Student Loans
Pursuing higher studies abroad has gained popularity over the years with young students aspiring to learn in a globally diverse environment provided by internationally reputed institutions. With the rising demand for skilled professionals in every field, studying abroad brings in excellent career growth opportunities. The variety of disciplines and interdisciplinary programs offered by Universities allow students to excel in their chosen fields. While the high living and tuition costs are a cause for concern, universities, on their part, encourage students to enroll with them by providing scholarships and student aid. But this brings down the cost marginally. A majority of students fund their studies through savings, but the high costs often dry out the resources that have been set aside by parents. In such a scenario, students find themselves cutting down their list of universities to those that have comparatively lower tuition fees.
But now, you need not curb your desire to pursue your dream program in the university of your choice. There is good news in the form of education loans provided by several leading banks and financial institutions to students pursuing their education abroad. Depending on the institution selected and the course of study, banks offer various schemes. Most of the education loan schemes give you a flexible repayment options and allow you to plan your finances accordingly. Education loans carry a moratorium or holiday period, which is very beneficial as the borrower is given a period of around six months after the completion of the course to search for a suitable job. The loan repayment commences after this period or as soon as the borrower has found a job. Not only do these loans cover the cost of boarding, lodging, and tuition fees, but also cover travel and other related costs that would be incurred by the student.
Listed below are some of the features of an education loan:
- Individual aged between 18 to 35 years can secure an education loan to study at an approved university abroad.
- Students can avail education loans for engineering and medicine courses, management courses, as well as graduate and post graduate program in pure science, arts, architecture, hotel management etc.
- The expenses covered under an education loan include tuition fees, exam fees, lab and library fees, caution deposit, travel, books and equipment, projects and study tours.
- Borrowers have to bring in a margin of 5%-15% for loans taken for foreign studies.
- During the moratorium period, borrowers must pay the interest, with the principal payment starting when the loan tenure begins.
- Education loans can be repaid in monthly instalments through ECS or via post-dated cheques to the bank.
- Generally, banks sanction education loans with tenure up to seven years, inclusive of the moratorium period.
- A co-applicant has to be selected for education loans taken for full time courses. Co-applicants can include siblings, spouse, parents or other family members.
- Banks will sanction a maximum of Rs. 20 lakhs with the moratorium period and up to a maximum of Rs. 10 lakhs for loans without a moratorium period.
- No security has to be submitted for education loans taken up to Rs. 4 lakhs. Third party guarantee has to be furnished for loans between Rs. 4 lakhs and Rs. 7.5 lakhs and tangible collateral security is required for loans above Rs. 7.5 lakhs.
- The Central Government has also introduced an interest rate subsidy scheme for repayments done during the moratorium period for the benefit of the weaker sections of the society.
Top education loans providers in India:
Below are some of the top education loan providers in India aiding students in pursuing their education abroad:
| Bank | Courses | Covers | Amount (Maximum) | Loan Margin | Rate of Interest | Processing Fee | Moratorium | Tenure |
| HDFC Credila | All courses including STEM, Non STEM and MBA are covered | Tuition fees, travel, living expenses, books /equipment fees and other personal expenses. Also provides 80E Tax benefits | Customised according to the borrower’s requirements. Maximum unsecured : 45 Lakhs for USA (STEM) | Nil | unsecured: 11.95% onwards, secured: 11.25% onwards | 1% | 3 years | 14-15 years |
| SBI | MBA, MCA, MS etc. and diploma courses. (CIMA), London and the Certified Public Accountant (CPA), USA | Tuition fees, Examination, Laboratory and Library fees, caution deposit, cost of books and equipment, travel costs and other necessary expenses | Secured : upto 1.5 Crore | 10 % (Compulsory) | 10.20% with deduction of 0.50% for girl child and 0.50% availing Rinn Rakshak Policy | ₹10,000 + GST + Legal Valuation & Franking charges (Non Refundable) | 2.6 years | 15 years |
| Avanse | All courses including STEM, Non STEM and MBA are covered | Tuition fees, travel, living expenses, books /equipment fees and other personal expenses | Customised according to the borrower’s requirements. Maximum unsecured : 50 Lakhs for USA (STEM) | Nil | unsecured: 11.95% onwards, secured: 11.5% onwards | 1% | 3 years | 14-15 years |
| Auxilo | All courses including STEM, Non STEM and MBA are covered | Tuition fees, travel, living expenses, books /equipment fees and other personal expenses | Customised according to the borrower’s requirements. Maximum unsecured : 45 Lakhs for USA (STEM) | Nil | unsecured: 11.95% onwards, secured: 11.5% onwards | 1% | 3 years | 14-15 years |
| InCred | All courses including STEM, Non STEM and MBA are covered | Tuition fees, travel, living expenses, books /equipment fees and other personal expenses | Customised according to the borrower’s requirements. Maximum unsecured : 45 Lakhs for USA (STEM) | Nil | unsecured: 11.95% onwards, secured: 11.5% onwards | 1% | 3 years | 14-15 years |
| BOB | MBA, MCA, MS etc. and diploma courses. (CIMA), London and the Certified Public Accountant (CPA), USA | Tuition fees, Examination, Laboratory and Library fees, caution deposit, cost of books and equipment, travel costs and other necessary expenses | Secured : upto 1.5 Crore |
10% | 10.20 % 0.50 % Concession (Girl Student) 0.75 % Discount for (Preferential List Universities & Courses) |
₹10,000 + GST + Legal Valuation & Franking charges (Processing Fee Refunded after 1st Disbursement) | 2.6 years | 15 years |
In an endeavour to continuously provide value-added services that will help reduce the overall cost of your education abroad, we are pleased to introduce Collegepond Services, an initiative focused on helping you source funding at the most economical rate through leading lenders like HDFC Credila, Auxilo Finserve, Prodigy Finance, InCred Finance, MPower Financing, Bank of Baroda, SBI & Avanse.
At Collegepond, we want to demystify this opaqueness and create an environment wherein lenders chase students for loans. We intend to follow a 4-step process:
Collegepond Education Loan Process:
1. We’ll appoint a Collegepond Loan Counsellor to study your profile and understand your education loan requirement in detail.
2. Your Loan Counsellor will then relay the same to all lenders on a no-name basis and see which lender provides the most competitive package. This will create a sense of competition among the lenders.
3. Communicate the same with the parent and student and arrange a meeting with the most competitive lender to process the paperwork.
4. You can continue to stay in touch with your Collegepond Loan Counsellor to follow up on your loan sanction and disbursement process.
As a first step, fill the below questionnaire to determine your interest in obtaining loans. Once we receive the completed questionnaires, we will begin inviting you to the office so that we can understand your needs.
NOTE: Students availing the loan through Collegepond will also get free VISA and Financial counselling.
For any queries, get in touch with us at services@collegepond.com
