How to get Education Loan for Abroad Studies

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How to get Education Loan for Abroad Studies

How to get Education Loan for Abroad Studies

Overview:

Studying abroad can be a life-changing decision in one’s life. However, this dream is sometimes not easy to achieve due to a lack of funds. So, therefore finding for yourself the correct type of study loan is a must. Those who want to continue higher studies abroad but find it difficult to arrange funds should opt for a study loan.

Banks in India offer various schemes and offers depending on the type of institution and course selected by the student. Most of these education schemes come with flexible repayment options and allow the borrower to arrange his finances accordingly. 

Education loans carry out a moratorium period with which students can repay their loans after 1 year or six months of completing their education or after getting a job.

How to get Education Loan for Abroad Studies

Features of Education Loans

Here is a list of features of education loans that will make you understand it in more detail:-

  • Any individual aged 18 – 35 years of age can avail an education loan to pursue studies at any approved university abroad.
  • Students can get an education loan for management, medical, engineering courses and postgraduate degrees, arts, architecture, hotel management, pure science etc.
  • A margin of 5% to 15% has to be brought by the borrower for taking loans for foreign studies.
  • During the moratorium period, the borrower has to pay the interest with the principal payment starting when the loan tenure begins.
  • Applicants can repay education loans in monthly instalments via post-dated cheques or through ECS.
  • Generally, banks sanction a study loan for up to seven years, including the moratorium period.
  • Banks usually sanction a loan of up to 20 lakhs with a moratorium period and up to 10 lakhs without a moratorium period.
  • The central government has also provided an interest rate subsidy scheme for repayment done during the moratorium period to
    benefit the Weaker Sections of the Society.
  • No security is required for a loan of up to 4 lakhs.

How to get Education Loan for Abroad Studies

Top education loan providers in India

Here is a list of top education loan providers in India fulfilling students who wish for studies abroad.

Axis Bank:

Interest Rate 13.70% p.a. onwards
Maximum Loan Amount Rs. 75 lakh
Minimum Tenure 15 years
Processing Fees Up to Rs. 10 lakh: Nil Above Rs. 10 lakh: Rs.5000 + GST

 

Bank of Baroda:

Interest Rate 8.75% p.a. onwards
Maximum Loan Amount Rs 80 lakh
Minimum Tenure 15 years
Processing Fees Nil

 

Canara Bank:

Interest Rate 9.35% p.a. onwards
Maximum Loan Amount As per eligibility
Minimum Tenure 15 years
Processing Fees Nil

 

Federal Bank:

Interest Rate 10.05% p.a. onwards
Maximum Loan Amount Rs. 20 lakh
Minimum Tenure 15 years
Processing Fees Nil

 

HDFC Bank:

Interest Rate As per scheme
Maximum Loan Amount Rs 45 lakhs
Minimum Tenure 14 years including moratorium period
Processing Fees As per the criteria of the bank

 

State Bank of India:

Interest Rate 8.65% p.a. onwards
Maximum Loan Amount Rs 1.5 crore
Minimum Tenure 15 years
Processing Fees Rs. 10000

 

Punjab National Bank:

Interest Rate 8.80% p.a. onwards
Maximum Loan Amount As per the requirement as repayment capacity
Minimum Tenure 15 years
Processing Fees 1% of the loan amount, subject to a minimum amount of Rs. 10,000

 

ICICI Bank:

Interest Rate 10.50% p.a. onwards
Maximum Loan Amount Rs. 1 crore
Minimum Tenure 12 years
Processing Fees As per RAAC pricing + GST

How to get Education Loan for Abroad Studies

What are the documents required for applying for an Education Loan for Studying Abroad?

The applicant has to submit the following document to the bank:-

  • Admission letter
  • KYC documents
  • Detailed cost breaks up of the course.
  • Loan applicable form filled with photographs.
  • Guarantor’s Account statement of last 6 months
  • Guarantee’s IT Return for last 6 month
  • Proof of income of the co-borrower
  • PAN card and Aadhaar card
  • Statement of assets and liabilities to be presented by the co-borrower.
  • Academic documents

How to get Education Loan for Abroad Studies

Tax Benefits on Education Loan

You can get a tax deduction on the interest paid on your education loan under Section 80E of the Income Tax Act, 1961. This privilege is only given to individual borrowers for higher education. The tax benefit is provided in all fields of study in India and overseas. It also includes vocational as well as regular courses.


FAQ’s on Education Loans for Studying Abroad

Can an average student study abroad?

One of the most prominent reasons for study abroad applicants abandoning their dreams is the expensive cost associated with doing so. Furthermore, obtaining a scholarship is difficult if you are an average student with an average profile. However, obtaining a scholarship is contingent on a number of things.
 

Does SBI charge any processing fee on its foreign education loan?

Yes, SBI charges a processing fee of Rs.10,000 for every application.

Which exam should I give to Study Abroad?

International Entrance Exams that are required to qualify to Study Overseas are as follows:-
  • TOEFL AND IELTS
  • GRE
  • GMAT
  • SAT
  • MCAT AND LSAT