Education Loan for Bachelors to Study Abroad: Eligibility, Loan Amount, Providers

To qualify for an education loan for bachelors in India, applicants must meet specific eligibility criteria set by the lending institutions. These criteria typically include:

• Citizenship: The applicant must be a citizen of India.

• Academic Background: The student should have a strong academic record, typically including a minimum percentage in 12th standard as specified by the university.

• Age Requirement: The student must be 18 years of age or older at the time of applying.

• Language Proficiency: Students may need to provide proof of English proficiency through exams like TOEFL, IELTS, or equivalent.

• Admission Status: The student must have secured admission to a recognized international college or university.

• Visa Application: A valid student visa application form, such as F1 or J1, is required based on the country of study.

• Credit Score: The student's CIBIL score must not be too low. 

• Criminal Record: The student must have no prior criminal record.

• Public Banks: Students can secure an education loan for bachelors in India of up to INR 1.5 crore. For those pursuing studies abroad, public banks offer education loans for an undergraduate degree without collateral for up to INR 45 lakhs. The education loan for bachelors SBI covers up to 70% of the collateral value domestically, while Bank of Baroda provides up to 100% of the collateral value. 

• Private Banks: Private banks, such as Axis Bank, offer instant loans for bachelors students, covering 65-70% of the collateral. However, these loans typically come with higher interest rates compared to public banks. Private banks may also offer loans exceeding INR 45 lakhs for international studies, with terms varying based on the applicant's profile and the specific course of study.

• Public Banks: Interest rates for an education loan for bachelors in India through public banks usually range between 8% and 10%. Public banks, including education loans for bachelors SBI, often provide a 0.5% discount for female students to encourage female education. These rates are typically floating and can vary based on RBI policies.

• Private Banks: For an education loan for an undergraduate degree, private banks charge slightly higher interest rates, typically between 9% and 12%. However, they offer the advantage of fixed interest rates, ensuring stability in monthly EMIs throughout the loan tenure. Instant loans for bachelors students from private banks can also provide quick access to funds.

• NBFCs: NBFCs charge the highest interest rates, generally between 11% and 14%. Despite the higher rates, they offer quicker processing times and more flexibility in terms of collateral and repayment options, making them a viable option for instant loans for bachelors students.

Manually calculating EMIs for an education loan for bachelors in India can be complex and time-consuming. To simplify, use the following formula to calculate your EMI:

EMI = [P x R x (1 + R) ^ n] / [(1 + R) ^ n - 1]

Where:

• P = Principal loan amount

• R = Applicable rate of interest

• N = Number of monthly installments

This formula helps you estimate your monthly payments and manage your education loan for an undergraduate degree more effectively.

Applying for a student loan involves several steps and can take time. Here’s a structured approach to applying for an education loan for bachelors in India:

• Verify Course Approval: Check with your bank to ensure that the course you want to pursue is approved for the loan.

• Determine Loan Requirements: Assess how much of the loan you need and how much you can fund on your own. This is crucial for deciding on the right loan amount.

• Compare Loan Options:  Compare various education loans for bachelors from different banks to find the best fit. Consider options for an instant loan for bachelor's students if you need quick processing.

• Complete the Application: Once you've chosen a bank and finalized the loan amount, fill out the loan application form and submit it to your bank.

• Loan Approval and Disbursement: After approval, the bank will disburse the loan amount to you, helping you manage your education financing effectively.

When applying for an education loan for bachelors in India having the correct documentation is crucial for a smooth approval process. Here’s a brief overview of the essential documents required for an education loan for an undergraduate degree.

Documents for Students 

1. Proof of Identification: Aadhar card, voter’s ID, valid passport, or PAN card.

2. Proof of Residence: Driving license, Aadhar card, or utility bill (telephone/electricity).

3. Proof of Age: Birth certificate.

4. Academic Records: Mark sheets from class 10th, 12th, undergraduate degree, and postgraduate degree (if applicable), and relevant certificates (e.g., CA, ICWA, CPA).

