Simplifying Education Loan for Abroad studies!

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 student loan programmes are available from these lenders, but picking the one that is best for you might be challenging. 

Different types of Education Loans to study abroad

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 overseas studies, the applicant is not required to put up any security. This is an education loan for overseas 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.

Top Student Loan Providers for Studying Abroad in India

Check out these top government and private student loan providers in India:

Axis Bank

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

• There is no margin on student loans up to Rs. 4,000,000
• 15% interest rate on education loans up to Rs. 4,00,000 on bank loan for study abroad
• Your proposed education loan can be released two days after it has been approved
• Once the loan is authorised, one can also reimburse the previous instalments made toward the course that were refinanced.

Bank of Baroda

Student loans for college 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

• Processing fees: For loans beyond Rs. 7.5 lakhs, 1% (maximum Rs. 10,000)
• There are no processing charges for transactions up to Rs 7.50 lakh
• Loans up to Rs. 4 lakhs have no margin
• No cost debit card
• There won't be any fees for the paperwork
• No security required for up to Rs. 7.50 lakh

Top NBFCs for Study Abroad Education Loans

Numerous NBFCs, in addition to banks, provide education loan for overseas studies. NBFC frequently have fewer requirements for education loan for abroad eligibility.

Avanse

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:

HDFC Credila

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.

Auxilo 

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:

InCred

All prospective students may apply for study abroad loan through the NBFC InCred. The following information relates to their loans for studying abroad:

Education Loan For Abroad Eligibility

It is essential that students check if they are eligible to apply for a student education loan for study abroad. 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.

• The candidate must be an Indian national
• If the applicant is under 18 years old, then her or his parents will have to take out the loan
• The candidate must have a strong academic record
• The candidate must have been accepted to a reputable overseas university, institution, or college
• The applicant's chosen course must be technical or professional because banks prefer courses that are job-oriented

Note: Please be aware that each bank may have its own qualifying requirements, which must be followed when applying to that specific bank

What are the Documents Required For Abroad Education Loans?

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 education loan. The standard paperwork that almost all lenders demand is listed below:

Essentials

• Filled application form 
• Photographs: Passport-size photographs of the applicant and the co-applicant. 

Identity Related Documents

KYC Documentation

• Aadhar Card
• PAN Card
• Driving License

Address Proof

• Aadhar Card
• Valid Passport
• Valid water/electricity/ LPG Bill
• Voter’s ID card
• Current House Lease Agreement

Academic Record Documents of the Applicant

1. Proof of Admission
2. 10th Result
3. 12th Result
4. Undergraduate Result Semester Wise (If required)
5. Entrance Exam Result - Abroad institutes (GRE, GMAT, TOEFL, etc.) 
6. Entrance Exam Result- Domestic institutes (CAT, CET, GMAT, CMAT, JEE, NEET, GRE, etc.)

Financial Documents of the Co-Applicant

For Salaried Co-Applicant

• Last 3 months’ salary slips
• Bank account statement for the previous six months
• Copy of Form 16 for the last two to three years or a copy of IT Returns for the last two to three fiscal years, acknowledged by the Income Tax Department (salary account)

For Self-employed Co-Applicant

• Business address proof (If Applicable) 
• TDS Certificate (Form 16A, if applicable) 
• Last 3 years ITR Certificate of qualification (for C.A./ Doctor and other professionals) 
• Bank Account statement for the last 6 months

Collateral Related Documents (If applicable)

• Title deed & Sales Deed 
• Allotment letter 
• Registration receipt 
• Tax copy or electricity bill 
• Chain deed of 30 years 
• Government-approved building plan  
• OC and Completion Certificate (if the property is constructed)

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.

How to Apply for an Overseas Education Loans?

It is usually good to apply for an overseas education loan 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. 

• Check to see if the course you plan to enrol in is accepted by the banks
• Determine how much of a loan you will need and how much you can arrange on your own
• Choose the student loan that best suits your needs by comparing those offered by various banks for studying abroad

Take the following actions to apply for a student loan:

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