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For admission to an international university, financing your education is often the most daunting part. With the cost of studying in top global destinations increasing year after year, many students are turning to education loans as a necessary means of funding their studies.
Fortunately, India's nationalised banks and private institutions offer various education loan schemes explicitly designed for students aspiring to study abroad. This guide will explore the key education loan schemes to study abroad, including government-backed options, private loan programs, and everything in between.
We will help you make an informed choice that best suits your academic and financial needs!
Education Loan Schemes to Study Abroad: A Brief Overview
The cost of studying abroad has seen exponential growth over the past few decades.
The average annual tuition fee for a master's program in the United States ranged from USD 60,000, depending on the university and the course of study. Additionally, students need to factor in accommodation, food, transportation, health insurance, and other personal expenses.
To bridge this financial gap, nationalised banks in India, along with a growing number of private institutions, offer a range of loan schemes customised to students planning to study abroad.
- These loans cover up to 100% of the expenses, although some schemes may require students to contribute a marginal amount (usually between 10% to 15%).
- Banks typically offer a moratorium period that extends until the completion of the course, plus an additional few months afterwards.
- The repayment tenure for most schemes ranges up to 15 years, making the repayment process more manageable.
Planning to study overseas but worried about finances? Don’t miss our detailed guide on how to get an education loan for abroad studies in 2024.
Government Education Loan Schemes Abroad
Government-backed education loan schemes offer a low-interest and accessible way to fund education abroad. These schemes provide reduced interest rates, flexibility in collateral requirements, and lower processing fees.
Let's examine some of the most prominent government-sponsored initiatives currently available.
Get an Education Loan 10X Faster than Banks.
Private Education Loan Schemes for Studying Abroad
While government schemes provide excellent opportunities, private banks also offer education loans, typically with faster processing times and more flexible collateral requirements. However, private loans often come with higher interest rates and stricter eligibility criteria.
Private vs Government Education Loan Schemes: A Comparison
When choosing between private and government education loan schemes, it's essential to weigh the pros and cons of each. Here's a quick comparison:
Minimal Docs, Maximum Approval - Apply Now.
Education Loan Interest Subsidy Schemes
In addition to loans, sure students may also benefit from interest subsidy schemes provided by the government. These subsidies are designed to ease the financial burden of education loan interest during the course duration or moratorium period.
Central Sector Interest Subsidy Scheme (CSIS)
The Central Sector Interest Subsidy Scheme is a government initiative that provides a full interest subsidy for students from economically disadvantaged backgrounds. This scheme applies to students pursuing education in India or abroad, provided they meet specific eligibility criteria (such as family income limits).
Eligibility Criteria:
- Annual family income must be less than INR 4.5 Lakhs.
- The loan must be taken under the Educational Loan Scheme of Indian Banks.
This scheme is particularly beneficial for students who may face challenges in repaying loan interest during their studies, as it covers the interest during the moratorium period.
How to Manage Education Loan While Studying Abroad? Key Insights!
Taking out an education loan is often the first step toward pursuing higher studies abroad. But managing that loan effectively, especially when living and studying in a foreign country, can be a challenge.
A Reddit User in r/Indians_StudyAbroad shared:
“I have a 21 Lakh INR loan at an 11.5% interest rate, and I’m heading to Germany for my Master's. How should I manage this loan while studying? Should I focus entirely on my studies or look for part-time work?
Insight:
Managing a substantial education loan while studying abroad requires balancing study priorities and part-time work opportunities. Here’s what you should consider:
- Living Expenses and Tuition: As a student in Germany, living expenses vary by city but can range from €700 to €1,200 per month. The loan you have taken will cover these costs, but it's essential to plan how you will manage this while maintaining a healthy work-life balance.
Should You Work While Studying?
What Can You Do Now?
- Several scholarships are available to international students in Germany. Some options include the DAAD Scholarship and university-specific grants, which can help alleviate some of your financial stress.
- Since you're planning to take an intensive A2-level German course, building fluency will increase your chances of finding a better-paying job during and after your studies.
- After completing your course, consider consolidating your loans or extending the repayment tenure based on your salary to make the process manageable.
Choosing the right education loan is crucial for your success in studying abroad. The right loan scheme should align with your academic goals, financial situation, and long-term career plans. Remember, whether you choose a government-backed scheme or a private loan, your goal is to ensure that the loan you take helps you achieve your dreams without financial stress.
If you're looking for the right partner that makes this education loan process smoother and simpler, Propelld can help. With quick digital approvals, collateral-free loans up to ₹50 lakhs, and flexible repayment options, Propelld takes the hassle out of financing your global education.
Take the first step towards your future—Apply with Propelld today!
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