students. Also, there’s 0.50% concession for students availing of SBI Rinn Raksha or any other existing policy assigned in favour of State Bank Of India.

Axis Bank

Axis bank provides education loans for studying abroad starting from as low as Rs. 50000. Max loan amount can be upto 75 lakhs.  The loan covers hostel fees, tuition fees, cost of the books . It offers Interest ranging from 10.5% – 12.5% depending upon the loan amount.

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ICICI Bank

ICICI Bank provides loans upto 1 crore for studying overseas. They Collateral free education loan of up to Rs 40 lakh for select institutes/ courses. The repayment options and tenure options are very flexible to meet one’s personal requirements.

An aggregator is an external company who has partnership with banks to get you a loan. Here is a list of few aggregators which you can approach for education loan for abroad studies

Gyandhan

Gyandhan is India’s first education based financing platform. Apart from loans, they also provide scholarships and crowdfund the research projects. Some of the partners of Gyandhan are Axis Bank, Avanse, Bank Of Baroda, ICICI Bank, SBI.

Prodigy Finance

MPOWER Financing

MPOWER Financing provides loans to international students without collateral, consigners or credit history.  It also covers miscellaneous expenses for students such as books, food, insurance and housing. 

To avoid last minute confusion and surprises, plan your education loan well in   advance. Keep all the documents in place and other stuff ready to meet all the deadlines. You should have an idea about all the expenses that you will have to bear including tuition fees, cost of living, travelling and other such expenses which may seem to be very small but can make a considerable difference in your budget. To make sure you invest your penny at the right place, look out for the ROI of the course/program you are going for. Hope this article helped you to narrow down your choices on choosing the correct bank/aggregator to fund your education loan for abroad studies.