Study MBBS Abroad: Your Pathway to Affordable Medical Education Overseas
Complete Guide for Indian Students on Education Loan for Abroad Studies
The entire study abroad journey isn’t an easy one. From choosing the right course and college to getting an admission and ticking off all the crucial boxes in that process is a bit challenging. The study abroad journey, besides being overwhelming, is exhausting too. And when we consider financial constraints on a middle-class household, then the dream of studying abroad seems unachievable. However, there are several means of financial aid through scholarships and grants. If somehow a student is unable to get those funding options, then they can go for education loan for abroad studies.
Today, in this blog we are going to share all the crucial information on education loan for abroad studies. This blog is your ultimate guide to know how you can fund your education abroad and fulfil your dream. So, without further ado, let’s get to the point.
How to Get Education Loan for Abroad Studies?
Many Indian (or international) students seem to let go of their dream of studying abroad because of financial constraints. However, as we always say, education is the best investment, then we you are ambitious about something, you better not let anything come in between. To manage your finances, you can always take an education loan. There are two types of education loans: secured education loans and unsecured education loans. Let’s explore more about them before knowing how to get education loan for higher studies.
Types of Education Loan
- Secured Education Loan: In simple terms, a secured education loan is given against collateral. This can be again a property, fixed deposit, or mortgage. These loans have lower interest rates, as the lender has less risk.
- Unsecured Education Loan: The second type is unsecured loans. These loans are granted without any collateral and rely on the seeker’s creditworthiness. Usually, the rate of interest on these loans is higher, ranging between 1.5% to 4%.
Now that you have learned about types of education loans, let’s see how to get education loan for higher studies easily.
How to Get Secured Education Loan for Higher Studies?
To successfully get an education loan for your higher education abroad, here is all what you need to do.
1. Choose the Right Bank or Financial Institution
The loan approval process is time consuming. So, it is better advised to start preparing for your education loan in advance. Now, the first step is to research your bank options. You must begin by thoroughly researching the bank options to see who can provide you with education for abroad studies. While researching, jot down and compare the amount you will get, the interest rate, the repayment method and periods, loan process fees, and other crucial terms and conditions of different banks. Only after making a list and doing in-depth research, start with the application process. However, if you are confused about which bank is the best suited for you, you can ask for our help. The finance team at MetaFinance knows what’s best for you and we will ensure you get an education loan with utmost ease.
2. Check Eligibility Criteria
When you are looking to secure an education loan for your higher studies abroad, you need to check a few things. Besides looking at the interest rate and repayment methods, you also need to check the eligibility criteria. To get a secured education loan, you must be an Indian citizen and have proof of your nationality like Aadhar card. Along with this, you must have confirmed admission from a well-renowned foreign university. Having a strong academic record will make it easier for you to get an education loan for sure. Furthermore, you may also require a co-applicant (they can be your parent or guardian). To make your education loan process easier, you can always get help from our experts. Our team of professionals with guide you in securing an education loan as per your preferences.
3. Plan your Loan Requirements
When you are struggling to get an education loan for your higher studies abroad, you must also determine your loan amount. Based on the course you want to pursue and the college and country you are going to, there are several factors you must consider before finalising your loan amount. For instance, if you want to study a master’s abroad, then compare your options, look at the tuition fees, accommodation and living expenses, travel expenses, books and study material expenses, and insurance expenses. Only then will you get an idea of how much money you are required. The abroad education process is surely an expensive one, and you might not get the entire cost coverage through family savings, grants, or scholarships. Hence, you must check the loan amount you require, and which bank is giving you that much.
4. Gather Required Documents
The next step in securing an education loan is gathering all the crucial documents. Students applying for an education loan for the first time might not know about the requirements. As one missing or wrong document can cost you your study abroad dream, hence, it is better to have the documents handy. Some of the crucial documents that you require for a successful education loan approval are:
- Admission letter from the university
- Academic records (mark sheets and certificates)
- Loan application form
- Proof of identity, address, and co-applicant’s income
- Collateral documents
With all these documents you can easily apply for an education loan.
5. Apply for the Loan & Wait for the Approval!
The last step in the process of getting a secured education loan is applying for the loan and wait for the approval. Students can apply for education loan online through the bank portals or can visit the branch for further assistance. Once the bank is satisfied with the documentation, they will initiate the approval process. The turnaround time of secured education loans is between 15 to 30 working days. However, the duration depends on various factors like document verification, background checks, and collateral evaluation. The time period can stretch to even 2 months in some cases. Once the loan is approved, it will directly be sent to the university all at once or in instalments as per the requirements.
How to Get Education Loan for Abroad Studies Without Collateral?
