Tips to Get Education Loans for Abroad Studies

Securing an education loan for abroad studies opens the door to a world of academic and personal growth.

Let’s break down the process for getting educational loans for abroad studies and find out the eligibility criteria, documents needed, how to get an education loan, and much more.

Education Loans for Abroad Studies

In an increasingly interconnected world, pursuing education abroad has evolved from being a mere aspiration to a transformative experience.

The exposure to diverse cultures, cutting-edge academic programs, and unparalleled opportunities for personal growth has made international education a sought-after endeavour.

However, the costs associated with studying abroad can be overwhelming. This is where investment in education loans comes to the rescue, acting as a bridge between dreams and reality.

Are you eligible to get a study loan abroad?

To be eligible, applicants often need to meet certain requirements that the bank has set. For instance, if you are applying for a study loan to study abroad from India then here are the basic eligibility criteria that you need to meet.

• The applicant must be 16 years old and an Indian citizen
• Co-applicants must be an Indian citizen
• Ability to offer collateral for certain cases
• Co-borrower(s) must have a bank account in any bank in India with cheque facilities and a good credit history.
• Confirmed admission to the colleges before disbursement.

Admission Confirmation: Having an admission offer from a recognized foreign institution is a prerequisite for applying for an education loan. The institution’s reputation and the chosen course play a role in determining loan approval.

Co-Applicant/ Guarantor: Many lenders require a co-applicant, usually a parent or guardian, to share the responsibility of repaying the loan.

The co-applicant’s financial stability can influence the loan’s terms.

Collateral: Depending on the loan amount, lenders might ask for collateral as security.

Property, fixed deposits, or other priceless assets can be used as collateral. Eligibility criteria differ on the basis of your nationality.

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How should you apply for an education loan abroad?

Navigating the education loans for abroad studies application process can be overwhelming, given the multitude of options and procedural complexities.

To get an education loan, you can visit public and private banks and international lenders, find out the interest rate and start the process with your chosen provider. Rather than visiting all the banks, you can opt for an education loan counselor.

An educational loan counselor is an expert who serves as an intermediary between aspiring students and financial institutions, helping them find the best loan options tailored to their needs.

They streamline the loan application process, help with documentation, and get your fast approval. Education loan counselors can help you save both time and effort.

Documents you need for an Education Loan

When applying for an education loan, the documentation process is a crucial step. Commonly required documents you must have:

• Loan application form
• Passport-size photos
• PAN card and Aadhar card
• Indian passport (if you are going abroad)
• Marksheets for 10th, 12th & Graduation
• Entrance exam results (like IELTS, GMAT, GRE, TOEFL, etc.)
• Offer letter or a conditional admission letter (if received)
• Work experience proof (if any)
• In the case of self-employed co-applicant
  • 8-month bank statements of savings & current account
  • 2- years ITR statement
  • Collateral documents (if needed)
• In the case of salaried co-applicant6-month bank statements of the
  • salary account of the co-applicant
  • 2-year ITR / FORM 16 co-applicant
  • 3-month salary slips
  • Collateral documents (if needed)

How to use the Education Loan Calculator for abroad studies?

An education loan calculator is a way to find out the monthly payments you will be making to close your student loan!

An education loan for abroad studies is a huge responsibility, and the calculator helps you find out the EMIs you will potentially be repaying, the duration of repayment, and the total payable amount after adding the interest. It’s very easy to use and can help you determine the future EMIs on your loan.

For instance, you decide to take a loan of Rs. 25,00,000 at an interest rate of 10%. The decided loan tenure is 10 years. If you put all these details in an educational loan calculator, it will tell you the exact EMI amount, which is Rs. 33,038, the total payable amount, that is Rs. 39,64,522 along with the payable interest amount (Rs. 14,64,522) on top of the principal amount of Rs. 25 lakhs.

An education loan calculator is a powerful tool that helps you prepare for the future, let’s gauge the estimated costs you will be repaying and helps you budget for it in advance.

What is the interest rate of education loans abroad?

The interest rate depends on many factors. The interest rate of education loans for abroad studies is determined by the bank, individual profile, co-applicant history, and whether it’s a secured or unsecured loan.

If you are applying with EduFund, you can get low and attractive interest rates starting from 9% with the top loan providers like Prodigy Finance, IDFC First Bank, ICICI Bank, Axis Bank, and many more.

Things to Know Before Choosing an Education Loan

Selecting the right education loan requires a careful evaluation of several factors:

Interest Rate: The interest rate significantly impacts the overall cost of the loan. For the best deal, compare the rates provided by several lenders.

Repayment Tenure: Longer repayment tenures might result in lower monthly installments but higher overall interest payments. Choose a tenure that aligns with your financial plans.

Processing Fees: Understand the processing fees associated with the loan application. Some lenders might have hidden charges that could affect your repayment burden.

Tax Benefits: In some countries, education loan interest payments are eligible for tax deductions. Familiarize yourself with the tax implications of the loan.

Prepayment Terms: Check if the lender allows prepayment without penalties. This can help you save on interest payments if you have the means to repay the loan early

Higher interest rate of education loans for abroad:  While investing in education loans serves as a lifeline for many students aspiring to study overseas, the interest rates can vary significantly. Factors like the bank’s policies, the applicant’s credit history, and the loan type (secured or unsecured) play a role in determining the interest rate, exchange rate fluctuations, repayment challenges in foreign currency, and the global economic scenario.

Importance of selecting the right repayment plan

Choosing the right repayment plan for your education loan is a critical decision that can significantly impact your financial well-being post-graduation.

Financial institutions often offer various repayment options, such as fixed, variable, or income-based plans. Understanding the nuances of each plan and aligning it with your future income projections and financial goals can ensure a smoother repayment process and alleviate undue stress.

Partnering with EduFund: Shaping a Bright Future for International Education

Pursuing education abroad is a transformative experience that opens doors to academic and personal growth. However, the costs associated with international education and education loans for abroad studies can be daunting. Amidst this process, EduFund stands as a reliable partner, offering attractive interest rates and partnering with esteemed institutions to make the dream of studying abroad a reality. EduFund provides access to a range of loan providers, each with its own interest rate structures. Keeping in mind that lower interest rates can significantly reduce the long-term financial burden, applicants should strive to secure the best possible rate for their circumstances.

With EduFund’s support, students can embark on their educational journey confidently, knowing that their financial needs are well taken care of.