Types of Education Loan Suitable for Various Countries in the World

Students often take an education loan to fund their studies. Education loans are an excellent source for a lot of abroad aspirants to fund their higher education. But before borrowing an abroad education loan, students must pay extreme attention to the country they have opted for and have a thorough understanding of the immigration policies of the country in which they plan on studying. Every country has its ordinances to follow when it comes to international students. Therefore, this article aims to give a deep insight into these mandates and also impart information regarding the type of education loan that would be suitable for various countries in the world.

Let's first try and understand the requirements laid by different countries and the types of education loans recommended for that country. Let’s take a sneak peek at the different types of student loans that are available in India for abroad studies.

In India, education loans act as a pillar of support to many students as it is the most prominent source of higher funding. These loans are further divided into two different types of student loans: 

• Secured education loans: Secured loans are collateral-based loans. Students who are taking collateral-based loans are required to pledge collateral to avail of an education loan. Here, the borrower pledges a collateral with the lender to avail the loan. In India, these loans are majorly provided by Government/Public banks like SBI, BOB, Canara, PNB etc.
  Collaterals are further divided into three parts.
  • Immovable property: This includes houses, flat, non-agricultural lands and lands with defined boundaries.
  • Liquid security: This includes fixed deposits, LIC, Government bonds etc.
  • Third-party collateral: This provision is only applicable to Government/Public banks. In this case, if a candidate does not possess any required assets mentioned above or is unable to meet the value to cover the required loan amount, then they can pledge a third party’s asset as collateral. This third party essentially refers to individuals who are not part of the candidate’s immediate family. E.g., uncle, aunt, friends of the candidate or the primary co-applicant, etc.
• Unsecured education loans: Unsecured education loans basically do not involve any collateral requirement which means students are not required to pledge any collateral in order to avail of an education loan. Students are granted loans on the basis of a student’s academic profile and their co-applicant's financial profile. Financial institutions providing unsecured loans are very particular about various criteria as they are lending loans keeping in mind the student’s earning potential in the future. In India, unsecured education loans are provided by private banks and NBFCs. 

As you have acquired sufficient knowledge of different types of student loans, let’s move on to the requirements for education loans for various countries. But before that, let me remind you, if you approach banks directly, they might not accept third-party collateral as a valid security to pledge. This may also lead to a delay in the application process or rejection of the loan application. Therefore, to avoid such a situation, we always recommend students first connect with our financial team at WeMakeScholars as they will be able to help you out. Our financial team is knowledgeable as we have handled huge volumes and have solutions to almost any problem that a student may incur during their education loan process. So, request a callback to speak with the financial officer at  WeMakeScholars today. 

Students who are willing to study in Australia have to first submit proof of funds to their respective institutions before getting a confirmation letter. After receiving admission, students need to deposit at least one semester’s tuition fees to the university account along with the health insurance charges and also one year’s living expenses into a savings account. 

Now for funds to study in Australia, an unsecured education loan is not an option for students as Australian embassies do not generally accept loans from NBFCs. This is because the embassy needs assurance that students who wish to study in Australia have sufficient funds and those are backed by security in case of no repayment.

On the other hand, the Australian embassy majorly favours students who borrow secured education loans from Government banks like the SBI and other PSUs. This is because as compared to NBFCs, government banks have proven themselves to be financially reliable and trustworthy, time and again. But here again, a point to remember, the Australian embassy does not accept third-party collateral as it portrays that the student has no financial source of funding for them to study in Australia. Therefore remember, even if the students are processing through Government banks, the Australian embassy pays close attention to the nature of the collateral being pledged. 

• Type of Education Loan Recommended to Study in Australia: Secured education loan
• The maximum education loan amount provided: is 1.5 Cr 

Similar to Australia, students who are willing to study in New Zealand are required to deposit their one year’s living expenses into a savings account. This process is called an FTS (Funds Transfer Scheme). Students are required to deposit their living expenses for at least a year of their course duration with a bank based in New Zealand and pay their annual tuition fees before their visa process.

Even though the students do not have to pay over the odds to live in Germany, authorities still want to ensure that a student has sufficient financial resources to live and study in Germany. 

Now, let’s talk about the type of education loan suitable for study in Germany.

Generally, students can avail of both unsecured and secured education loans for study in Germany but students have to strictly meet the eligibility criteria to be eligible for the same. To know whether you are eligible or not, connect with your financial officer to know the same. Usually, the amount needed for Germany is not that high so a lot of students prefer going for a loan without any security which is a good and viable option if you have no collateral at all. 

• Type of loan recommended for study in Germany: Unsecured education loan
• The maximum education loan amount provided: 20 Lacs(without security)

Students willing to study in Canada must meet the requirements laid down by Canadian legislation. The Canada student visa requirements state that higher education aspirants from India need to deposit their one year’s living expenses into a GIC account and submit documents that indicate the purchase of the same as proof of funds to the embassy while applying for a Canada student visa.

