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All you need to know about education loans for studying abroad
An education loan is a financial aid that students apply for to fund their studies abroad. Different banks and financial institutions offer these loans at competitive interest rates, making quality education more affordable for students.
Studying at renowned universities, especially abroad, opens doors to numerous opportunities. However, the cost of such education can be substantial. To bridge the financial gap, education loans for studying abroad become invaluable, enabling students from all backgrounds to pursue their dreams at top-tier institutions across the globe.
With various banks and lenders providing student loan for abroad, choosing the right option can be overwhelming. This is where GyanDhan comes in as a guiding light. We help students find the best education loan for their study abroad needs, tailored to their unique profiles, ensuring a seamless and hassle-free loan approval process.
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.
When considering student loans for studying abroad, you have three main categories of lenders to choose from: banks, Non-Banking Financial Companies (NBFCs), and international lenders. The lending choices within each category are as follows:
Criteria | PSB | Private Banks | NBFCs | International Lenders |
---|---|---|---|---|
Best known for | Secured loans | Unsecured and secured loans | Unsecured loans | Unsecured without co-applicant |
Popular choices | SBI, UBI, and BOB | Axis, ICICI, and IDFC | HDFC Credila, Avanse, InCred. And Auxilo | MPOWER and Prodigy |
Interest rate | Starting at 9.8% | Starting at 10.85% | Starting at 11.25% | Starting at 11.00% |
Maximum loan amount* | INR 1.5 Cr | INR 50 Lakh | INR 75 Lakh | 100,000 USD |
Margin money* | 10 - 15% | 0 - 10% | Nil | Nil |
Repayment tenure* | Up to 15 years | Up to 15 years | Up to 20 years | Up to 15 years |
Repayment options | Free or SI | PSI, SI or EMI | SI or EMI | SI |
Processing time* | 10-15 days | 5-7 days | 5-7 days | 5-7 days |
Financial co-applicant required* | No | Yes | Yes | No |
Tax benefit* | Yes | Yes | Only HDFC Credila | No |
SI - Simple Interest; PSI - Partial Simple Interest; EMI - Equated Monthly Installment
Education loan abroad eligibility is straightforward but it can vary for different lenders. The general eligibility criteria to get a student education loan for study abroad are listed below -
Education loan requ ired 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:
KYC documents
Address proof
Academic record documents (From Applicant)
For salaried co-applicant
For Self-employed co-applicant
A comprehensive comparison of some of the best lenders offering education loans is tabulated below. Detailed information on each lender’s loan amounts, interest rates, moratorium periods, and other essential factors is provided, enabling you to make informed decisions.
Basis of difference | UBI | SBI |
---|---|---|
Loan amount (unsecured) | Up to INR 40 Lakh | Up to INR 7.5 Lakh |
Interest rate | Starting at 9.8%* | Starting at 11.15%* |
Moratorium period | Course + 12 months | Course + 6 months |
Processing fees | No processing fee | 10,000 INR + GST |
Processing time | Up to 7 days | Up to 14 days |
Unsecured loan eligibility | Only for masters program | N/A |
Premiere institute list | Have a list that can lead to fluctuation in interest rate | N/A |
Loan Approval Basis GRE / GMAT? | No | No |
*Interest rate as of August 2023
Basis of difference | IDFC First Bank | ICICI Bank | Axis Bank |
---|---|---|---|
Maximum loan amount | Secured loans - INR 1 cr, Unsecured loans - INR 75 Lakh | Secured loans - INR I cr, Unsecured loans - INR 40 Lakh | Up to INR 40 - 75 Lakh |
Interest Rate | 11.50 - 12.25% | 9.85 - 15.5% | 11 - 11.5% |
Margin Money | Nil | 0 - 15% | 0 - 5% |
Processing fees | 1 - 1.25% | 0.5 - 2% | 0.75% of the loan amount + GST |
Moratorium period | Course period + 12 months | Course period + 6 months | Course period + 1 year |
Repayment during the course duration | Simple or Partial Interest | Simple Interest (SI) | Simple Interest (SI) |
Loan tenure | 12 years | 8-12 years | 15 years |
Co-applicant minimum income | INR 35,000 / per month | INR 60,000 / per month | INR 35,000 / month |
Co-applicant age | 32 years | 35 years | |
Pre-approved college lists | Colleges and universities are divided into three categories i.e. Platinum, Titanium, and Gold | Colleges and universities are divided into four categories i.e A1, A1, A3 & A4 | |
Loan approval basis GRE / GMAT? | Yes | No | Yes |
*Interest rate as of August 2023
Features | HDFC Credila | Avanse | Auxilo | InCred |
---|---|---|---|---|
Maximum loan amount | INR 20 - 75 Lakh | INR 20 - 75 Lakh | INR 20 - 75 Lakh | INR 20 - 80 Lakh |
Interest rate* | 11.25 - 13% | 12.25 - 14% | 12 - 13.25% | 11.65 - 13.5% |
Moratorium period | Course period + 1 year | Course period + 1 year | Course period + 1 year | Course period + 1 year |
Repayment during the moratorium period | Simple Interest (SI) or partial Simple Interest (PSI) | Simple Interest (SI) or partial Simple Interest (PSI) | Simple Interest (SI) or partial Simple Interest (PSI) | Simple Interest (SI) or partial Simple Interest (PSI) |
Processing fee | 0.5 - 1.5% of the loan amount + GST | 1 - 2% of the loan amount + GST | 0.5 - 1.5% of the loan amount + GST | 0.5 - 1% of the loan amount + GST |
Loan tenure | 12 - 15 years | 12 - 15 years | 12 - 15 years | 12 - 15 years |
Maximum Loan Amount | INR 20- 75 Lakh | INR 20- 75 Lakh | INR 20- 75 Lakh | INR 20- 80 Lakh |
Margin Money | Nil | Nil | Nil | Nil |
Minimum co-applicant income (negotiable for secured education loans) | INR 30,000 - 60,000 | INR 30,000 - 60,000 | INR 20,000 - 40,000 | INR 20,000 - 40,000 |
*Interest rate as of August 2023
Applying for a foreign education loan can be quite simple if done carefully. To help you answer the question, 'How do I get an education loan for abroad studies?' here are some steps that will assist you.
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