Education Loan For Studying Abroad
Our 3-Step Process Enables Hassle-free and Quick Approval of Education Loans
Once you complete our 2-minute education loan application, we automatically match your profile against our partner lenders’ criteria and determine the best education loan option.
We contact you to finalize the lender and give a customized document list. We then follow-up with the lender for a faster loan process, tackle the roadblocks, and negotiate on interest rate in the case of private lenders.
Once your loan is approved, we help to coordinate the disbursal to the university as per the fee schedule. We also enable pre-visa disbursal if needed.
An investment in knowledge pays the best interest! And if the knowledge is attained at a top-tier and premium university then it is sure to elevate your career to the next level. However, the unfortunate reality is that the cost of studying in a reputed college is usually quite steep. And studying in a good college overseas is an even more expensive proposition.
Overseas education loans help students, irrespective of their financial status, realize their dream of studying in one of the best universities in the world.
Numerous banks and other financial institutions now provide education loans for students who want to study abroad. These lenders have different education loan schemes on offer, but choosing the one that is right for you is not an easy task. And that is where GyanDhan helps. We match you with that lender, which best suits your profile and needs, and then help secure the loan approval in the most seamless and hassle-free manner.
What is the Maximum Loan Limit For Education Loans to Study Abroad?
In secured education loans, students can apply for student loans of up to INR 1.5 cr. In unsecured loans, students can apply for study loans of up to INR 45 Lakhs. This loan limit can increase or decrease depending on the applicant’s and co-applicant’s profile, country, course, etc.
How to Apply for Abroad Education Loans?
The steps to apply for a loan for financing the studies abroad are:
- Step-1: Check your loan eligibility online.
- Step-2: Get expert loan counseling to compare the education loan options available.
- Step-3: Select a lender and apply for an education loan online.
- Step-4: Get the customized education loan document checklist.
- Step-5: Submit the required education loan documents either online or get documents picked up from your home by our representative.
- Step-6: Get the property & other legal evaluations done (in secured loans).
- Step-7: Get the loan sanction letter after the education loan approval from the lender.
What are the Documents Required For Secured Education Loans?
Education loan required documents vary from lender to lender and also depend on the type of education loan applied for. Here’re the general documents required by almost every lender:
- PAN Card
- Driving License
- Aadhar Card
- Aadhar Card
- Valid water/electricity/ LPG Bill
- Voter’s ID card
- Current House Lease Agreement
- Valid Passport
Academic Record Documents (From Applicant)
- 10th Result
- 12th Result
- Proof of Admission
- Under Graduate Result Semester Wise (If required)
- Entrance Exam Result - Abroad institutes (GRE, GMAT, TOEFL, etc.)
- Entrance Exam Result- Domestic institutes (CAT, CET, GMAT, CMAT, JEE, NEET, GRE, etc.)
For Salaried Co-applicant
- Salary slips of the last 3 months
- Copy of Form 16 for last 2-3 years or copy of IT Returns for last 2-3 financial years, acknowledged by Income Tax Dept.
- Bank account statement for the last 6 months (salary account).
For Self-employed Co-applicant
- Business address proof (If Applicable)
- TDS Certificate (Form 16A, if applicable)
- Last 3 years ITR
- Certificate of qualification (for C.A./ Doctor and other professionals)
- Bank Account statement for the last 6 months
Collateral Related Documents (If applicable)
- Title deed & Sales Deed
- Registration receipt
- Allotment letter
- Chain deed of 30 years
- Tax copy or electricity bill
- Government-approved building plan
- OC and Completion Certificate (if the property is constructed)
How to Choose the Best Overseas Education Loan?
Taking an education loan to supplant the cost of education overseas is the right choice. Depending on the amount and your profile, financial institutions can finance even 100% of the cost of the course. However, to the best overseas education loan option, one needs to carefully analyze the following key aspects of the various options available. When you apply to GyanDhan, we do this analysis for you. In case you do the loan comparison yourself, consider these factors:
- Interest Rate: Even a 1% increase in the education loan interest rate has a substantial financial effect. Example - Loan Amount: Rs. 30,00,000, Loan Repayment in: 5 years after you graduate, Course Duration: 2 years; While at 10%, you’ll pay Rs. 9.7 lakhs in interest, at 11%, you’ll pay Rs. 10.9 lakhs - that’s a difference of 1.2 lakhs for just 1%!.
- Repayment Holiday/Moratorium Period: It is a specified period during the loan tenure in which the borrower is exempt from making repayments. Loans with a moratorium period have a big plus, as you don’t have to worry about making repayments while you study overseas.
