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A-Z Guide to Student Loans for Studying Abroad
✓ Eligibility Criteria Guide for Education Loan
✓ Document Checklist for Education Loan
Table of content
- A Guide to student loans eligibility to apply for an educational loan
- Documents required for student loans while applying for an education loan
- Top education loan providers in India for studying abroad
- Points to keep in mind while applying for an education loan in India for Study abroad
- Conclusion
- FAQ's
- Need Help? Ask Here!
Nowadays, with the increasing responsibilities and mounting expenses, funding education has become a crucial task for all parents as they find it difficult to self-finance their children’s education and support their dream of studying abroad. With the plethora of options available in the market to fund your education due to the huge demand to cover education loans for students who want to pursue higher education overseas, it is very important to understand the basic fundamentals of student loans for studying abroad.
As half knowledge on the subject is dangerous, you should do prior research on the market before making a decision and then choose the best option to fund your education for studying. This article will cover A-Z's guide to student loans and will give you the nitty-gritty of student loans for studying abroad.
A Guide to student loans eligibility to apply for an educational loan
With malleable terms and conditions, most Indian banks offer loans to meritorious students at a low-interest rate who are unable to fund their education and help students to finance their study abroad.
Some of the education loan eligibility criteria to apply for an educational loan are as follows:
- The applicant applying for an education loan must be a resident of India.
- The applicant must have a letter of admission from a recognized university in India or abroad.
- The age of the applicant must be between 18-35 years while applying for a loan.
- The applicant must have a good/decent academic record to date.
- The applicant must have secured admission from a deemed university or accredited educational institution.
Documents required for student loans while applying for an education loan
|
Documents Name |
Lists of Documents |
|
Mandatory Documents |
Application form duly filled and signed in by the applicant 2 passport-size photographs Statement of course expenses Offer letter or confirmation of admission letter Aadhar and PAN card of the applicant Xth/XIIth/any other higher education |
|
Academic document |
Educational mark sheet and certificate (Xth/XIIth/Degree/PG) Proof of admission to the course Fee structure IELTS/GMAT/GRE Scorecard University ranking print out form |
|
Proof of identity |
Voter ID PAN ID Passport Driving License Aadhar Card |
|
Proof of residence |
Voter ID Card Passport Electricity Bill Telephone Bill Ration Card Bank account statement Aadhar |
|
Employment or business proof of co-applicant or guarantor |
3 months salary slips (if salaried)6 months' Bank statement (if salaried) Form 16 of the last 2 years Employer ID card 3 years ITR (if self-employed) 6 month Bank statement (if self-employed) Business proof (if self-employed) |
|
Other documents |
A letter stating that leftover expenses, apart from the loan amount will be borne by the co-applicant Cheque or receipt stating the payment of the processing fee Other cheques for Lawyer and evaluator fees (if your legal and valuation process is done by the bank itself) Property collateral owner’s affidavit (on Rs 20 or 100 stamp paper) |
|
Additional documents (if applicable) |
Proforma invoice for travel or Laptop etc if asking for it Receipts of advance payments made if any All loan account statements (1 year if any pending loans) Gap certificate if the student has a break or failure in the study Letter explaining the reason for no ITR of co-applicant if applicable |
|
Legal documentation (in case of collateral) |
Property Title deed Registered sale agreement/ Gift Deed/ Will Original registration receipt for the above agreement Allotment letter by Municipal Corporation/ Authorized Govt. Authority like MHADA, CIDCO, HUDA, DDA, JDA, GIDC, etc (only if applicable) 30 years link document or previous chain of sale deed establishing title or EC is required Latest property tax bill and latest electricity bill bearing the same address |
|
Other important documents (in case of collateral) |
If the joint property is divided into two, a clear segregation report is required If a huge land was registered and later cut into plots, then motherland registration is required If the property value or loan sought is more than 1 cr, two legal and two valuation reports are required |
|
Legal documents required for Gift or Will properties |
Gift deed and Will should have been registered The property should be registered on New owner’s name Two legal reports are required in such cases For will properties, the Death certificate of the person who wrote the will is required |
Note: As per the bank-laid norms, documents may differ from bank to bank as per the requirements of the applicant and the co-applicant. You can get in touch with our financial experts at WeMakeScholars who will assist you with all the required details for an educational loan.
Top education loan providers in India for studying abroad
There are various alternatives available in the market where multiple education loan providers are willing to lend loans to students for study abroad.