Now that you have seen how to get a secured education loan, if you don’t want to take education loan against your property, you can take unsecured loans. The unsecured loans are granted without needing any collateral. In this section, let’s explore how you can get education loan for abroad studies without collateral.
Getting an unsecured loan means getting it without any collateral and on your creditworthiness. So, to get an unsecured education loan, here’s what all you need.
- Maintain a strong academic profile
- Choose a reputed university with high global ranking
- Ensure to have a co-applicant with a strong financial background
- Approach NBFCs or international lenders for higher loan amounts without security
Now, if we talk about NBFCs and international lenders, along with public sector banks, then here is your list for the same.
- Public Sector Banks: Axis Bank, ICICI Bank, Union Bank of India, SBI Global Ed-Vantage, Bank of Baroda, Punjab National Bank, and Canara Bank provide unsecured loan for up to 8 lakhs under the Indian Banks; Association (IBA) model scheme.
- NBFCs (Non-Banking Financial Companies): HDFC Credila, Avanse, Auxilo, and InCred provide unsecured loans for up to 40-50 lakh depending on student’s academic background and university reputation.
- International Lenders: Some international lenders helping students with education loan without collateral are Prodigy Finance and MPower Financing. However, they might have higher interest rates.
Now if you want to have a look at some of the best education loan options available for abroad studies by Indian Government, then let’s have a quick look at that.
Education Loan for Abroad Studies by Indian Government
The Indian government support Indian students through various public sector banks and financial institutions that provides education loan to aspiring Indian students. Some of these options are:
- Central Sector Interest Subsidy (CSIS) Scheme
- Dr. Ambedkar Central Sector Scheme for Interest Subsidy (ACSIS)
- Padho Pardesh Scheme
- National Minorities Development & Finance Corporation (NMDFC) Loan
Best Education Loan for Abroad Studies
The options for education loan are not limited. And if by one way or another you want to get the best education loan for abroad studies, then here is a list of top options for Indian students to get education loan from
| Bank/Institution | Loan Amount | Interest Rate | Collateral Requirement |
|---|---|---|---|
| HDFC Credila | Customized | 10.5% – 12% | Optional |
| Avanse | Up to INR 50 Lakh | 10% – 13% | Optional |
| Prodigy Finance | Varies | 9% – 12% | Not Required |
| Axis Bank | Up to INR 40 Lakh | 10.5% – 12% | Required above INR 7.5 Lakh |
| ICICI Bank | Up to INR 1 Cr | 10% – 11.5% | Required above INR 7.5 Lakh |
| Union Bank | Up to INR 1.5 Cr | 9.8% – 10.75% | Required above INR 7.5 Lakh |
| Auxilo | Up to INR 50 Lakh | 10% – 12.5% | Optional |
| State Bank of India (SBI) | Up to INR 1.5 Cr | 9.5% – 10.5% | Required above INR 7.5 Lakh |
| Bank of Baroda | Up to INR 1.5 Cr | 8.9% – 10.25% | Required above INR 7.5 Lakh |
| InCred | Up to INR 40 Lakh | 11% – 13% | Not Required |
MetaApply- Your One-stop Solution for Education Loan Assistance
With this, we believe you have got all the crucial information you’ve wanted for education loan for abroad studies. So, we would suggest, if you are planning to study abroad and have decided what and where to study, then start managing your finances now. The early you begin the more there are chances of getting accepted in a college, easy visa process, and applying for an education loan.
However, do remember one thing, if your education loan isn’t enough to give you a comfortable living abroad, then you can always choose part-time working options. Along with studies, you can work abroad and earn extra money to help your finances. After graduation, you can easily bag a nice paying job anywhere in the world. So, don’t frighten yourself now without taking the first step.
In this journey, the MetaApply professionals are here with you. We provide end-to-end loan process assistance along with guiding you at each step of your study abroad journey. Therefore, if you have aimed high, then let’s achieve it together!
Frequently Asked Questions
Yes, some banks and NBFCs offer 100% loans that covers tuition fees, living expenses, travelling cost, and more. However, to avail an education loan that can cover the entire cost, you may require collateral or a co-applicant. To reduce the financial constraints, students can availa government schemes and scholarships as well.
To decide which is the best education loan for abroad studies depends on factors like interest rates, repayment terms, and collateral requirements. There are some government-backed or public sector banks that offer education loan at lower interest rates. Meanwhile some private lenders provide flexible options as well. So, to decide which one is best, students are advised to compare between options before deciding.
Yes! If you want to study abroad and there is a financial constraint, then taking an education for abroad studies is the best option. However, do ensure to manage it wisely. Education loans offer tax benefits and improve credit scores. Although do think about job prospects and repayment capacity before borrowing the loan to avoid financial strain.
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