Education Loan for Engineering (B Tech) Students to Study in India & Abroad

    Updated on: 11 Aug 2022

     


    Going by the popular trends in India, B.Tech (Engineering) is a promising choice for a flourishing career. With a variety of specializations offered, students choose this program for the ample job opportunities and higher salary packages upon graduating. The field in itself is quite diverse and holds a high reputation in India as well as abroad. 

    However, the investment required for this course is equally substantial. An education loan in such a scenario becomes important. 

    Let’s read in detail about the financing options for the course - 

    Check Your Education Loan Eligibility Apply Here

    Should you take an education loan? 

    Education loan is a readily available financing option with several benefits. Most loan products cover 100% of the expenses to study at Indian as well as abroad institutions. With ever-increasing tuition fees, an education loan helps you cover the expenses without the worry of paying large sums of money out of pocket in one go. Some other benefits of an education loan are - 

    • Personal / contingency funds can be invested in better schemes earning interest. 
    • Tax benefits on education loans help save money, whether you are studying abroad or in India.
    • Students can get loan products that are specifically designed to cater to their needs. 
    • The repayment for an education loan starts after the moratorium period ends, a period where the borrower does not have to make any payment towards the loan.
    • Students who repay their education loans on time, build a solid credit history, which has several benefits. 

     

    You can read about these benefits in detail here 

    What are the top universities for engineering and the cost of studying from abroad? 

    International students are charged a higher tuition fee, which becomes affordable with an education loan. Some of the top-ranked abroad universities for engineering according to their QS ranking are mentioned below - 

     

    The cost of engineering from abroad will cost students anywhere between INR 25 lakhs to INR 40 lakhs. An education loan, in this case, becomes the easiest method to fund abroad B.Tech for Indian students.

    What are the top universities and the cost of studying engineering at Indian institutes? 

    Engineering from Indian institutes is also a costly affair. Students can expect to shell out up to INR 30 lakhs for a top-ranked college. Some of the top colleges and institutes in India are all IIT in different cities, NIT, and Vellore Institute of Technology. Most students won’t be able to pay the fees for their B.Tech without the help of an education loan. 

    What are the parameters to check while selecting a loan product? 

    Choosing the right education loan product is a bit tricky. Students need to compare the entire features and cost of the loan to find the optimum product. Some of the factors that should be considered are - 

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    What are the different types of education loans available for B.Tech students? 

    There are broadly two types of education loans, be it for study in India or abroad - 

    1. Secured education loan - These types of loans require the borrower to pledge collateral of equal or more value than the loan amount required. For example, to borrow INR 30 lakhs, the borrower has to pledge collateral worth at least INR 40 lakhs. Types of collateral that can be pledged are - 
      • Immovable property - house, flat, apartment, a plot with a boundary 
      • Liquid assets - LIC Policy, Fixed Deposit 
      • Third-party collateral - students who do not own collateral can pledge collateral belonging to a relative or a friend. 
    2. Unsecured education loans - These types of loans do not require any collateral to be pledged. A co-applicant, however, needs to co-sign the loan along with the borrower. There are multiple factors that are taken into account while evaluating the loan application, such as - 
      • Student’s academic record and profile
      • Co-applicant income, profile
      • CIBIL score (borrower and co-borrower)
      • Ranking of the target college and course 
      • Future earning potential of the student 

    What are the different types of lenders you should explore?

    The education loan segment has several different types of lenders in the market, offering varying loan products - 

     

    Students who are unable to pledge collateral or a co-applicant on an education loan for abroad can opt for international lenders. 

    Check Your Education Loan Eligibility Apply Here

    What are the expenses covered in an education loan?

    Whether to study in India or abroad, most loan products cover 100% of the expenses incurred. However, there may be a few exceptions. Let’s look at the commonly covered expenses - 
    India 

    • 100% financing - full payable tuition fees to the institute and hostel 
    • Examination fees
    • Purchase of books, equipment, instruments 
    • Travel expenses/expenses on an exchange program 

    Abroad

    • Fees payable to the institute and hostel (public banks have a 10% margin money on abroad education loans. Read about margin money.) 
    • Examination/Library/Laboratory fees
    • Purchase of books/equipment/uniforms
    • Caution deposit/building fund/refundable deposit
    • Traveling expenses/passage money for abroad universities

    What are the financing options for engineering students to study abroad? 