1. State Bank of India
|
SBI Education Loan |
Values |
|
Interest Rate |
9.50% for females |
|
Min Loan Amount |
20 Lakhs |
|
Maximum Loan Amount |
1.5 Cr |
|
Tenure of Repayment |
Upto 15 years |
|
Processing Fee |
10K + 1800 GST |
2. Bank of Baroda
|
BOB Education Loan |
Values |
|
Interest Rate |
Prime Universities Non-Prime Universities |
3. Bank of India
|
BOI Education Loan |
Values |
|
Interest Rate |
Upto Rs 7.5 Lacs- 11.25 % |
|
Tenure of Repayment |
Upto 15 Years |
|
Processing Fee |
No processing charge for study in India |
4. Bank of Maharashtra
|
BOM Education Loan |
Values |
|
Interest Rate |
Upto Rs 7.5 Lacs-10.02 % |
|
Maximum Loan Amount |
Upto 10 Lacs- In India |
|
Tenure of Repayment |
Maximum 7 years after the commencement of Repayment |
5. Canara Bank
|
Canara Bank Education Loan |
Values |
|
Interest Rate |
Upto Rs 7.5 Lacs - 10.70% |
|
Maximum Loan Amount |
Upto 10 Lacs- In India |
|
Tenure of Repayment |
Maximum 15 years after the commencement of Repayment |
6. Central Bank of India
|
CBI Education Loan |
Values |
|
Interest Rate |
9.00% for males |
|
Maximum Loan Amount |
Upto 10 Lacs- In India |
|
Tenure of Repayment |
Maximum 15 years after the commencement of Repayment |
7. Indian Overseas Bank
|
Overseas Bank Education Loan |
Values |
|
Interest Rate |
Upto Rs 7.5 Lacs - 10.65% |
|
Maximum Loan Amount |
Upto 30 Lacs- In India |
|
Tenure of Repayment |
Maximum 7 years after the commencement of Repayment |
8. Punjab National Bank of India
|
PNB Education Loan |
Values |
|
Interest Rate |
From 4 lakhs to 7.5 lakhs- Above 7.5 lakhs- |
|
Maximum Loan Amount |
Upto 10 Lacs- In India |
|
Tenure of Repayment |
Maximum 15 years after the commencement of Repayment |
9. Union Bank of India
|
Union Bank Education Loan |
Values |
|
Interest Rate |
Upto Rs 4 Lacs - 11.85% |
|
Maximum Loan Amount |
Upto 20 Lacs- In India |
|
Tenure of Repayment |
Maximum 15 years after the commencement of Repayment |
10. UCO Bank
|
UCO Bank Education Loan |
Values |
|
Interest Rate |
Upto Rs 7.5 Lacs- 9.10 % |
|
Maximum Loan Amount |
Upto 10 Lacs- In India |
|
Tenure of Repayment |
Maximum 15 years after the commencement of Repayment |
11. ICICI Bank
|
ICICI Bank Education Loan |
Values |
|
Interest Rate |
Secured - 10.50% |
|
Maximum Loan Amount |
Upto 50 Lacs- Domestic Courses |
|
Tenure of Repayment |
Upto 8/10 years for UG Course |
12. Axis Bank
|
Axis Bank Education Loan |
Values |
|
Interest Rate |
Upto 4 Lacs- 15.20% |
|
Maximum Loan Amount |
Upto 75 Lacs |
|
Tenure of Repayment |
Maximum 7 years after the commencement of Repayment |
13. HDFC Bank
|
HDFC Education Loan |
Values |
|
Interest Rate |
Upto 20 Lacs- 9.25%- 13.42% |
|
Maximum Loan Amount |
Upto 20 Lacs- In India |
|
Tenure of Repayment |
Maximum 7 years after the commencement of Repayment |
Note: All Government Banks offer 0.50% concession in the interest of girls.
Points to keep in mind while applying for an education loan in India for Study abroad
1. Check your eligibility before applying for a loan- Before applying for an education loan in India for studying abroad, check your education loan eligibility criteria in advance and then proceed ahead.
2. Calculate the loan amount- Determine the loan amount you need to finance your education like college fees, examination, laboratory, travel expenses, cost of books, laptop, library fees, and other equipment.
In a few cases, students forget to calculate their moratorium period while calculating EMI payments which will eventually affect the monthly payments they have to pay to their lenders. To avoid doing this, use an EMI loan calculator to calculate your monthly EMI accurately.
3. Apply for an education loan to avoid hassle at the last moment- After confirmation of admission to the college, most colleges do not accede adequate time for fee payment. The applicant has to process sufficient funds at the last minute. To avoid hassle at the last minute, one should apply for an education loan in advance. Our team at WeMakeScholars will help you in the entire loan process and get your loan sanctioned in 15-20 days.
4. Compare other loan lenders before taking an education loan- Different banks offer different interest rates with satisfactory repayment policies. Well-versed research of the market will enable you to explore various options and help you select the top lender to fund your education abroad.
