How Much Loan Can I Get For Education Abroad?
Education Loan

How Much Loan Can I Get For Education Abroad?

How Much Loan Can I Get For Education Abroad?

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Discover your options for studying abroad with our guide on secured and unsecured education loans, maximum loan amounts, and application steps

GyanDhan
Rohit Gidwani
Updated on:  08 May 2024  | Reviewed By: 
Aman 
| 273 | 7  min read

Unlocking the money for your overseas education trip poses an important question: "How much student loan can I get for study abroad?" This blog provides guidance on handling college loans, including the factors that influence loan amounts and distinguishing between secured and unsecured loans. It provides a complete overview of different lenders' maximum loan capabilities and clarifies GyanDhan's application process. Designed to provide students with knowledge, this book is the first step toward financially safeguarding your ambition of studying abroad, providing you have the required insights to support your future.

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Types of Education Loans

Before we get into how much loan can I get for studying abroad, it's necessary to understand the different forms of school loans. When considering an education abroad, students frequently consider education loans as their primary source of income. Understanding the differences between secured and unsecured school loans is critical for making an informed decision that suits one's financial situation.

Secured Education Loans

Borrowers who take out secured education loans must pledge an asset as collateral, such as real estate, fixed deposits, or other valuables. The inclusion of collateral reduces the risk for lenders, resulting in lower interest rates and better loan terms for borrowers. The loan amount is frequently increased, sometimes paying up to 100% of the educational expenses, depending on the collateral value. However, borrowers face the danger of losing the collateral asset if they fail to repay the loan.

Unsecured Education Loans

Unsecured education loans involve no collateral from the borrower. These loans are approved based on the borrower's credit score, financial history, and earning prospects. Because these loans pose a larger risk to lenders, they frequently carry higher interest rates and stricter repayment terms. Unsecured loans have the advantage of being accessible to students who do not have large assets to use as collateral but have a solid academic background and potential for future earnings.

Check Your Education Loan Eligibility

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Maximum Loan Amount from Different Lenders

When looking into education loans for studying abroad, one important element to consider is the maximum loan amount offered by different lenders. This important aspect can have a huge impact on your financial strategy, ensuring that you have enough finances to cover all of your abroad education expenses, such as tuition and living expenses. A comparison of the maximum loan amounts offered by different lenders will provide students and their families with the necessary knowledge to efficiently navigate their financial planning for an international education.

Lender Name Maximum Loan Amount Secured Maximum Loan Amount Unscured

SBI

Up to 1.5 Cr INR

Up to 7.5 Lakh INR 

UBI

Up to 1.5 Cr INR

Up to 40 Lakh INR

Axis Bank

Up to 1 Cr INR

Up to 75 Lakh INR

ICICI Bank

Up to 2 Cr INR

Up to 1 Cr INR

IDFC FIRST Bank

Up to 1 Cr INR

Up to 75 Lakh INR

HDFC Credila

Up to 1 Cr INR

Up to 75 Lakh INR

Auxilo

Up to 75 Lakh INR

Up to 75 Lakh INR

Incred

N/A

Up to 80 Lakh INR

Avanse

Up to 1 Cr INR

Up to 50 Lakh INR

MPOWER Financing

N/A

Up to 85 Lakh INR

Prodigy Finance

N/A

Up to 100% cost to study

 

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Factors Influencing Maximum Loan Amount

Here are the factors that answers your question - how much loan can I get for studying abroad?

