Education Loan

Education Loans for MBBS Abroad: A Detailed Overview

Education Loans for MBBS Abroad: A Detailed Overview

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Know all about an education loan for an MBBS course abroad. Understand the eligibility, process, interest rates, and features of loans to study MBBS overseas.

GyanDhan
vishakha Bhagia
Updated on:  12 Mar 2024  | Reviewed By: 
Aman 
| 9.19K | 6  min read

It’s a no-brainer that studying MBBS abroad is not a cheap affair at all. Once the student obtains a medical seat in any popular medical college in the world, the next big requirement that he has to encounter is the high tuition fees. It is when education loans for MBBS abroad come into the picture. Abroad education loans become a default choice for Indian students who want to go overseas for higher education. As the number of foreign colleges and universities offering MBBS courses are very few, it is important for students to be aware of the options of education loans for MBBS overseas, to ensure that the hard-earned opportunity is not missed. 


It is important to note that it is almost impossible to unsecured loans for MBBS abroad as private lenders usually refrain from giving an MBBS loan considering its duration and a few other factors. Does this mean that students can’t get a study loan for MBBS abroad? No. Students can get an overseas MBBS loan on the basis of collateral.  

In this blog, we have shed some light on the details of education loans for studying MBBS abroad.

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Why don’t lenders offer unsecured education loans for MBBS courses abroad?

Most of the students who go for foreign MBBS courses choose countries like China, Ukraine, the Philippines, etc., which are not on the list of preferred countries by the private lenders in India. Also, the risk evaluation and the approximate duration to recover the loan make lenders resist launching any product for MBBS education loan without collateral. It leaves students to apply for secured education loans from public-sector banks.   

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What are the options of secured loans for MBBS abroad?

Secured education loans are given on the basis of collateral. Government banks in India are the best bets for MBBS courses considering the lower interest rates, chances of approval, tax benefits, etc. Some of the major public-sector banks in India offering loans with collateral are SBI, Bank of Baroda, and Punjab National Bank. As these entities are government-backed, their trust factor also outweighs others.

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What are the types of collateral one can pledge for secured education loans for MBBS abroad?

There are mainly two types of collateral securities: tangible security and intangible security.

  • list items Tangible Collateral Security: These are the collaterals that include immovable properties such as land, house, apartment, shop, etc. 
  • list items Intangible Collateral Security: These are the collateral securities that include liquid assets such as fixed deposits, life insurance, and government bonds.

To know more about Types of Collateral Security Acceptable for an Education Loan, click here.

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What is the interest rate of secured loans for MBBS abroad?

Public-sector banks, as stated above, offer education loans on lower interest rates in comparison to private lenders. Study abroad loan interest rate in India is determined by banks on the basis of the Marginal Cost of Funds-Based Lending Rate (MCLR). It is the benchmark based on which most Indian lenders calculate the foreign education loan interest rates. This MCLR is evaluated by taking into account several factors such as the marginal cost of funds, the tenure premium, the operating cost, etc.

Though the MCLR is the basis of all the abroad education loans for MBBS fixed by the Indian lenders, most public-sector banks’ interest rates are calculated as MCLR + Spread (a premium amount levied by lenders). Typically, the interest rate of government bank education loans ranges between 8% and 10%. For an instance, SBI education loan for MBBS abroad starts around 8.8% p.a. The maximum loan amount that can be sanctioned by government banks could go up to INR 1.5 Crores. 

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What are the eligibility criteria for secured loans for MBBS abroad?

Some of the common eligibility criteria for secured loans in India for abroad education are:

  • list items Students must have all the papers related to collateral security. 
  • list items The applicant must be an Indian national. 
  • list items The applicant should have got admission to a recognized institute abroad. 
  • list items The applicant must have had a good academic record. 
  • list items A good CIBIL score is a criterion of most banks when sanctioning an abroad education loan.

 

Note: For applicants looking for a loan to fund their MBBS courses in countries like Ukraine and China, there are special rules and regulations. For instance, The State Bank of India might require students to take a country deviation to fund their MBBS courses in such countries.

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What are the chances of approval of an abroad study loan for MBBS courses?

Banks in India always go through the student’s profiles and make a decision according to them. For example, the chances of success for applicants who have applied to MBBS programs in the USA are much higher. The same success rate cannot be seen for MBBS courses in countries such as Ukraine, the Philippines, or China. This is because most of the universities located in these countries are not on the list of many government banks. 

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How to apply for an abroad MBBS loan via GyanDhan?

Even though getting a secured education loan is way easier than getting an unsecured education loan, the process is still cumbersome and filled with numerous blockades. Banks may reject the loan because of a lack of some documents. Students can avoid all such pitfalls by contacting GyanDhan. Steps to apply for an abroad MBBS loan via GyanDhan are:

  • list items Get in touch with GyanDhan.
  • list items Our counselor executes a simple 3-step loan application process helping in easier and faster loan sanctioning
  • list items The counselor will assess the student’s profile and will recommend the best lender after closely evaluating the eligibility. 
  • list items Students can then finalize the lender after our recommendation for the best options as per our expertise. 
  • list items Once the lender is decided upon, GyanDhan then sends over a customized document checklist needed for the loan application.
  • list items The counselor will also help the student with submitting the documents. We collect the document from students’ doorstep or students will have to upload them online. In both cases, students will not need to step out of their homes. 
  • list items After the document submission, we coordinate with the bank and help expedite the process. 
  • list items We keep student updated and try to resolve any bottleneck if comes in the loan process. 

 

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In a nutshell, getting an education loan for MBBS abroad may look like a cumbersome task. However, with proper research and taking help of education loan experts like GyanDhan, students can make the whole procedure simple. To apply for an abroad education loan, contact GyanDhan now!

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