Education Loan For Studying Abroad!

Over the past five years, the number of Indian students pursuing education abroad has doubled, reaching approximately 13.4 lakh as of the last fiscal year. This remarkable growth underscores the rising aspirations of Indian students for global education.

However, studying abroad comes with significant financial demands, requiring careful investment. Despite the availability of funding options like scholarships and personal savings, education loan for abroad studies remain one of the most prominent and widely used methods of financing international studies in India, offering a higher return on investment through enhanced opportunities and career prospects.

Education Loan For International Students - Overview

An international education loan is a specialised financial product designed to help students fund their education abroad.

These loans cover various expenses associated with studying in a foreign country, including tuition fees, living expenses, travel costs, and other related costs like books, insurance, and equipment.

Types Of Education Loans

There are two types of education loan for abroad studies on the basis of Collateral. Both types are explained in detail below:

Secured Education Loan: A secured study loan, often known as a collateral education loan, 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 loan acceptance.

Unsecured Education Loan: In the case of an unsecured loan, also known as a non-collateral 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 for overseas studies is a bit 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 abroad education loan without collateral, a minimum co-applicant income is required.

Key Features Of Study Abroad Education Loan

Whether secured or unsecured, these loans cover various expenses, from tuition fees to living costs, and provide flexible repayment options to suit different financial situations.

The table below outlines the key features of overseas education loan, helping you understand the essential aspects to consider when planning your financial journey.

Eligibility Criteria For Abroad Education Loan

It is essential that students check if they are eligible to apply for student loans for studying 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 usually follows 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

Documents Required For Education Loan For Abroad Studies

Having the right documentation is crucial for a smooth and hassle-free process when applying for an education loan for overseas studies.

While specific requirements may vary depending on the lender and the type of loan, there are certain standard documents that most lenders request.

These include identity proof, academic records, financial details of the co-applicant, and collateral-related documents if required.

The table below summarises the list of documents required for education loans for global studies:

How To Get Education Loan For Abroad Studies Through UniCreds?

Funding your international education through UniCreds opens up a world of opportunities, ensuring a seamless and stress-free process. Here's how we make the journey smooth for you: 

1. Free Eligibility Assessment and Consultation

• Online Eligibility Tool: Use our easy-to-access online tool to check if you meet the basic criteria for an education loan.
• Personalised Consultation: Speak with a UniCreds advisor via chat or visit our offices in Mumbai or Hyderabad to discuss your education plans and financial needs. Our expert counsellors will assess your eligibility and answer any questions about the loan process.

2. Simplified Document Collection

• Comprehensive Document Checklist: We provide you with a detailed list of all the required documents for your loan application.
• Assistance with Documentation: Our team will guide you in collecting and organising the necessary paperwork, ensuring a faster and hassle-free process.

3. Error-Free Application Process

• Expert Guidance: We’ll assist you in completing your loan application forms with accuracy and attention to detail.
• Application Review: Before submission, we review your application to ensure all information is correct and complete, minimising delays.

4. End-to-End Follow-Up and Communication

• Regular Updates: We keep you informed about your application status and handle all communication with the lender on your behalf.
• Support When Needed: For personalised assistance, you can visit our Mumbai or Hyderabad offices or contact our advisors online anytime during the process.

5. Loan Approval and Disbursement Assistance

• Clear Explanation of Loan Terms: Our advisors will explain the loan terms, conditions, and repayment plans in a straightforward manner, ensuring you understand every detail.
• Efficient Disbursement: We guide you through the steps required for the quick and efficient disbursement of your loan, making funds available when needed.

What Is The Right Time To Take Student Loans For Overseas Study?

Timing is a critical factor when applying for a study abroad education loan to ensure a smooth and stress-free process. Here's how to determine the ideal time:

1. During University Applications

• Start exploring loan options as soon as you begin applying to universities abroad.
• Research lenders, eligibility criteria, and loan terms to understand your financing options early.
• Some lenders offer pre-approval based on your academic profile, which can be beneficial during university applications.  

2. After Receiving Your Admission Letter

• The most appropriate time to formally apply for a loan is after you receive an admission offer from a recognised university.
• Most lenders require proof of admission, so having this letter in hand streamlines the process.

3. Before Applying for a Student Visa

• Many countries require proof of funds for student visa applications. Ensure your loan is sanctioned before starting your visa application.
• Factor in the processing times for both the loan and visa applications to avoid delays.

4. At Least 3-4 Months Before Your Course Begins

• Applying for a loan at least 3-4 months prior to your course start date allows enough time for documentation, verification, and loan sanctioning.
• Early application ensures timely disbursement of funds, which is crucial for tuition fee payments and living arrangements.

5. After Exploring Scholarships and Other Funding

• If you’ve applied for scholarships or grants, wait for the results before applying for a loan. This helps calculate the loan amount required to cover the funding gap.
• Keeping education loans as a backup ensures you are financially prepared if other funding sources fall short.

Best Education Loan For Abroad Studies

Regarding funding your education abroad, both banks and Non-Banking Financial Companies (NBFCs) offer the best solutions tailored to different financial needs.

Banks are known for their competitive interest rates, especially on secured loans that require collateral, and are an excellent choice for students admitted to well-recognised institutions.

They also provide flexible repayment terms and long-term options. NBFCs, on the other hand, cater to students seeking faster processing times and simplified eligibility criteria.

While NBFCs may offer higher interest rates, they are often more accommodating for students who may not meet traditional banking requirements or need unsecured loans. Here is a list of top banks and NBFCs to choose from: 

Top Banks For Overseas Education Loan

Regarding education loans, private banks often charge a processing fee ranging from 0.5% to 2% of the sanctioned loan amount, depending on the lender's policies.

Additionally, most private banks require borrowers to provide margin money, typically 10% to 15% of the total cost of education.

Top NBFCs For Abroad Education Loans

Top NBFCs typically charge processing fees ranging from 0.5% to 2% of the loan amount, depending on the lender and the applicant’s profile.

These fees are a one-time charge to cover the evaluation and administrative costs associated with the loan application.

International Education Loan Repayment

Taking an education loan through UniCreds is a big step toward achieving your dream of studying abroad. Don’t worry about repayments—we’re here to support you at every stage and make the process simple and hassle-free.

• Focus on Your Studies: While you’re studying, you can choose to pay only the interest on your loan. This gives you more financial freedom while focusing on your studies.
• Easy Repayment After Graduation: Once you finish your course and the moratorium period, you’ll repay the principal and interest. UniCreds will help you understand your repayment plan and find an option for your future earnings.