  • list items Type of loan: secured or unsecured The differential between secured and unsecured loans is a major element influencing loan amounts. Secured loans require the borrower to provide an asset as collateral, which considerably reduces the lender's risk. This security allows lenders to make larger loans at possibly lower interest rates. Unsecured loans, which do not require collateral, are deemed greater risk, resulting in smaller maximum loan amounts and higher interest rates to reduce the lender's risk.
  • list items Collateral value: the value of the collateral given determines the loan amount in secured loans. Banks often lend a portion of the collateral's value, usually between 80 and 90%, however it can go up to 100% in extreme cases. The main message here is that the higher the value of the collateral, the larger the potential loan amount, allowing borrowers to access more funds for their education.
  • list items Co-applicant income: For unsecured loans, the co-applicant's financial stability and income are critical factors. A co-applicant with a solid financial past and high income lowers the perceived risk of default, potentially increasing the maximum loan amount that the lender is ready to grant. This assessment helps to ensure that there are adequate finances for loan repayment, especially in the absence of collateral.
  • list items Applicant profile: The applicant's academic record and achievements play a vital role in the loan application process. Lenders look for indicators of an applicant's potential success, such as academic performance, awards, and other recognition. A solid academic profile reassures lenders about the applicant's future career prospects and earning potential, which can increase the loan amount.
  • list items Targeted country: The applicant's intended study destination has a substantial impact on the loan amount. Countries with high employment rates and strong economies, such as the United States, are seen more positively by lenders. These countries provide greater career prospects after graduation, lowering the risk of loan default and allowing for higher loan amounts.
  • list items Targeted course: The chosen field of study is also an important decision. STEM courses are particularly popular since they are in high demand and have the potential for rich employment opportunities following graduation. As a result, students taking these courses are typically eligible for larger loan amounts. Non-STEM courses, on the other hand, may offer lesser loan amounts due to lower expected earnings.
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Application Process via GyanDhan

GyanDhan simplifies the process of applying for an education loan to study abroad. Their service is intended to assist students in finding the best loan option based on their specific requirements. 

  • list items Check eligibility: Begin by utilizing GyanDhan's loan eligibility tool to get an estimate of the loan amount you may be eligible for. This first assessment is based on your academic profile, the country you want to study in, and your financial situation.
  • list items Loan discussion: A GyanDhan education loan consultant will contact you to discuss your financial situation and study objectives. They will assess your position and advise you on the best lender possibilities, concentrating on those that best meet your individual needs while studying abroad. This individualized counsel guarantees that you are paired with a lender who meets your financial and educational objectives.
  • list items Document submission and verification: After discussing your financing requirements, you must submit the required documentation for your application. This usually comprises academic transcripts, financial accounts, proof of admittance, and any additional documentation requested by the lender. The lender will then evaluate these documents to determine the reliability of your application and confirm that all information provided is comprehensive and correct.
  • list items Approval and disbursement: After successfully verifying your documentation, the lender will issue a loan sanction letter outlining the details of the loan, including the amount, interest rate, and repayment plan. To accept these terms, you must sign this letter. Following your acceptance, the money will be disbursed in accordance with the lender's standards, which may include releasing the entire amount in one lump sum or in installments to correspond with the payment schedule of your educational institution.

So there you have it - arranging an education loan for your foreign study isn't as difficult as it appears. Everything from loan types to borrowing limits is determined by a few important elements. Curious about "How much student loan can I get for study abroad?" GyanDhan has got your back. Check your loan eligibility with them now and get one step closer to attending your dream institution overseas.

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Frequently Asked Questions

Can I apply for an education loan before getting my admission letter?

Yes, you can begin the educational loan application procedure before receiving your admission letter. Many lenders provide conditional pre-approval depending on your academic background and the course you want to follow. However, final loan approval and distribution will be contingent on the educational institution providing a confirmed admission letter.

Are there specific countries for which banks are more likely to approve education loans?

Yes, banks and financial institutions frequently have a list of preferred nations where they are more inclined to lend, usually based on job opportunities and the reputation of educational institutions in those countries. These recommended lists frequently include countries such as the United States, United Kingdom, Canada, Australia, and Germany.

Can the interest rate on an education loan change during the repayment period?

Yes, the interest rate on loans with variable interest rates can alter in response to market lending rate movements. Fixed-rate loans, on the other hand, have the same interest rate for the whole length of the loan. Before finishing the loan, you must first grasp which type you are considering.

Is it possible to extend the repayment period of an education loan?

Yes, in some instances, lenders may grant an extension of the payback time. This usually necessitates a written request and justification, such as financial difficulty. Keep in mind that extending the repayment period is likely to result in a higher overall interest expense over the loan's life.

Are there any tax benefits associated with repaying an education loan?

Yes, under Section 80E of India's Income Tax Act, the interest paid on a higher education loan is tax deductible. This deduction can be claimed for up to eight years, beginning with the year you begin repaying the loan. This benefit applies to loans obtained for higher education for the taxpayer, their spouse, children, or a student for whom the taxpayer is a legal guardian.

Check Your Education Loan Eligibility


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