    Let’s look at the various education loan schemes available to fund engineering abroad - 

    Public Banks 

    • SBI Global Ed-Vantage Scheme - SBI offers education loans to students to pursue graduate, postgraduate, professional courses from recognized universities abroad. Students have to pledge collateral and can borrow up to INR 1.5 crore in funds. The value of the collateral is the most important factor in this loan scheme and should be more than the loan amount required. The maximum loan tenure is 15 years. Though students can prepay the loan without any penalty charges. Check out the rate of interest, processing fees, and other details here- SBI Education Loan
    • Bank of Baroda - Scholar for Study Abroad - BOB’s scheme is specially designed for students who want to pursue higher studies abroad. The lender has categorized institutes into Listed Universities and Unlisted Universities. The loan amount limit is set at INR 80 lakhs for Listed Universities and Unlisted Universities, the limit is INR 60 lakhs. Students need to pledge collateral at least equal to the loan amount required. Read about the loan product details here- Bank of Baroda Education Loan

    Private Banks 

    • Axis Bank - One of the largest private banks in India, Axis Bank offers education loans to students to pursue education abroad. The maximum loan amount a student can borrow is INR  40 lakhs without collateral. If a student can pledge collateral, they can borrow a higher loan amount. Since students are not required to pledge collateral, a co-applicant is required to co-sign the loan. One of the most interesting features of the loan product is that for loans up to INR 20 lakhs, the entire processing fee is refundable. For loans above INR 20 lakhs, students only have to pay 0.75% of the (loan amount -INR 20 lakhs), which is only Rs. 750 per lakh above INR 20 lakhs. Read the product details here- Axis Bank Education Loan 
    • ICICI Bank - Another private bank that offers instant education loans to students to pursue education abroad. The loan amount that can be borrowed is INR 40 lakhs without collateral. The loan amount limit will be increased if the students pledge collateral. The rate of interest offered starts at 11.5%. Read about the loan details here- ICICI Bank Education Loan

    Non-Banking Finance Companies (NBFCs)

    Refer to the following for loan details - 

     

     Features\Lender 

    Loan Amount

    Interest Rate Range

    Processing Fee

     Loan Tenure 

    Axis

    Up to INR 40 lakhs

    11.25% - 13%

    Loan amount up to INR 20 lakhs - Nil
      Above INR 20 lakhs - 0.75% per lakh + GST  

    20 Years

    InCred

    Up to INR 40 lakhs

    Up to INR 10 lakh - 12.75% - 16%
      Above INR 10 lakhs - 11.75% - 16%  

    1% - 1.25% +GST

    10 Years

    Avanse

     Up to INR 40 lakhs 

    Starts at 12.65%

    1% - 2% of the loan amount

    10 Years

    Auxilo

    Up to INR 40 lakhs

    12.70% - 18%

    1% to 2% of the loan amount

    10 Years

    HDFC Credila

     Up to INR 40 lakhs 

    Starts at 11%

    1% - 1.5% of the loan amount

    10 Years

    International lenders - 

    If a student is unable to pledge collateral or co-applicant, they can apply for an education loan from international lenders such as Prodigy Finance and MPower Financing. These lenders give out education loans to international students solely based on the student’s profile and their future earning potential. Let’s look at the lender and loan details - 

    • Prodigy Finance - The lender offers full tuition fee and living expense coverage. The loan amount is disbursed directly to the university in the currency that is required (USD or EUR). The rate of interest is between APR- 6.7% to 11% with the admin fee ranging from 2.4% to 4%. Read about the loan details here - Prodigy Finance Education Loans: All You Need To Know 
    • MPower Financing - The lender offers education loans to students pursuing education in the US and Canada. The loan amount that a student can borrow ranges from $2001 to $50,000. The rate of interest for undergraduate studies is APR - 13.99 percent. Know more about the loan product here - MPower Financing Education Loan: A Complete Guide
    Check Your Education Loan Eligibility Apply Here

    What are the education loan options available for B.Tech students to study in India? 

    Lenders have different loan products designed specifically for studies in India. However, most of the loan applications sanctioned by the lenders are for top-ranked colleges in India. There are various public and private lenders offering loans for B.Tech and professional courses. 

    For other middle-tier institutes, students may not be able to find loan approval through traditional lenders and will have to approach marketplaces, such as GyanDhan.  

    How to get an education loan for B.Tech? 

    Getting an education loan for B.Tech becomes easy with GyanDhan

    1. Check your loan eligibility on our website. 
    2. A dedicated Education Loan Counselor will get in touch with you to discuss various loan products and options according to the needs and requirements. 
    3. Apply for the loan on the portal online. 
    4. Students will receive a customized document checklist and can upload the required documents on the portal. They can also get the documents picked up from their doorstep. 
    5. The lender will verify and evaluate the documents and the application. 
    6. Collateral evaluation and legal formalities are completed. 
    7. On successful completion, the borrower will receive loan approval and a sanction letter. 

    Read Also:

    How can GyanDhan help students get an education loan for engineering? 

    GyanDhan has tied up with several lenders in the market and can help students get an education loan with ease. The loan process is streamlined so you can get a hassle-free education loan. Your assigned counselor will be available to you throughout the loan process to keep you updated on the loan status. Further, if any problem arises in the loan process, it will be quickly resolved by them. We offer our services free of cost to the students. So, don’t wait, check your loan eligibility and apply for a hassle-free loan. 

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