The higher education landscape is rapidly growing, with studying abroad becoming a cherished dream for many. Everyone participates in the race to gain exposure to advanced academic environments and diverse cultures. However, that dream can be financially daunting. This is where Education Loans for abroad studies emerge as a solution to bridge the gap between your dreams and reality.
Why are Education Loans becoming necessary for higher education?
Higher education institutes are increasingly committed to providing a holistic experience, incorporating advanced technologies, industry-registered curricula, practical learning modes, and international exposure. However, this shift has led to rising tuition fees and intense competition for enrollment in reputed institutions, surpassing the financial capacity of many students. Despite their interest and merit, several students and their families opt for less expensive courses. Fortunately, Education Loans for overseas study come to the rescue, alleviating the burden of immediate economic constraints.
Features & benefits of Education Loans
Education Loans can help you live the dream of completing higher studies abroad. These comprehensive loans pay for several expenses in addition to the tuition fees. Apart from that, they also offer other valuable advantages —
1. Tax benefits: Education Loan interest payments are typically tax-deductible, which means that the interest on an Education Loan is eligible for a tax rebate under Section 80 E of the Income Tax Act 1961.
2. Flexible repayment options: EMIs are to be paid once students have completed their education, alleviating any immediate repayment concerns. Most lenders offer repayment plans with extended tenures, helping you strategise financial planning in the medium and long term.
3. Government schemes: Education loan subsidy schemes are implemented by the Indian Government to support students from economically weaker sections.
4. Builds a stable CIBIL score: Students get a chance to establish their credit history. By regularly paying off the EMIs, students can build on a favourable CIBIL score. Banks typically consider the applicant's CIBIL history and profile while sanctioning a loan. The score will enable you to secure loans in the future at lower interest rates and for larger amounts.
Process to apply for Education Loan for abroad studies
Applying for an Education Loan requires you to plan the process strategically. Here's a guide on how to go about it —
Do the initial research
- Firstly, check if the course and institution you've chosen, are recognised by banks or not.
- Do a thorough study of the amount you'll be needing and how much can you fund on your own.
- Determine the maximum loan amount you qualify for based on your chosen programme and the bank's policies.
- Compare multiple lenders offering competitive interest rates, flexible repayment terms, and other benefits. For example, Axis Education Loans may provide the sanction letter before admission (based on your profile).
- Understand if the loan requires any upfront margin money contribution.
Check if you're eligible
Below are the general Education Loan for abroad eligibility criteria set by most banks for applying for an Education Loan -
- The applicant must have an Indian citizenship.
- If the applicant is below 18, his or her parents will have to obtain the loan. In other cases, the co-applicant will have to show proof of regular income.
- The candidate must have obtained admission to a reputed international university, institution, or college.
- Apart from that, banks will determine the eligibility as per the bank's policy at the time of loan application and disbursement.
Fill out the online application form
Firstly, gather all the required documents. Here are common documents that you'll need -
- KYC documents
- Bank statements from the past six months
- An optional guarantor form
- Copy of the admission letter from the institute, along with the fee schedule
- Marksheets or passing certificates SSC, HSC, and degree courses
- Documents for collateral security, if applicable
An Education Loan is disbursed in multiple disbursements, which will require other documents. For instance, the first disbursement might need a demand letter from the college or university.
Most banks now offer simplified online application processes for Education Loans for overseas studies in India. All you need to do is provide accurate and complete information to expedite the approval process.
Types of Education Loans in India
- Education Loans can be categorized by location: Domestic (for courses within India) and study loans for abroad (for courses outside India).
- Within both categories, loans can be further divided by course type: Graduate, Undergraduate, and Professional.
- Finally, loans can be categorized by security: Loan against deposits, Loan against property, and Loan against securities.
Education Loans for abroad studies are not just financial instruments; they are the catalysts that help you in your academic aspirations. By choosing the right loan, meticulously planning your finances, and utilizing available resources, you can confidently navigate the journey and conquer your dream degrees. So, pack your bags, embrace the adventure, and let Education Loans empower you to chase your international educational dreams!
Also Read: The ultimate checklist for studying abroad
We understand that you might have so many doubts still, so here are some frequently asked questions that will help clear them —
1. Who can apply for an Education Loan in India?
Any Indian student wishing to pursue higher education abroad can apply for the loan. This includes undergraduate, postgraduate, and other programmes.
2. What is an Education Loan calculator and how to use it?
An Education Loan for abroad studies calculator is a tool that helps you calculate the estimated monthly EMI and strategize your payments based on your desired loan amount, the interest rate applicable, and your chosen repayment tenure. Education Loan for abroad studies interest rates differ from bank to bank.
3. What is required for an Education Loan for abroad?
To apply for an Education Loan for overseas studies, you typically need proof of admission at a foreign university/college, past academic records, a detailed cost estimate, and collateral documents (if applicable).
4. Who is eligible for student loans for abroad?
Students meeting bank-specific eligibility criteria, including academic scores, the credibility of your chosen programme, and family income, are eligible.
5. How to repay Education Loan?
Repaying the Education Loan usually starts after the course is completed or after a specified grace period. EMIs can be paid through various channels, including online banking, auto-debit, or post-dated cheques.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
