Education Loan

Education Loans For Study Abroad

  • If you are planning to study abroad, then you may be concerned about bearing the cost of your tuition fees and other expenses. In such a scenario, an education loan can be a life saver
  • If you are finding it difficult to arrange for funds, you can avail of the appropriate education loans to fulfill your aspirations of studying abroad
  • There are various private and public banks in India, which provide education loans for different purposes and have different eligibility criteria and rules for application
  • In the article below, we look at the different education loans and their application process in detail

Types of Education Loans for Studying Abroad

Unsecured education loan

  • This type of loan is one where you will not be required to provide any asset as security or collateral.
  • By its very nature, it seems to be ideal for students, who typically do not own any high value assets to provide as security
  • However, even though it is easier to secure these types of loans, you should be willing to shell out a higher rate of interest
  • The repayment duration is also typically lower than other types of loans and you will be expected to start your EMI payments during your course itself
  • You will be required to show proof of your parent’s l income to be eligible to apply for this type of loan
Loan segment Private Banks Public Banks Non-Banking Financial Companies
Maximum loan amount  40 Lakhs INR Up to  7.5 Lakhs INR  25 Lakhs INR
Interest Rate 11.25-13% pa N.A. 12-14%
Processing Charges
  1. No charge for loan amount exceeding. 20 lakhs INR.
  2. Rs.750 for each lakh over 20 lakhs INR
N.A. 1% to 2%
Colleges that are supported 200+ No unsecured loans offered for higher education fees. 500+

Secured Student Loan

  • This type of study loan for studying abroad can be availed if you are in a position to provide an asset as collateral against the loan amount
  • The security can be either in the form of moveable or immovable property and can include shares, insurance policy documents, Real estate, bonds, fixed deposits and other eligible categories
  • You can expect banks to take a longer time to process these types of loans
  • One advantage of these education loans is that you will not need to make any payments for the duration of your course
  • The rate of interest is also lesser than unsecured loans and the repayment window Here are your options for secured education loan-
Loan segment Private Banks Public Banks Non-Banking Financial Companies
Maximum Amount Up to 60 Lakhs INR Up to. 1.5 crores INR Up to. 50 Lakhs INR
Interest Rate 11-13% pa 8.85-10.25% pa 12-14% pa
Processing Charges
  1. No charge for  loan exceeding 20 lakhs INR
  2. Rs.750  per lakh for loan amount exceeding 20 lakhs loan
10,000 INR 1% to 2%
Payment to be made while studying Simple Interest None Simple Interest

Unsecured non-Consignor Loan

  • This type of study loan is provided by private international funds and is very selective about the students profile and only provide loans for the top universities
  • The rate of interest for this loan, is higher than other kinds of loans
  • This type of loan will be suitable for you if you do not have any assets or income of your own and your parents are retired

Eligibility Criteria to Apply for the Education Loan

The first and foremost thing is to check whether you are eligible to apply for an education loan or not. Below provided is the usual criteria which Indian banks follow for checking the eligibility of the loan applicant is:

  • You should be a citizen of India.
  • You must be over 18 years of age or should take the loan through your parents
  • You are required to have a strong academic profile
  • You should have been accepted into a recognized foreign higher education institute such as university or college

Documents Required for Applying for Education Loan

You will need the following documents to apply for an education loan

  • A complete and error free application form
  • Passport size photographs of both the applicant as well as any co-applicant.
  • Photo ID proof provided by the government
  • Proof of residence
  • Proof of acceptance to educational institute abroad
  • Proof of age such as birth certificate
  • PAN Card or form 60
  • Documents for signature verification
  • Academic transcripts
  • If working, then details of ITR and form 16
  • 2 years ITR with the statement of income, Income certificate from Tehsil/collector's office
  • Any technical certifications

Process for Applying for an Education Loan for Study Abroad

You will need to follow the below steps to apply for a student loan in a fast and efficient manner

  • Research the different types of education loans available and select the one that suits you the most
  • Visit various banks/financial institutions to understand the terms and conditions of your education loan and select the one that is most appropriate
  • Contact the concerned bank for a meeting with education loan coordinator to understand the process and for guidance on loan application

the process and for guidance on loan application Global Tree has collaborations with many banks providing education loans for students to study abroad and can link you with the most suitable education loan once you have secured admission to the university of your choice.

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