Best 8 education loan to study abroad

In the widespread of career competition everyone wants the best for themselves and their offsprings. In past, due to lack of money and less globalization the students were exempted from the high quality of education as the country was in its initial stages of development after independence.

The condition of citizens was not in a situation to raise their children with a privilege of abroad studies. As the country developed and in recent times, guardians and students tends to go abroad for their higher studies. While some families can afford the abroad studies expenses but majority of India’s population comes under the category of people who can’t afford studies at abroad.

But people push themselves to get best study resources like MIT, University of Pennsylvania and Cambridge University etc so; they take loans to pay their educational expenses. With the help of banks and other organizations people can take the loan and go to abroad for their further studies.

Problem arises at this point only as students and guardians are confused that which is a legit and reliable source of educational loans because there are many frauds roaming around in the market to misuse the lack of awareness and conditions of poor students and their guardians. So we have come up with a list of top educational loans to study abroad which are legit, authorized, customer friendly and will provide best services of required loans to you. Have a look to some of them.

List of education loan giving banks:-

1. HDFC Bank

HDFC Bank offers education loans with preferential interest rates for reputed universities.

Maximum loan amount – Up to Rs. 20 lakhs

Interest rate – ranges from 9.45% to 13.34%

Processing fees – Up to 1.5% of the loan amount

HDFC education loans can be availed before the student has secured an admission at the university. Borrowers enjoy flexible security collateral. Co-borrowers can be living in a different city than the borrower, but they can only be relatives of the borrower.

2. State Bank of India

SBI finances international higher education for job-oriented professional and technical graduate as well as postgraduate degree courses. Some examples of these courses are MBA, MCA, MS, diploma courses at reputed universities etc. The loan offered by SBI covers tuition fees, exam fee, lab fee, library fee, caution deposit, books and equipment cost, travel expenses etc.

Maximum loan amount – Rs. 30 lakhs

Collateral security required – For loans above Rs. 7.5 lakhs

Loan margin – 15% for SBI education loan borrowers

Interest rate – ranges from 6.85%to 8.65% on the current base rate of SBI

Repayment tenure – 1 year to 15 years

SBI offers a moratorium period where the entire interest can be repaid so that when the actual loan repayment tenure starts the monthly installment can be just the principal amount.  The borrower has to submit college admission letter, completed loan application form, course costs, co-applicant details and other KYC documents to the bank.

3. Axis Bank 

Students can seek loans for technical, professional courses, or career-oriented courses. The whole process of getting an education loan with Axis bank is hassle-free. The loan covers hostel fee, tuition fee, book cost etc.

Maximum loan amount – Rs. 20 lakhs

Minimum loan amount – Rs. 50,000

Interest rate – Ranges from 16.5% to 17.5% with special rates for women

Loan margin – Not required for a loan below Rs. 4 lakhs. For loans above Rs. 4 lakhs, 15% has to be brought in by the borrower

Processing fee – None

Education loans require a parent or guardian to act as a co-applicant, with third party guarantee or collateral security, if applicable. Axis Bank might also consider LIC policy for 100% of the loan amount but it depends from case to case.

4. Punjab National Bank 

PNB Udaan is a special education loan scheme for Indian students planning to study abroad. The loan is available for students who have got admission for graduate or post-graduate courses varying from diplomas, job-oriented professional or technical courses, CIMA/CPA courses etc. The PNB loan covers university fee, travel expense, exam fee, lab fee, library fee, book/equipment fee, and other related expenses.

Maximum loan amount – PNB sanctions loans according to the requirement of the borrower,

Loan margin – 15% for loans above Rs. 4 lakhs. For loan amount below Rs. 4 lakhs, the loan margin is not required. Assistantship and scholarships can be added to the loan margin. PNB offers the base rate as the

Interest rate – Base rate ranges from 6.90% to 9.55% for pursuing the education at the top 200 universities across the world

Moratorium period – Up to a year with no prepayment charges levied by the bank

Processing fees – 1%

The tenure options available for PNB education loan borrowers is up to 15 years

5. Bank of Baroda 

Under the Baroda Scholar scheme, admission secured for professional and technical courses at reputed foreign universities are sanctioned for education loan.

