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|
|Avanse||Graduate and post graduate courses at reputed institutions||Tuition fees, travel, living expenses, books /equipment fees and other related expenses||Customised according to the borrower’s requirements||Nil||Variable||1%||Variable||Variable|
|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||Rs. 30 lakhs with collateral||15%||2% on the current base rate||_||1 year||15 years|
|Axis Bank||—||Hostel fees, tuition fees, book costs, etc.||Rs. 20 lakhs||16.50% to 17.50%, special rates for women applicants||—||—||—|
|Punjab National Bank||Graduate, post-graduate courses. Diplomas, job-oriented professional and technical courses, CIMA/CPA courses, etc.||University fees, travel, exam fees, lab fees, library fees, book/equipment fees and other related expenses||As per requirement||15%||Base rate as interest if studying in any of 200 top universities of the world.||1%||1 year||15 years|
|HDFC Bank||over 950 courses across 36 countries||University fees, travel, exam fees, lab fees, library fees, book/equipment fees and other related expenses||1.5% of loan amount||15 years|
|Canara Bank||Professional and technical courses, graduate and post-graduate courses||University fees, travel, exam fees, lab fees, library fees, book/equipment fees and other related expenses||20 Lakhs||15%||—||—||—||15 years|
Our trusted partner, Avanse Financial Services:
The Avanse Study Loan can be availed for pursuing education at over 1600 foreign universities across the world. For the convenience of borrowers, Avanse offers pre-visa disbursement loans, fast-track loans, pre-admission loans and certificate of availability of funds. Indian citizens can avail the Avanse education loan with a co-borrower for pursuing graduate and post graduate courses at reputed institutions. The minimum loan amount sanctioned for foreign education is Rs. 1, 00,000 with the maximum limit customised according to the borrower’s requirements. No margin is required and the loan tenure can be taken between 12 months to up to 120 months. The holiday period given is 6 months after completion of the course or three months after securing employment. As per the loan amount, the security requirement will be determined by Avanse.
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