5. Valid Passport Copy

6. Proof of Admission: Acceptance letter from the institution.

7. Statement of Cost of Attendance

8. Standardized Test Scores: GRE, GMAT, SAT, ACT, LSAT, TOEFL, IELTS, etc.

9. Recent Passport-sized Photographs: Two copies.

Documents for Co-Applicants

1. Proof of Identification: KYC documents, Aadhar card, voter’s ID, valid passport, or PAN card.

2. Proof of Residence: Driving license, Aadhar card, or utility bill (telephone/electricity).

3. Recent Passport-sized Photographs: Two copies.

4. Proof of Income: Salary slips for the last 6 months.

5. Bank Documents: Account statement for the last 6 months, copy of bank passbook.

Education loans offer significant tax benefits under Section 80E of the Income Tax Act. This section allows for a tax deduction on the interest paid on education loan for bachelors in India. The deduction is available for loans taken for your own education, your spouse, children, or a student for whom you are a legal guardian. You can claim a deduction for the entire interest amount paid on the loan with no upper limit, for a maximum of 8 years or until the interest is fully paid. Note that the principal repayment is not eligible for deduction under Section 80E. Understanding these tax benefits can aid in effective financial planning and provide additional relief while managing your education expenses.

Understanding the repayment terms for education loans for bachelors in India is just as crucial as obtaining the loan itself. For an education loan for an undergraduate degree in India, repayment generally starts 6 months to 1 year after course completion or once the borrower secures employment, whichever occurs first.

Public Banks: Typically offer a moratorium period that includes the course duration plus an additional 6-12 months. Repayment tenures for an education loan for bachelors SBI can extend up to 15 years

Private Banks: Usually offer more flexible repayment options for an instant loan for bachelors students, featuring shorter tenures and higher EMIs. However, some may provide tenures extending up to 10-15 years, depending on the loan amount.

Loan Providers (banks, private companies, NBFCs)

When seeking an education loan for bachelors in India, it’s important to consider various loan providers. Both public and private banks, as well as NBFCs, offer competitive options. Additionally, private banks like HDFC Bank provide options for an instant loan for bachelors students. These loans are designed to meet the specific needs of students aiming for an education loan for an undergraduate degree.

Public Banks: Leading public banks like State Bank of India (SBI), Punjab National Bank, and Bank of Baroda offer attractive terms for education loans. The education loan for bachelors SBI includes two notable schemes under the “Vidyalaxmi” program: the SBI Student Loan Scheme and the SBI Global Ed-Vantage Scheme. The education loan for bachelors in India through SBI’s Global Ed-Vantage is particularly advantageous for students attending top universities worldwide.

Private Banks: Private banks like HDFC Bank, ICICI Bank, and Axis Bank offer education loans for bachelors in India with a focus on quicker processing and additional services such as insurance and forex cards. HDFC Bank’s “Education Loan for Abroad Studies” is notable for covering a wide range of courses and institutions.

NBFCs: NBFCs like Credila, Avanse, and InCred are known for providing high loan amounts with fast processing times and flexible repayment options. They are particularly popular for students needing larger amounts for studying abroad, making them a good option for an instant loan for bachelors students.

Q1. What are the options for an education loan to study abroad for bachelor students without collateral?

Answer: For bachelor students seeking to study abroad, there are several options for an education loan to study abroad without collateral. You can explore loans from private sector banks like Axis Bank, ICICI Bank, and IDFC FIRST Bank, as well as from NBFCs such as HDFC Credilla, Avanse, Auxilo, and Incred. The education loan for bachelors in India can provide funding up to INR 45 lakhs without requiring collateral.

Q2. Can I get an education loan to study abroad without collateral?

Answer: Yes, it is possible to obtain an education loan to study abroad without collateral. By providing the necessary documentation and meeting the eligibility requirements, you can secure an education loan for bachelors in India from various financial institutions, including private sector banks and NBFCs.