Education Loans for Study Abroad
You’ve got the talent. You’ve got the skills. But what is stopping you from pursuing your dream career in a foreign university? Finance. Money. But standing on the 21st century, it is no longer a problem for a talented and ambitious person to pursue his or her dream career in a foreign land. Education Loan is the answer to all your problems regarding money matters.
Most large commercial banks in India offer education loans to deserving students for studying abroad. Over the years banks have also increased their education loan portfolio. Several trusts also offer loans to excessively meritorious students for studying abroad. Banks which offer education loans fro studying abroad are State Bank of India, Andhra Bank, HDFC, Canara Bank and Syndicate Bank to name a few. For more details on educational loans click here.
Eligibility for Education Loans from banks in India for Studying Abroad
- You should be a resident of India
- You should secure admission in any of the bank approved universities and courses
- You should be able to provide some security to the bank. Security can be in the form of :
- Government Securities/ public sector bonds
- Units of UTI, NSC, KVP, LIC policy, gold, shares/debentures,
- Bank deposit in the name of the student, parent/guardian or any other third party with suitable margin.
Applying for an Education Loan
The bank will require the following documents for loan application. So, please ensure that you have the documents ready before you start applying to the bank for education loans for studying abroad:
- Completed Education Loan Application Form
- Proof of admission scholarship, studentship
- 2 passport size photographs
- Mark sheets of last qualifying examination
- Schedule of expenses for the specified course
- Income tax assessment order, of last 2 years
- Borrower's Bank account statement for the last six months
- Brief statement of assets and liabilities, of the Co-borrower
- Proof of Income (i.e. Salary slips/ Form 16 etc)
The amount of loan varies from bank to bank and is dependent upon a number of factors. An educational loan for studying generally covers the following expenses:
- Tuition fees payable to college/school
- Examination /library /hostel charges
- Travel expenses
- Purchase of books /equipment /uniform
Repayment of loan is usually done in the form of EMIs or Equated Monthly Installments. Which starts from one year after the program is over or six months after the graduate gets a job. Repayment tenure can range from 3-8 years. Interest charged for education loans is tied to the Prime Lending Rate (PLR) which is the rate at which a bank offers loan to prime borrowers. For loans up to 4 lakhs banks usually do not ask for any collateral. However, for those taking more than 4 lakhs, the interest rate will be usually one per cent more than PLR.
How to go about getting an education loan:
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- Check whether the course or the institute is recognized by the bank where you are applying for education loan
- Find out how much loan you would require. Make a rough estimate of your expenditure under different heads like tuition fees, travel, books and accommodation.
- Search for different loan options from different banks
- Compare different option and see which bank is offering the most competitive education loan for your study abroad program