Maximum loan amount – Up to Rs. 20 lakhs

Interest rate – ranges from 6.75% to 9.85%

Loan margin requirement – 15%

Repayment tenure – Loans taken up to Rs. 7.5 lakhs can be repaid within 10 years and loans above Rs. 7.5 lakhs can be repaid within 15 years

Borrowers can get a holiday or moratorium period of six months to one year after getting employment. Security is not required for loans below the amount of Rs. 4 lakhs. Third party guarantee is required for loans between Rs. 4 lakhs and Rs. 7.5 lakhs and a tangible collateral security is required for loans above Rs. 7.5 lakhs.

6. Canara Bank

The Canara Bank education loan covers university fee, travel costs, exam fee, lab fee, library fee, book/equipment fee, and other related expenses. Education loan has to be taken with a co-borrower and 100% collateral security is required for loans above Rs. 7.5 lakhs.

Maximum loan amount – Upto Rs. 20 Lakhs

Interest rate – ranges from 9.95% to 10.45% with special rates for female students

Loan margin – 15% for loans taken above Rs. 4 lakhs

Repayment tenure – Can be up to 10 years for loans below Rs. 7.5 lakhs and up to 15 years for loans above Rs. 7.5 lakhs.

Security – Not required for loans below Rs. 4 lakhs. Third party guarantee has to be given for loans from Rs. 4 lakhs to Rs. 7.5 lakhs.

7. IDBI Bank 

The IDBI education loan covers university fee, travel, exam fee, lab fee, library fee, the cost of computers, book/equipment fee and other related expenses. IDBI Bank sanctions loan amount according to the requirement of the borrower, with no security on loans below Rs. 4 lakhs.

Maximum loan amount – Up to Rs. 20 lakhs

Interest rate – ranges from 8.65% to 9.15%

Repayment tenure – Up to 10 years for loans below Rs. 7.5 lakhs and up to 15 years for loans more than Rs. 7.5 lakhs

Third party guarantee is required for loans between Rs. 4 lakhs and Rs. 7.5 lakhs. Education loan has to be taken along with a co-borrower. 100% collateral security is required for loans more than Rs. 7.5 lakhs.

8. Avanse Financial Services

Avanse offers various kinds of loans like pre-visa disbursement loan, fast-track loan, pre-admission loan, and certificate of availability of funds. Borrowers have to submit their KYC documents, course fee, collateral documents, income documents etc. when they avail an Avanse education loan.

Minimum loan amount – Rs. 1, 00,000

Interest rate –  ranges from 11.75% to 16%

Maximum loan limit – Customized according to the borrower’s requirement

Loan tenure can be taken between 12 months to up to 120 months

Avanse education loan covers tuition fee, travel cost, living expense, books /equipment fee and other related expenses.

Eligibility for education loan

Nationality:

• Indian citizens
• Non-Indian Residents (NRIs)
• Overseas Citizens of India (OCI)
• Persons of Indian Origin (PIOs)
• Students born to Indian parents abroad and wish to study in India

Courses:

• Undergraduate programs
• Postgraduate programs
• Doctoral courses and PhDs
• Certificate courses with 6 months or longer duration
• Job-oriented courses
• Technical/diploma/professional courses

Institutes:

• Recognized institutions and government colleges
• Private institutes aided by government
• Professional institutions
• International colleges and universities

Collateral:

• Collateral-free loans up to Rs.7.5 lakh from leading lenders
• Collateral-free loans up to Rs.40 lakh for select courses/institutions from select lenders

Acceptable collateral: Residential or commercial property or plot, fixed deposits, insurance

Loan amount: Up to Rs.1 crore

Features & Benefits of education  loan

• Loan financing up to Rs.1 crore available.
• Loan repayment tenure up to 15 years.
• Get Education loans for studies in India and abroad.
• Some lenders offer loan disbursal before applying for a Visa.
• Door-step service to collect required documents.
• Children of the bank’s employees enjoy preferential rates at several banks.
• Certain banks offer concessional interest rates to female students.
• Enjoy a moratorium period of up to 1 year after course completion. During this period, you do not have to make payments on the loan.
• Enjoy tax benefits up to 8 years on the interest paid.

List of Documents Required for education loan

Here is an indicative list of documents that most lenders ask:

• Admission letter from the educational institution
• Marksheets (previous education – school/college)
• Age proof
• ID proof
• Address proof
• Signature proof
• Salary slips
• Recent bank account statements
• ITR with income computation
• Audited balance sheet
• Recent bank statements
• Proof of turnover (service tax return/sales receipt)
• Completed application form with signature
• Latest passport size photographs
• Appropriate Visa for studies abroad

*Document charges may be levied by the lender.

