Education Loan

Types of Education Loans for Abroad Studies

Types of Education Loans for Abroad Studies

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Know the types of education loans available for foreign studies, Compare the interest rates, terms and conditions, and understand the major differences.

GyanDhan
Aman
Updated on:  23 Oct 2023  | Reviewed By: 
Ankit Mehra 
| 8.85K | 6  min read
 

A degree from a foreign university gives an unparalleled edge in career growth. It acts like a trampoline and provides you kickstart that very few Indian colleges can. It is no surprise that huge numbers of students aspire for higher education abroad. But overseas studies come at a high cost that is not possible to bear for all. Abroad education loans become a savior in such a situation and help students fund their studies abroad. However, understanding the education loan options and choosing the right option can be a herculean task. 


Students and parents need to do their homework or get in touch with an abroad education counselor to comprehend the education loan products better. The first step towards understanding it is knowing the types of education loans for abroad studies.  

In this blog, we have differentiated the types of abroad education loans on the basis of collateral and lenders. 

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Types of Education Loans on the Basis of Collateral

  • list items Secured Education Loans: A secured education loan or a loan with collateral is one where the applicant has to offer tangible or intangible security. The security pledged to the lender can be in the form of immovable property, Fixed Deposit, LIC insurance policy, etc. This form of loan takes longer for approval as the bank has to verify all the documents related to the collateral being pledged. Nonetheless, it has lower education loan interest rates, longer repayment periods, and no repayment during the study period. This education loan also has higher chances of being approved and parental income is not a determinant when it comes to loan approval.

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

  • list items Unsecured Education Loans: In unsecured education loans, the applicant does not have to pledge any collateral. This type of education loan is best for students who do not have any security to offer. However, it should be kept in mind that an unsecured education loan has a higher rate of interest (as compared to secured loans) and is harder to get approved. Unsecured education loans also have a shorter repayment period and require some repayments to be done during the study period as well. In addition to this, a minimum co-applicant income is mandatory for education loans without collateral.

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Types of Education Loans on the Basis of Lenders

Criteria Secured Education Loan from PSBs Unsecured Education Loan from Private Banks Unsecured Education Loan from NBFCs

Rate of Interest

7.75%* p.a. onwards

11%* p.a. onwards

12%* p.a. onwards

Maximum Loan

1.5 Crore

40 Lakhs

50 Lakhs

Chances of Approval

Higher

Low (Depends on country & college)

Average

Expenses covered

70% to 100%

90%-100%

100%

Interest Repayment during the moratorium period

No

Yes, Simple Interest

Yes, Simple or partial interest

Moratorium Period

6 months after completion of course

1 year after completion of course

1 year after completion of course

Co-applicant income

Not Considered

Extremely Important

Extremely Important

Repayment Period

Longer (SBI and BOB offer up to 15 years)

Longer (Axis Bank offers up to 15 years)

Shorter (up to 10 years)

Processing Time

 More (Up to 30-50 days, with GyanDhan- only  15 days)

Average (15-20 days, with GyanDhan- only 7 days)

Shorter (Within 10-12 days, with GyanDhan- 2 to 3 days)

*Interest rates as of 21st May 2021

Avoid all the hurdles of abroad education financing by simply contacting GyanDhan. Enjoy the benefit from our streamlined education loan process and get an overseas education loan from the comfort of your home. We offer students free expert help in getting education loans to study abroad. Our education loan counselors understand the students’ academic and financial profiles and then tell them about the best loan options available for them. We have partnerships with top lenders in the market, including public sector banks, private banks, NBFCs, and international lenders. With GyanDhan, you can keep all your worries about your abroad education loan application aside. To know if you are eligible for an overseas education loan, check your loan eligibility now! 

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