In recent times, the number of Indian students who want to study abroad at various foreign universities is increasing. Though studying abroad may have its lucrative benefits but funding the education to study abroad may be challenging for you.
The best way to finance your higher education in a foreign country is to get education loan for abroad studies. Many banks in India offer loans and students schemes to help students with their education. Depending on the institution and the course of study, the banks provide the loans to the students.
Most of the education loan for abroad have flexible repayment mode. Some education loans also provide a holiday period where the borrower starts paying back after six months of completion of the course or after finding a job.
Following are somethings you must know:
Education loans cover tuition fees, boarding and lodging fees, travel cost to another country, exam fees, lab fees, library fees, deposit, books, stationery, project fee, study tours fee, etc.
The student should be between 18 and 35 years to get a foreign education loan.
The students can take education loans for the courses including management, engineering, medical, graduation, post-graduation, arts, architecture, science, hotel management, etc.
During the holiday period, the borrower is needed to pay the interest.
The borrower can repay the education loan for abroad to the bank in monthly instalments through ECS or post-dated cheques.
The banks provide education loans for a seven-year term. This period includes a moratorium
A co-applicant is necessary for taking the education loans that are full-time courses. Co-applicants can be the applicant’s parents, brothers, sisters, siblings, spouse, or other family members.
Usually, the banks provide a loan of maximum INR 20 lakh with the moratorium period and INR 10 lakh without a moratorium period.
Up to a loan amount of INR 4 lakh, you do not need to pay any security to the bank. If the loan amount exceeds INR 4 lakh but is lower than INR 7.5 lakh, then the bank will require a third-party guarantee. Tangible collateral security is needed for the loans amounting to INR 7.5 lakh and higher. Here, collateral means a movable or immovable thing that the applicant can offer to the bank as a security against the loan. A guarantee can be bonds, FD, shares, house, commercial property, collateral land, bank deposits, mutual fund units, gold, debentures, life insurance policy, and government securities.
It is also essential to know that the banks do not provide the total loan amount that is needed to fund the education. Most of the public sector banks provide around 90 per cent of the total foreign education loan amount. The remaining 10 per cent amount must be arranged by the applicant himself.
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