How to Apply education loan

There are several ways of applying for a student loan:

Apply Online:

• This is the easiest and the most convenient way of applying. There are two ways of applying online. The first is a straightforward application form that you will fill online, attach the necessary documents, and submit the form.
• The second is where you apply through providing all the requested details and the lender will then get in touch with you to discuss the terms of the loan before proceeding with the application.

Offline

• Visit a Branch: You can apply for a loan by visiting your nearest branch with the necessary documents, discuss the terms of the loan with a representative, fill the form, and apply in person.
• Call the Lender: You can either call the lender or request a call back by expressing your interest. You can then discuss the loan terms and proceed to apply.

Virtual Assistant

• Banks and other financial institutions are now adopting digital methods to better serve their customers. One such method is using a Virtual Assistant to clear your doubts and request assistance with the application procedure.

FAQ’s

1. Is the RBI moratorium on loans due to the Covid-19 pandemic applicable for education loans too?

Yes, the Reserve Bank of India’s moratorium on retail loans, due to people undergoing financial challenges due to the Covid-19 pandemic, is applicable to education loans as well. The moratorium on Equated Monthly Installments (EMIs) could be availed from March 2020 to August 2020.

2. Will I get the same amount of money on my education loan for the same level course in India and abroad?

No, usually education loans for courses in India do not offer the same amount as for comparable level courses abroad. Education loans offer higher amounts for courses abroad as fees and other expenses may be higher there than for courses in India (which also depends on the educational institution).

3. Is it possible to get an education loan without offering collateral?

Almost all education loans from banks and other lenders require collateral which can be fixed deposits, property, shares, bonds, etc. However, you can still avail an education loan without having to give any collateral. This can be achieved through the Credit Guarantee Fund for Education Loan (CGFEL) Schemes which covers a collateral-free loan of up to Rs.7.5 lakh. This is only for education loans dispersed under the Model Education Loan Scheme of Indian Banks’ Association (IBA). To avail this, you have to apply for an education loan under this scheme through a scheduled commercial bank. You don’t need to provide security or collateral for amounts of up to Rs.7.5 lakh but anything above that will require collateral.

4. Can I take an education loan against mine or my parents’ fixed deposit?

You can always avail a loan against a fixed deposit, as per the terms and conditions of the lender. However, there are certain banks, such as ICICI, which provide specifically education loan against fixed deposit.

5. For courses abroad, is the loan offered in the currency of that particular country?

For courses abroad, education loans are typically paid directly to the educational institution in the local currency of that country.

6. Will the moratorium on education loan get extended if I choose to take a sabbatical from my course?

The moratorium period on education loans differ from lender to lender. However, it is usually until the borrower gets employed or for up to 1 year of the course being completed, whichever is earlier. If you choose to take a sabbatical and want an extension of your moratorium, it would depend on the bank whether to grant it or not, so it is best to have a discussion about this with the lender.

7. Are NRIs eligible for education loans from banks in India?

One of the eligibility criteria for education loans that are offered by banks and other financial institutions in India is that the individual should be an Indian national. This means that any student who is a citizen of India can apply for and avail an education loan from a lender in the country. Collateral or documents which can be taken as security should be those that are enforceable in India.

8. What do the lenders consider to approve the loan?

Lenders consider the following factors when approving a loan:

• The course and institute you choose
• The amount you need
• Your academic performance
• Repayment capacity of your family
• Family assets
• Annual income

9. What happens if I discontinue the course and get an employment within the grace period?

In case you choose to discontinue the course mid-way, you must start repaying the loan immediately after getting a job.

10. Can I port my education loan to another bank with lower interest rates?

Yes, you can move your education loan from one bank to another. However, your current bank might charge a refinance fees. Therefore, it is important to consider all factors of the existing bank and the new bank before moving the loan.

11. Do all education loans cover 100% of the education expenses?

Yes, education loans cover 100% of the education expenses. However, full coverage may only be provided for expenses under a certain limit. Lenders have a margin if the expenses go above the limit.

12. What are the other expenses covered by education loans?

Some of the additional expenses covered by education loans are:

• Hostel fees
• Exam fees, laboratory and library fees
• Cost of books, uniforms, projects, etc.
• Travel expenses for overseas education
• Deposits required by the educational institute

These were some reliable and legit educational loan providers. Hopefully all the information provided to you will help in your better career pathways. We wish you all the best for your future studies and career at foreign. For more careers related guidance and articles please visit findaim.com regularly.

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