India’s education loan disbursements jumped dramatically in 2022, from Rs 16,000 crore in the 2021–22 fiscal year to a staggering Rs 17,000 crore in 2022–23. Access to educational opportunities, both domestically and internationally, has been made possible in large part by these funds.
Regardless of your aspirations to attend esteemed colleges in the US, UK, Canada, Australia, or any other country in the world, this thorough guide gives you the skills and self-assurance you need to successfully negotiate the challenges of student loan financing.
Types of lenders for abroad education loan
It is imperative that candidates compare education loan for abroad studies offered by various providers when contemplating an education loan for study abroad. Education loan providers can be broadly divided into four categories.
- Government banks – Financial institutions owned by the government are called public banks. They frequently offer special programmes and low interest rates to students who are pursuing higher education. Because they are backed by the government, these loans are usually seen as more dependable and secure.
- Private Sector Banks – Financial institutions with private ownership are called private banks. When compared to public banks, their interest rates might be a little higher. Private banks may be more adaptable in providing education loans catered to particular requirements and frequently offer more individualised services.
- NBFCs – As a part of their financial services, non-banking financial institutions, or NBFCs, provide education loans. They can serve as a substitute for conventional banks and occasionally provide loans with more lenient qualifying requirements.
- International lenders – Financial organisations known as international lenders give education loans to foreign students enrolled in study abroad programmes. Such loans can have a wide range of terms, interest rates, and eligibility requirements, depending on the borrower’s course of study and the nation in which they intend to pursue their education.
Types of education loans for studying abroadSecured loans and unsecured loans are the two main categories of loans for international education.
- Secured loans – In order to secure an education loan, the borrower must furnish collateral, which can be any kind of valuable asset such as real estate, a fixed deposit, or other assets. The lender receives this collateral as assurance that the loan will be paid back.
- Unsecured loans – Collateral is not needed for borrowers of unsecured education loans. Rather, the borrower’s creditworthiness is evaluated by the lender using information from co-signers (if any), income, and credit history.
Key features of abroad education loans
Lender Category – Public Banks
Name – SBI, UBI
Interest Rates – Starting from 10.15%
Margin Money – 10% – 15%
Processing Fees – Up to INR 15000
Payment During Studies – Nil
Lender Category – Private Banks
Name – ICICI Bank, HDFC Bank, IDFC First Bank
Interest Rates – Starting from 11.5%
Margin Money – Nil
Processing Fees – 1% – 2% of the loan amount
Payment During Studies – Simple/partial interest
Lender Category – NBFCs
Name – HDFC Credila, Avanse, Auxilo, InCred
Interest Rates – Starting from 11.25%
Margin Money – Nil
Processing Fees – 1% – 2% of the loan amount
Payment During Studies – Simple/partial interest/ immediate EMI
Lender Category – International Lenders
Name – MPower, Prodigy Finance
Maximum Loan Amount – Up to USD 100K
Interest Rates – Starting from 12%
Margin Money – Nil
Processing Fees – Up to 5% of the loan amount
Payment During Studies – Simple interest
Education loan process for abroad studiesFollow these steps:
- Research your options – It’s important to investigate your options for financing before starting the loan application process. Scholarships, private banks and lenders, and government banks are common sources of education loans. Every option has different requirements for eligibility, interest rates, and terms of repayment.
- Choose your destination and institution – The loan application process is heavily influenced by the nation of destination and the university you select. Certain countries or institutions may be eligible for specific loan programmes offered by certain lenders. Verify whether the loan programme you are interested in is available at the university and destination of your choice.
- Understand eligibility criteria – Different loan programmes and lenders have different requirements for eligibility. Generally speaking, you must fulfil the following requirements:
- Getting admitted to a recognised university: A letter of acceptance from an accredited university is required.
- Creditworthiness: Your income, co-signer (if any), and credit history will all be evaluated by lenders.
- Co-signer (if needed): To support your application, some lenders might need a co-signer, usually a relative or legal guardian with a clean credit record.
- Apply for loans – It’s time to apply for the loan after you have decided on the lender and read the terms. It is convenient to submit your documents and monitor the status of your application when most lenders offer online application processes. To prevent any delays, make sure you double-check all the information you supply.
- Compare loan offers – Spend some time comparing any loan offers you receive. Think about things like interest rates, terms of repayment, and any extra charges or benefits. Pick the loan with the best terms available given your financial circumstances.
- Plan for repayment – Make a plan for repaying the loan before you accept it. Recognise the start date of your repayments, the monthly amount you will owe, and the total amount you will repay over the course of the loan. Budgeting for these repayments is crucial to preventing future financial hardship.
How to apply for an abroad education loan with GyanDhan?
Examining and contrasting various lenders and their offerings ought to be the first step in the application process for an international student loan. By using GyanDhan to assess your profile and choose the ideal lender, borrowers have already won half the war. It takes just five easy steps to apply for an overseas education loan through GyanDhan.
Step 1: Check your loan eligibility with GyanDhan.
Step 2: Expert education loan counselor will evaluate your profile.
Step 3: Team GyanDhan will either arrange a doorstep pickup for your documents or you will receive a customized checklist to upload.
Step 4: Once the documents are uploaded, GyanDhan will proceed with the rest of the formalities.
Step 5: The bank will disburse the amount as per schedule.
Although getting an education loan for overseas study can be difficult, it is completely possible with careful preparation and professional guidance. The GyanDhan staff makes recommendations for the ideal loan programme based on an understanding of your financial needs, eligibility requirements, and terms and conditions. In addition, we give you a personalised document list that guarantees a full file.
Therefore, don’t hesitate to give GyanDhan a try if you’re looking for a hassle-free student loan experience with the added benefit of professional assistance. Our goal is to assist you in reaching your academic objectives while minimising financial strain.