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Interest paid on education loans from our partners is fully eligible for deduction under Section 80E of the Income Tax Act, 1961. This will help ease the financial burden of studying abroad.
UniCreds harnesses the power of AI and data science to provide students with the optimum education loan that will best suit their needs.
Through UniCreds, expect to get education loans with the least amount of collateral. Our strategic partnerships with some of the most popular lenders enable us to provide students with education loans with flexible collateral.
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Depending on the plan you choose, your loan might pay all or part of your university fees, along with other costs. Typically, a student loan for international education may often cover all of your educational expenditures. However, make sure you’re well aware of things your loan covers to see if your expectations are being met. There are different loan schemes, each fulfilling set criteria and covering a little or most of your expenses. The following expenses below are what you may expect your loan to cover -
Indian students are becoming more and more inclined to complete their studies overseas. While the US, UK, and Canada continue to be some of the top options, Australia and EU nations are not far behind in terms of educational prospects. Getting an education loan for abroad studies is one of the most preferred options to finance education during the time of the course. For students who aspire to study abroad, many banks and other lenders now provide overseas education loans. Different education loan programmes are available from these lenders, but picking the one that is best for you might be challenging. We at UniCreds bridge the gap & help you tackle this challenge of choosing the best education loan. Our experts guide you to pick the most suitable competitive education loan available today.
There are two types of education loans for abroad studies on the basis of Collateral. Both types are explained in detail below:
Secured Education Loan: A secured education loan, often known as a loan with collateral, requires the applicant to provide either material or immaterial security. A pledge of security to the lender may take the form of real estate, a fixed deposit, a life insurance policy, etc. Since the bank needs to confirm all the paperwork pertaining to the pledged security, this type of loan acceptance takes longer. However, it has lower interest rates on student loans, lengthier payback schedules, and no repayment throughout the course of school. Additionally, there is a larger likelihood that this education loan will be authorised, and parental income is not a factor in a loan acceptance.
Unsecured Education Loan: In the case of an unsecured education loan for abroad studies, the applicant is not required to put up any security. This is an education loan for abroad studies without collateral. This form of education loan is suitable for students who do not have any security to give. However, it should be noted that an unsecured education loan is more difficult to get approval for and has a higher rate of interest (compared to secured loans). Unsecured student loans also have a shorter repayment period and certain repayments must be made while the borrower is still in school. Additionally, for education loans without collateral, a minimum co-applicant income is required.
What is the maximum amount limit for education loans to study abroad?
Students may apply for education loans for abroad studies worth up to INR 1 crore or more under secured education loans. Students may apply for study loans up to INR 40 lakhs in overseas education loans without collateral. Depending on the profile, nation, course, and other factors of the applicant and co-applicant, this loan amount limit may fluctuate or increase.
All about Collateral
A valuable object is used as collateral to secure a loan. Lenders' risk is reduced by collateral. The lender has the right to sell the collateral if a borrower defaults on the loan in order to recover its losses. There are different types of instruments that are accepted as collaterals. Collateral can be any sort of liquid assets, such as bonds, shares, FDs, or any immovable property, such as a house, any business property, or just land. The fact that agricultural land is not recognised as collateral is a crucial consideration. Additionally accepted as collateral are shares, bonds, bank deposits, mutual fund shares, gold, debentures, bank deposits, life insurance policies, and government securities.
Now students can also obtain abroad education loans without collateral. For loans up to INR 7.5 lacs, parents or guardians are added as co-borrowers, and a third-party guarantee is acquired. Property or any other asset must be pledged as security for loans that are more than INR 7.5 lacs.
Top Education Loan Providers in India for studies abroad
Check out these top government and private education loan providers in India:
State Bank of India
SBI provides funding for postgraduate degree programmes as well as professional and technical graduates who are looking for work in nations like Italy, the United States, the United Kingdom, Ireland, Russia, Austria, Finland, Norway, Denmark, Poland, Spain, Germany, New Zealand, Singapore, Canada, etc. These courses include but are not limited to, MBA, MCA, MS, diploma programmes at reputable colleges, etc. The loan provided by SBI pays for tuition, books and equipment costs, exam fees, lab and library fees, caution deposits, travel costs, and more.
Key Points
Axis
For technical, professional, or career-oriented courses, students may apply for a study abroad loan in Axis Bank. Hostel costs, tuition costs, book costs, and other costs are covered by the loan amount, which starts at Rs 50,000 with competitive interest rates. With Axis Bank, the entire loan application process is simple.
Key Points
Bank of Baroda
Student loan for study abroad are authorised under the Baroda Scholar programme for students who have been admitted to professional and technical programmes like MBA, MCA, MS, etc. The loan cap is Rs. 80 lakhs for institutions that are specifically listed and Rs. 60 lakhs for institutions that are not.
Key Points
Canara Bank
University tuition, travel expenses, test fees, lab fees, library fees, book/equipment fees, and other relevant expenditures are all covered by the Canara Bank education loan. For loans over Rs. 7.5 lakhs, a co-borrower is required, and 100% collateral security is required.
Key Points
Numerous NBFCs, in addition to banks, provide education loan for abroad studies. NBFC education loans frequently have fewer requirements for eligibility.