- Tax Rebate: Education loans taken from Indian banks are special in that the entire amount paid as interest is exempt from income tax. This has a huge impact: Example - Loan Amount: Rs. 30,00,000, Marginal tax bracket: 30%, Repayment in: 5 years after graduation, Course Duration: 2 Years, Interest Rate: 10%... If your loan has tax rebate, you can save Rs. 2.9 lakhs!
- Margin Money: The amount that you need to pay from your own pocket while the rest is paid by the bank. If a bank offers a 0% margin, it means they’ll fund all your education expenses. Learn more in this blog.
- Hidden Fees: There are numerous hidden fees that your lender might be charging you and when accumulated these will cost you a considerable amount, such as:
- Forex Margin: Some lenders charge a forex conversion charge when the overseas education loan is sanctioned in INR and disbursed in some other currency. This can be as high as 1.5%, which translates to Rs. 45,000 for a loan of Rs. 30 lakhs.
- Processing Fees: This varies from zero to as high as 2%. For a loan of Rs. 30,00,000, it can be as high as Rs. 60,000
- Cost of Credit Life Insurance: Some lenders make it mandatory for the applicant to go in for credit life insurance so that their loan amount is protected against any unfortunate eventualities. If the premium amount is on the higher side then it eventually increases the cost of the education loan as well.
- Mandatory Cross-Sell: Some lenders try to cross-sell other policies before sanctioning the education loan, even though it is not required on the applicant’s end.
- Interest Rate in Different Currencies: Often students face a dilemma of choosing over an education loan in USD with a lower interest rate or an equivalent amount in INR with a higher interest rate. By the previous trend of the rising prices of US$ to INR conversion rates, it is a smart choice to go for the loan in INR even though it may come with a higher interest rate.
As you can see, by selecting the right overseas education loan, the reduction in cost can be as high as 5-6%.
Which is the Cheapest Education Loan in India to Study Abroad?
Public sector banks offer the lowest interest rates compared to private banks & NBFCs. If your institution is listed in BOB’s premium list of colleges, Bank of Baroda is the cheapest education loan option in India. Otherwise, the State Bank of India offers the cheapest education loans. However, the extent of the cheap education loan in India depends on several factors including the applicant’s profile, co-applicant’s financial profile, target country, target course, etc.
Which is Better: Loan With Collateral or Without Collateral
Education loans are of two types, one that is taken with collateral i.e. a secured loan and one taken without collateral i.e. an unsecured loan. You need to understand the difference between the two before choosing the one that is right for you.
Secured Education Loan
- Requires the borrower to offer any collateral like immovable property, FD, Insurance Policy etc. against which the loan is offered.
- Lower rate of interest.
- The chances of approval is high.
- Longer repayment period.
- No repayment during study period.
- Parental income is not required for the approval.
Unsecured Education Loan
- The borrower does not need to offer any collateral to get this loan.
- Higher interest rate, usually 1.5% - 4% higher than the secured loan.
- Is a more risky proposition for the bank, hence is not so easy to obtain an unsecured loan from the bank.
- Comparatively shorter repayment period.
- Some repayment during study period.
- Parental income is required for the approval.
What Else Does GyanDhan Offer?
Our help is not limited to education loans. We also provide all the necessary information and help that you need so that you can successfully apply to your chosen university abroad.This includes..
Thus, GyanDhan provides a complete study abroad solution for you. Besides offering transparent, reliable, and up-to-date information related to everything in the higher education domain, we also supplement help in all areas that can make your relocation abroad easier, smoother, and cost-effective.
There are two ways,
- Students can check the eligibility on GyanDhan’s loan eligibility tool and get an instant loan recommendation. Post which, a GyanDhan executive will get in touch with the student to help in the documentation and further process, OR
- The students can request a call back on GyanDhan’s website and an education loan counsellor (ELC) gets in touch with the student to understand the requirements within a few hours. Our ELCs will ask a few detailed questions to further assess the profile and match the profile with the best lender. Often, students are not aware of the deals available for them, in which case we help them choose the loan with maximum benefits.
- Secured Education Loans - These are the education loans in which the applicant has to pledge any asset to the lender as a security in order to get the loan approved.
The collateral can be of two types:
- Tangible assets such as flats, shops, land (non-agricultural), etc.
- Intangible assets such as fixed deposits, insurance policy, government bonds, etc.
- Unsecured Education Loans - These are the education loans in which the applicant does not need to pledge any security to the lender to get the study loan for financing the study abroad. However, a co-applicant has to be incorporated and his/her income becomes a crucial determinant of the loan approval. Also, only the private lenders in India and a few international players offer education loans to Indian students without collateral, for an amount more than INR 7.5 Lakhs.