How to get an Education Loan to Study Abroad in India in 2024

Studying abroad is a dream for many Indian students, but financing it can be a major hurdle. To bridge this gap, securing a student loan becomes imperative. But before you proceed, it’s crucial to debunk common myths and misconceptions surrounding education loans for study abroad. Take a look at 9 student loan myths you should not fall for to ensure you have accurate information before making any decisions.
Here’s a comprehensive guide on how to get a student loan to study abroad in India:

Why is an education loan required for studying abroad?

The decision to pursue higher education abroad is often driven by aspirations for academic excellence and exposure to diverse cultures. However, the financial burden associated with international education can be overwhelming. Tuition fees, living expenses, and unforeseen costs can quickly escalate, necessitating financial assistance. A student loan for study abroad in India provides the necessary funding to fulfill this dream.

What is the eligibility criteria for an education loan for studying abroad?

To qualify for an education loan or student loan, applicants must meet certain eligibility criteria. These criteria typically include:

• Nationality: Candidate must be Indian Citizenship, Both the Borrower and Co-applicants are required to be Indian citizens.
• Bank Account Requirement for Co-borrower: The Co-borrower must possess a bank account in any Indian bank that offers cheque writing facilities.
• Age Eligibility Requirement: Applicants must meet the eligibility criterion of being a minimum of 18 years old.
• Confirmed Admission Offer: Having a confirmed admission offer from a recognized foreign institution.
• Academic Qualification: Securing a minimum academic qualification.
• Collateral or Guarantor: Providing collateral or a guarantor, depending on the loan amount.
• Repayment Capacity: Demonstrating the ability to repay the loan through academic performance and future career prospects.

Step-by-step process for education loan to study abroad

The application process for a student loan involves several steps:

• Research Lenders: Begin by researching banks and financial institutions offering student loans for studying abroad in India. Compare interest rates, repayment terms, and loan features to find the best option.
• Documents Required for Student Loan for Study Abroad: Collect all necessary documents, including:
  • Admission letters
  • Academic transcripts:
    • 10th Result
    • 12th Result
    • Proof of admission
    • Undergraduate results semester-wise (if necessary)
    • Entrance examination outcomes for international institutions (including exams like GRE, GMAT, TOEFL, etc.) and domestic institutions (such as CAT, CET, GMAT, CMAT, JEE, NEET, GRE, etc.).
  • Proof of identity (KYC Documents and Address Proof):
    • PAN card
    • Driving license
    • Aadhar card
  • Income documents
  • Collateral details
    
• Complete Application: Fill out the study loan application form accurately, providing detailed information about your course, institution, and financial status.
• Submit Application: Submit the completed application form along with the required documents to the chosen lender. Ensure all information provided is authentic and up-to-date to expedite the processing time.
• Pending Approval: Following submission of the application, the lender will evaluate it to determine your eligibility for the loan. This assessment process may require some time, therefore, patience is advised.
• Loan Disbursement: Upon approval, the loan amount will be disbursed directly to the educational institution to cover tuition fees, living expenses, and other related costs.

Top education loan providers in India for study abroad in 2024

Getting an education loan to study abroad is now easier than ever, thanks to these top education loan providers in India:

1. State Bank of India (SBI): The State Bank of India (SBI) offers student loans for studying abroad with interest rates starting at 8.00% p.a. The SBI Student Loan Scheme caters to Indian nationals pursuing various academic programs overseas, including job-oriented and technical degrees like MCA, MBA, and MS. Four types of education loans are available: Scholar Loan, Global Ed-Vantage, Student Loan, and Skill Loan.
2. Allahabad Bank: Allahabad Bank provides student loans for studying abroad up to 50 lakhs, with interest rates ranging from 7.15% to 10.5% per annum. These loans support students in pursuing diverse academic programs overseas.
3. Axis Bank: Axis Bank facilitates study loans for foreign education starting from 40 lakhs. Interest rates vary: 15.2% for loans up to 4 lakhs, 14.7% for up to 7.5 lakhs, and 13.7% for amounts exceeding 7.5 lakhs.
4. HDFC Bank: HDFC Bank offers student loans for studying abroad with a maximum limit of 30 lakhs and a fixed interest rate of 14% per annum. These loans cover various academic pursuits abroad.

Repayment terms for education loan

Repayment of the student loan typically begins after the completion of the course or a specified grace period. Lenders offer flexible repayment options, including moratorium periods, where no repayment is required until a certain period after graduation. It’s essential to understand the repayment terms and obligations before signing the loan agreement to avoid any financial strain in the future.

Securing a student loan for studying abroad in India requires careful planning, research, and documentation. By understanding the eligibility criteria, navigating the application process, and familiarizing yourself with the repayment terms, you can successfully finance your international education and embark on a transformative academic journey. If you’re considering pursuing an MBA abroad, take a look at MBA Education Loan – benefits, procedure and schemes to understand how an MBA education loan can help and what steps are involved.

FAQs

1. What are the eligibility criteria for a student loan for studying abroad in India?
   The eligibility criteria typically include having a confirmed admission offer from a recognized foreign institution, meeting minimum academic qualifications, providing collateral or a guarantor, and demonstrating repayment capacity through academic performance and future career prospects.

2. Can I study abroad on a 100% loan in India?
   While some banks may offer up to 100% coverage of education expenses through a loan, it is essential to carefully assess the terms and conditions, including interest rates and repayment options, before opting for a 100% loan.

3. What are the interest rates typically charged on student loans for abroad studies in India?
   The interest rates on student loans can vary among different banks and financial institutions. It is advisable to compare the interest rates, processing fees, and other charges before finalizing a loan provider.