Studying abroad is a cherished aspiration for numerous individuals. While the idea of pursuing education in a foreign country is filled with enthusiasm, the financial expenses involved can be quite daunting. This is where overseas education loans step in, offering students the necessary financial support to follow their academic ambitions.
According to a leading news channel, as many as 83% of students report cost as the most significant barrier to studying abroad. The pursuit of higher education overseas can be a life-changing experience, but it often comes with a hefty price tag. Thankfully, study loans for abroad can help turn your dreams into a reality.
Studying abroad is a dream for many, offering a chance to gain valuable international experience, broaden your horizons, and access high-quality education. However, the financial burden can be overwhelming. The good news is that various financial assistance options, including study loans, scholarships, and grants, are available to make your dream of international education a reality. Among these, ERI Grants stand out as a valuable resource for students seeking support to pursue educational opportunities abroad.
Study loan for abroad eligibility criteria
The following are typical eligibility requirements for education loans for pursuing studies abroad:
- The applicant should be an Indian citizen within the age range of 18 to 35 years to be eligible for a loan.
- The applicant must have obtained admission to a recognized foreign institute or university based on merit or through a qualifying entrance examination.
- A minimum academic performance of at least 50% in the candidate’s previous educational qualification is typically required.
Best abroad education loan options
State Bank of India:
- Loan Quantum – Up to INR 1.5 cr (For secured loans)
- Interest Rates – 10.65% – 11.15%
- Margin Money – 10% – 15%
- Processing Fee – INR 10,000 + GST
Union Bank of India:
- Loan Quantum – Up to INR 1.5 cr (For secured loans)
- Interest Rates – 8.8% – 11.2%
- Margin Money – 15%
- Processing Fee – INR 5000 (Refundable)
ICICI Bank:
- Loan Quantum – Up to INR 50 Lakh (For unsecured loans)
- Interest Rates – 10.85% – 12.25%
- Margin Money – 0% – 15%
- Processing Fee – 0.5% of the sanctioned amount
Axis Bank:
- Loan Quantum – Up to INR 50 Lakh (For unsecured loans)
- Interest Rates – 11% – 11.15%
- Margin Money – 5%
- Processing Fee – 0.75% of the sanctioned amount
To know more about abroad education loan visit – https://www.gyandhan.com/study-abroad-education-loans
Key features of Education loan for abroad studies
When applying for an education loan to study abroad, it’s crucial to consider the following key features:
- Collateral requirement
- Secured education loans necessitate collateral, which can be an asset like property, land, or fixed deposits that you pledge as security for the loan.
- The value of the collateral plays a significant role in determining the loan amount and interest rate.
- Leading banks such as SBI, BOB, and UBI often require the collateral’s value to be at least 90% of the loan amount.
- Margin money
- Margin money represents the portion of the total education cost that the borrower is responsible for, with the remaining amount covered by the bank as a loan.
- Typically, most banks require a margin of 5% to 15% of the total course cost for loans exceeding INR 4 Lakhs.
- This means the bank will fund between 85% to 95% of the total course cost, and the student will need to provide the remaining amount as margin money.
- Property evaluation charges
- In secured education loans, the collateral is evaluated to assess its value and suitability as loan security.
- This evaluation involves a comprehensive assessment of the collateral’s market value, physical condition, location, and legal status.
- The borrower may be responsible for the costs associated with this evaluation, usually around INR 7,500 to 10,000. The evaluation report influences the loan amount, interest rate, and repayment terms.
- Processing fees
- Banks typically charge a processing fee for handling the loan application. The fee amount can vary based on the lending institution and the loan amount.
- As a rule of thumb, banks charge around 1% of the loan amount as processing fees. For instance, for a loan of INR 10 lakhs, the processing fee could be up to INR 10,000.
- Additionally, some banks may impose extra charges for services like property evaluation and legal documentation.
- Tax benefits
- Secured education loans from public banks can offer tax benefits under Section 80E of the Income Tax Act, 1961.
- This section allows borrowers to claim deductions on the interest paid on the education loan, which can be taken for the education of the borrower, spouse, or children.
- There’s no upper limit on the deduction amount, but it’s applicable only to the interest and not the principal.
- Alternative lenders
- In addition to traditional banks, there are Non-Banking Financial Companies (NBFCs) that provide financial assistance to students pursuing education abroad.
- NBFCs are financial institutions offering banking services without a banking license, and they can be another source of funding for international education.
- Studying abroad is a significant investment, and being aware of these loan features and options is essential for making an informed financial decision to support your educational aspirations.
If you find yourself uncertain about which lender to select for your education loan, consider connecting with GyanDhan, an education financing platform that specializes in assisting students in securing funds for their higher education in India and overseas. We have established partnerships with leading banks in India, including SBI, UBI, BOB, ICICI Bank, Axis Bank, and IDFC First Bank.
Our team of expert counselors is dedicated to providing personalized support throughout your loan application process. They will:
- Thoroughly evaluate your profile.
- Engage in discussions with you to understand your specific loan requirements.
- Offer tailored recommendations for the most suitable lender based on your needs.
- Guide you through every step of the loan application process.
- Assist in addressing any challenges or issues that may arise along the way.
With the right lender and a well-structured financial plan, you can turn your dreams of studying abroad into a reality. Initiate your journey towards securing an education loan for overseas studies today by checking your eligibility here.