Studying abroad is a great investment but at a huge cost. To study in Australia, you need nearly 16 lakhs in your account to get the visa and the tuition fees starts at A$32,000. But do not let these costs stand in your way.
An education loan for Australia can help you achieve your dream. In this blog, we will cover all the costs of studying in Australia and how you can sponsor your dream with a smart education loan.
Overview of Education Costs in Australia
Application Fees: The college application is a starting point for all students. A single application form can cost you A$150 or more.
Tuition Fees: The biggest cost for an international student is tuition fees. In Australia, the average cost of bachelor’s degrees is somewhere between AUD $20,000 – $45,000 yearly. While for Master’s degrees is AUD $22,000 – $50,000.
Living Costs: This is the second biggest cost for students and often overlooked. Here is an estimate on how much you would be expected to spend in Australia.
- Accommodation: AUD $150 – $300 per week (shared accommodation, homestays, or student housing)
- Food: AUD $100 – $150 per week
- Transportation: AUD $30 – $50 per week
- Books and Study Materials: AUD $100 – $200 per semester
- Health Insurance: AUD $500 – $600 per year
- Phone and Internet: AUD $50 – $100 per month
- Entertainment and Social Activities: AUD $50 – $100 per week
Total Estimated Annual Cost: AUD 25,000 – 40,000 (approximately INR 15 lakhs – 24 lakhs)
International students are required by law to have approx. AUD $29,710 or ₹16 – ₹17 lakhs in their bank account to get a student visa approval for Australia.
Note: These are rough estimates to help you budget for your dream. Your lifestyle will determine your actual cost of studying in Australia.
Also Read: Best Time to Apply for Education Loans
Types of Education Loans for Australia
Here some types of education loans available for Australia in India:
- Secured Education Loans: Also known as collateral education loans, are loans where the student pledges collateral to secure funds for higher education. Collateral refers to valuable asset that you own. It can be a property or fixed deposit, to the lender as a guarantee for repayment.
- Unsecured Education Loans: An unsecured education loan is a loan that does not require any collateral. Most students flying abroad from India opt for this type of education loan. Unsecured education loans or non-collateral education loans are a huge relief for students who do not have collateral to pledge in lieu of a loan. It is also a good option for students who do not want to burden their parents.
- Education Loans without Co-applicant: This is a category of education loans where students do not need a co-applicant to sign on the loan with them. It is not available for all courses and can be hard to acquire.
Eligibility Criteria for Education Loans for Australia
Here’s the basic criteria you need to meet to get an education loan for Australia:
- You should be an Indian citizen
- You should have a good academic record and minimal backlogs!
- A Confirmation of Enrolment (CoE) from a recognized university in Australia.
- The course you have chosen must be accredited and recognized by your lender.
- Financial documents of the main applicant and the co-applicant.
- Collateral documents if you are opting for a secured education loan.
Application Process for Education Loans to Australia
Here are the steps to help you navigate this journey:
- The first step in the application process for education loans to study in Australia is to figure out the education loan providers and their terms. All lenders in India offer an education loan for Australia and you will have to compare interest rates, terms, and eligibility criteria from various banks, financial institutions, and government-backed loan providers.
- You will have to consider factors like repayment terms, moratorium periods, and processing fees.
- The second step is to gather the documents to help expediate the process of getting an education loan. Every lender needs a series of documents to support your claim to get your loan approved on time. Here are some documents you need:
- Admission letter called Confirmation of Enrolment: From your chosen Australian university or college.
- Course fee structure: Detailed breakdown of tuition fees, living expenses, and other costs.
- Financial documents: Income proof (salary slips, tax returns), bank statements, property documents (if applicable), and other relevant financial information.
- Identity proof: Passport, Aadhaar card, or other government-issued identification.
- The third step is to provide accurate and complete information about your personal details, academic background, financial situation, and loan requirements. Attach all necessary documents as per the lender’s guidelines and complete the application.
- The fourth step is to submit the completed application form along with supporting documents to the lender either in person, by post, or online.
- The fifth step requires waiting for the verdict. The lender will review your application and verify the authenticity of your documents. They may conduct credit checks to assess your creditworthiness. If your application is approved, you’ll receive a loan sanction letter outlining the loan amount, interest rate, repayment terms, and other conditions.
- The last step is disbursement. The loan amount will be disbursed in installments as per the agreed-upon schedule. The funds will typically be transferred directly to the university or college to cover tuition fees and other expenses.
Also Read: What is the Cost of Attendance?
Timeline for Application and Disbursement
The entire process can take anywhere from a few weeks to a few months. It’s advisable to start applying for the loan well in advance of your planned departure to the UK to ensure timely disbursement.
Starting early is essential because it allows you to negotiate a better deal. If you apply at the last moment, you are more likely to accept the first offer. This offer may not be favorable for your future self.
Required Documentation
4 sets of documents you need for an education loan in India to study in the UK:
Personal Documents
- Loan application form
- Passport-size photos
- PAN card and Aadhar card
- Indian passport
Academic and Professional Documents
- Marksheets for 10th, 12th & graduation
- Entrance exam results (like IELTS, GMAT, GRE, TOEFL, etc.)
- College prospectus
- Statement of cost of study/ Schedule of expenses
- Offer letter or a conditional admission letter (if received)
- Work experience proof (if any)
Financial Documents of the Applicant
- A/C statement for last 1 year in case of any previous loan from other Banks/Lenders
- Updated Income Tax Returns (ITR) with income for past 2 years
Financial Documents of the Co-applicant
In case of salaried co-applicant
- 6-month bank statements of salary account of the co-applicant
- 2-year ITR / FORM 16 co-applicant
- 3-month salary slips
- Collateral documents (if needed)
In case of self-employed co-applicant
- 8-months bank statements of savings & current account
- 2- years ITR statement
- Collateral documents (if needed)
Must Read: Co-Applicant’s Role in Education Loans: Eligibility
Understanding Loan Terms and Conditions
Here are some loan terms and conditions you must understand before applying:
- Interest rates: Different lenders offer different education loan rates to applicants. The interest rate is determined by your loan application details and it is not uniform. It can range from 11% to 14% per annum, depending on the bank and the borrower’s credit profile.
- Loan amounts: It differ based on the individual profile and the lender. Some lenders offer complete financing to students headed abroad while others may offer ₹40 to 50 lakhs to cover the cost of education.
- Tenure: The minimum loan repayment tenure for some lenders is 12 months, and maximum loan repayment tenure goes up to 12 years. Similarly, some lenders offer moratorium period to their borrowers.
- Margin money: It is the amount the applicant has to pay to get his/her education loan sanctioned. Margin money for an education loan is a certain percentage of the complete cost of education the borrower is required to pay for with his/her own funds.
Currency Exchange Rate Considerations
Currency fluctuations can significantly impact the cost of studying abroad. A weakening of the home currency against the Australian dollar can lead to higher loan amounts and increased repayment burdens. Take currency fluctuations into account before opting for an education loan.
Repayment Options for Education Loans
An education loan is a legally binding obligation. Before taking a loan, it’s crucial to comprehend the repayment obligations. Most loans involve EMIs, which are fixed monthly payments that cover both principal and interest.
Some loans may also offer grace periods, during which the borrower is not required to make repayments. However, interest may still accrue during this period. Education loans have a longer tenure than other loans allowing students to create a repayment plan.
Conclusion
Australia is a great place to study with some of the best universities. It is easier to get an education loan for Australia but finding the right one can be tricky. If you need help applying for an education loan, contact our experts today!