For study in Canada, banks generally offer both i.e. unsecured education loans and secured education loans. 

Secured education loans are basically offered on the collateral being pledged. Government banks generally consider the value of the collateral being pledged and if the value meets the loan requirements stated by the university or not. Therefore, students can get an education loan to study in Canada through Government banks easily.

Private banks generally offer education loans based on the university the student has opted for and on the financial profile of the co-applicant. Therefore, to avail of an education loan from private banks, students must ensure that the university falls in the Prime list category and that the co-applicant’s financial profile is strong enough. To know more, seek professional guidance from our team at WeMakeScholars. 

NBFCs, generally offer 25-30 lakh loans for study in Canada with an interest rate of 12% to 13%. But for this also, the financial profile of the co-applicant should be strong and students must meet other eligibility criteria to avail of an education loan for Canada. To know more about this, request a callback on the website, and our financial officer will connect with you soon. 

• Type of Education Loan Recommended to Study in Canada: Secured/ Unsecured loan
• Maximum education loan amount provided: Upto 1.5 Cr(with security) and 25-30 lacs(without security)

To know more, you can check out the 18th Episode of the Loanflix web series. This is a must-watch for students who have decided to study in Canada and learn about Canada GIC, payment of tuition fees, how to decide on the disbursement amount while applying for an education loan for Canada, etc. 

For study in Ireland, students can take both unsecured and secured education loans. A secured education loan requires the loan applicant to pledge some kind of collateral security against their education loans. And for unsecured, students are not required to pledge collateral.

Although many NBFCs provide education loans for Ireland, unsecured education loans should not be the priority of students. Even though the unsecured education loan process may seem easy and hassle-free, it is very important to take note of the education loan policies of NBFCs before you decide to proceed with the entire process.

Government banks, on the other hand, may follow a daunting and lengthy education loan process but their repayment policies are student-friendly and flexible with the lowest interest rates available,  thus making it one of the best and safest ways to borrow an education loan. And if you’re worrying about the lengthy process, do not worry as WeMakeScholars got your back. We will help you with the entire education loan process in Government banks in just 15 to 20 days. 

• Type of Education Loan Recommended to Study in Ireland: Secured/ Unsecured loan
• Maximum secured education loan for Ireland: Upto 1.5 Cr(with security) and 15-20 lacs(without security)

An education loan is one of the most prominent sources of funding for higher education in Singapore for Indian students. Now, let's understand its requirements of it.

In unsecured loans, lenders pay close attention to factors such as the global ranking of the universities in Singapore, the overall financial capability of their co-applicants to repay their education loan, etc to mitigate the risk as there is no involvement of collateral. To be eligible to get an unsecured education loan, students have to fulfil certain requirements like an excellent academic profile, the student must have received a letter of confirmation from a well-ranked institution, and co-applicants need to meet all the requirements set by the respective NBFCs/Private banks. These are a few basic requirements for a Singapore student loan without collateral. Unless and until the above criteria are met, it is not possible to get an education loan. As a lot of students struggle to fund their education with unsecured education loans to study in Singapore, most students opt for secured education loans through Government/Public banks. 

• Type of Education Loan Recommended to Study in Singapore: Secured education loans
• Maximum secured education loan for Singapore: Upto 1.5 Cr

For students who are seeking an education loan to study in the UAE, it is important to understand a few factors before proceeding ahead. 

For studying in the UAE, the chances of getting an unsecured education loan are very bleak. Therefore, in this case, Government banks are the only source who are offering secured overseas education loans to study in the UAE. However, students must not rely on this completely as government bank education loans come with their own set of terms and conditions.

Some of the conditions are: 

• The student’s academic profile has to reflect excellent performance throughout their academic career.
• Avoid backlogs in your academic profile as this will not be deemed eligible for an education loan to study in UAE
• The value of the collateral being pledged as security for a Master's education loan should be higher than their actual education loan requirements
• Individuals who possess a strong financial background only can be named as co-applicants for an education loan to study in the UAE

For students who are willing to fund their higher study courses in the Middle East, there are special rules and regulations. For eg., the SBI education loan, which is considered to be the best bank for education loans in India, requires students to take a country deviation to be able to fund their courses in such countries. Therefore, connect with our team at WeMakeScholars if you are looking for an education loan to study in the UAE. 

• Type of Education Loan Recommended to Study in UAE: Secured education loans
• Maximum secured education loan for UAE: Upto 1.5 Cr

Education loan to study in UAE totally depends on the students meeting the mentioned eligibility criteria by the respective bank. In this case, not many lenders can provide student loans to study in the UAE as there is no other guarantee whatsoever of the student being accepted into a particular university. Therefore, we recommend you request a callback at WeMakeScholars. Our team will come to your rescue as we can make it possible only if you apply through us. As we share a professional affinity with lenders, our financial team can push your application a little further and get it done.