Established in 2013, Avanse is a new-age education loan firm that strives to create seamless loans for those Indian students wishing to study abroad. The specifics of Avanse's student loans are as follows:
|
Maximum Amount |
Need-based Starting from Rs 1lakh |
|
Tenure of the Loan |
10 years including course tenure |
|
Margin Requirement |
No margin required |
|
Rate of Interest |
Avanse Base Rate + Spread Depends on your credit profile and the course is undertaken |
|
Processing Fee Charged |
1-2% of the loan amount decided on a case to case basis |
The goal of HDFC Credila, India's first specifically designed education loan, is to help students realise their dreams of pursuing higher education overseas. Credila's loan approval is available even before receiving official admission.
|
Maximum Amount |
Need-based Starting from Rs 1lakh |
|
Tenure of the Loan |
12 years |
|
Margin Requirement |
No margin required |
|
Rate of Interest |
Credila Benchmark Lending (12.55% current) Rate + Spread Depends on your credit profile, collateral offered, the course undertaken, etc |
|
Processing Fee Charged |
1-1.25% of the loan amount decided on a case to case basis |
Auxilo is a new player in the school loan market, but it has already established itself by providing education loan for abroad studies to numerous students. The primary characteristics of an Auxilo education loan are:
|
Maximum Amount |
Based upon the needs of students |
|
Tenure of the Loan |
10 years |
|
Margin Requirement |
No margin loans are available |
|
Rate of Interest |
Auxilo base interest rate (12.7% current) + a spread Depends on your credit profile, collateral offered, the course undertaken, etc |
|
Processing Fee Charged |
Up to 2% of the sanctioned loan amount |
All prospective students may apply for study abroad loan through the NBFC InCred. The following information relates to their loans for studying abroad:
|
Maximum Amount |
Rs 1 crore (Secured ) Rs 40 lakh (unsecured) |
|
Tenure of the Loan |
10 - 15 years |
|
Margin Requirement |
No margin loans are available |
|
Rate of Interest |
12% onwards Depends on your credit profile, collateral offered, the course undertaken, etc |
|
Processing Fee Charged |
1-1.5% of the sanctioned loan amount |
Which is the cheapest Education Loan in India to Study Abroad?
If your university is on BOB's exclusive list of universities, the Bank of Baroda offers the cheapest education loan for studying abroad. You may be eligible for an education loan at a rate of interest of 6.75% if your institution is among the elite AA or A list of institutions, and you may be eligible for an education loan of up to INR 7.5 lakhs at a rate of interest of 7.85% if your university is among List B. Education loans over INR 7.5 lakhs are provided to institutions on List B at an interest rate of 7.6%.
How to choose the best overseas education loan
Numerous banks and commercial institutions in India provide education loans for abroad studies both domestically and overseas. However, each lender has a unique collection of products and services available. Banks differ significantly in terms of interest rates, processing fees, moratoria, prepayment policies, tax advantages, repayment lengths, and other factors. Therefore, it is important to examine options before choosing one that suits your demands.
Interest Rate
When choosing a bank for a study abroad loan, the interest rate is still the most crucial factor to take into account because even a minor difference can result in huge financial savings. Learn the distinctions between fixed and floating interest rates, evaluate the interest rates provided by different banks and financial institutions, and select the most economical choice.
Tax Benefits
Section 80E of the Income Tax Act of India, 1961 permits tax deductions on the interest portion of student loans obtained from scheduled Indian banks and gazetted financial organisations. Tax deductions are available for a total of 8 consecutive years, starting with the year the loan is taken and continuing for 7 years after that, or until the interest portion of the loan is fully repaid, whichever comes first.
Costs Covered
The amount of the education loan for abroad studies issued relies on a number of variables, including the co-credit applicant's history, academic background, and reputation of the college or university. Some banks only cover a portion of the cost of schooling, but other banks pay the full cost. Ask your lender for a student loan & what expenses are covered by the loan. These expenses include tuition, lab and equipment fees, library and test fees, personal expenses, and airfare in the case of international education.
Moratorium Extension
There is a predetermined time during the loan term when the borrower is excused from repayment obligations. A major benefit of loans with a moratorium term is that you don't have to worry about making payments while you're studying abroad.
Prepayment Terms
The less interest accrues on your principal amount as the loan is repaid, the more money you will save. Ask your lender if there will be a prepayment penalty. As a result, after you land a job, you can come up with a plan to pay back the loan as quickly as you can.
Loan Processing Time
It's important to meet the deadlines while applying to universities abroad. The loan sanction letter is a crucial document that must be shown as proof of financial resources when applying for a visa and for a university. Asking several lenders about their loan processing times will help you organise your entire application procedure appropriately.
Effect of Exchange Rate
Always estimates the amount you will get at the time of distribution because any fluctuations in the exchange rate could have an impact on it.
It is essential that students check if they are eligible to apply for an education loan for abroad studies. Although each bank or financial institution will have particular criteria or eligibility for education loans; we have some general terms and conditions that are common among them all. The following is a list of the typical terms and conditions that any bank will usually adhere to when providing an education loan.
Note: Please be aware that each bank may have its own qualifying requirements, which must be followed when applying to that specific bank
Documents needed for education loans for abroad studies differ depending on the lender and the type of loan being requested. The applicant must be fully informed of the documentation needed to apply for a study loan abroad before applying for loan. The standard paperwork that almost all lenders demand is listed below:
Essentials
KYC Documentation
Address Proof
Academic Record Documents of the Applicant
For Salaried Co-Applicant
For Self-employed Co-Applicant
Collateral Related Documents (If applicable)
It is usually good to apply for an education loan for abroad studies a little early because the entire loan process—from loan application to approval and disbursement—takes time. Before understanding the whole application process; here are a few things that a student must do prior to officially applying.
Take the following actions to apply for a student loan through UniCreds:
Step 1: Check your loan eligibility online
Step 2: Seek professional loan advice to weigh your options
Step 3: Choose a lender and submit an online application
Step 4: Get the personalised education loan paperwork checklist
Step 5: Submit the necessary documentation for your student loans online
Step 6: Get the property and other legal evaluations completed
Step 7: After the lender approves your application for an education loan, obtain the loan sanction letter