5. Prepare all the required documents- Check all the documents you will need to avail of an education loan. To avoid last-minute hassle arrange all the documents like collateral-related documents, legal documents, academic-related documents, etc.
6. Plan your EMIs and repayment tenure- Education loan repayment in India for study abroad starts after the moratorium period (repayment holiday). So, keeping future perspectives in mind, plan your repayment tenure and EMIs accordingly.
Conclusion
This guide to student loans will help you navigate through all the required details. It is advised that students do their own market research before applying for an education loan and strictly meet the eligibility criteria as banks do not lend loans in case of a lack of documents. At WeMakeScholars our team understands the requirements of the banks and also values students’ time and efforts, because of this we help students with abroad education loans with 14+ banks. We will help you get the best education loan lender according to your profile.
Education Loan FAQs
-
What is the maximum amount I can borrow for a student loan to study abroad ?
The maximum amount you can borrow for a student loan to study abroad varies between banks and financial institutions. Generally, it ranges from Rs. 7.5 Lakhs to Rs. 1.5 Crores, depending on your creditworthiness, the course you are pursuing, and the country you are going to study in.
-
Can I transfer my student loan for studying abroad to another lender?
Yes, you can transfer your student loan for studying abroad in India to another lender if the new lender offers a lower interest rate or better repayment terms. However, you should consider the prepayment charges and processing fees before making the switch. But it is always advisable to take the advice of WeMakeScholars experts to know about the process and other terms and conditions.
-
Are there any tax benefits for repaying a student loan for studying abroad?
Yes, there are tax benefits for repaying a student loan for studying abroad in India under Section 80E of the Income Tax Act. You can claim a deduction for the interest paid on the loan during the repayment period.
-
Can I get a student loan for studying abroad for a short-term course or program?
Yes, some banks and financial institutions offer student loans for studying abroad in India for short-term courses or programs. However, the loan amount may be lower, and the interest rate may be higher than for long-term courses. To know about the eligibility criteria for your course and have any doubts related to the education loan, you can request a callback and talk to our Financial officers to resolve all your doubts.
-
Can I get a student loan for studying abroad without providing proof of admission?
No, you cannot get a student loan for studying abroad in India without providing proof of admission to a foreign university. The lender needs to verify the course details and the university's reputation before approving the loan. But you can start your application process once you decide to study abroad without an admission letter.
NEWS
The Ministry of Finance has provided clarification on tax collected at source (TCS) for foreign remittances related to education expenses. Under the Liberalized Remittance Scheme (LRS), parents can send up to Rs 7 lakh per year for education-related expenses without being subject to TCS.
Remittances exceeding Rs 7 lakh, financed by an Education loan, will incur a TCS of 0.05%, while remittances above Rs 7 lakh without a loan will attract a TCS of 5%. Ancillary expenses for studying abroad, such as commuting tickets, tuition fees, and day-to-day expenses, will also be treated as education-related expenses and attract a lower TCS rate. To remit money under LRS, parents need to submit a declaration specifying the purpose of remittance and provide student and university details. When remitting from a loan, additional documents are required.
It is crucial to accurately track LRS codes and mention the correct code during the remittance process. The existing rates of TCS for sending money through LRS for education purposes will be in effect until September 30, 2023.
However, other related expenses may have different considerations. Remitters must maintain accurate records of total remittances under LRS, and false information may lead to appropriate action. The ministry advises banks to obtain an additional declaration to confirm remittance limits. By adhering to these guidelines, parents can ensure compliance and support their child's education abroad
Last updated on - 10/07/2023
In recent years, the demand for education loans in India has experienced a sharp upswing, primarily due to a growing number of Indian students pursuing overseas education opportunities. This trend can be attributed to the rising cost of living and increased aspirations for higher education, especially among students from Tier 2 and 3 cities.
Historically, the education loan sector had faced challenges due to high NPAs. However, recent data from the RBI indicates a revival in this sector. Outstanding bank loans to the education sector in FY23 reached Rs 96,847 crore, reflecting a robust 17.1% YoY growth. By July 2023, outstanding education loans had surged to over Rs 1.03 lakh crore, marking nearly a 20% increase compared to the previous year.
Factors contributing to this growth include a rise in demand for both domestic and overseas offline courses post-COVID-19. According to government data, the number of students availing education loans for overseas education has increased by 215% over the past decade, with a threefold increase in borrowers during this period.
Despite concerns about rising NPAs in education loans, bankers remain optimistic, as the sector's share in overall personal loans remains low at around 2%. However, experts like Rathin Roy have expressed apprehensions about the increasing trend of education loans, highlighting that even affluent families are resorting to borrowing to finance their children's education, which raises concerns about the financial burden on students and their families.
Last Updated- 25/09/2023
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