How to Get an Education Loan for Abroad Studies in 2024?

Education Loan for Abroad Studies: Eligibility and Process For Securing

Many students in India aspire to go abroad for higher education, given the quality of education abroad. For those who cannot bear the high cost, an education loan for abroad studies allows them to meet their goals without financial restraints. 

Many abroad education loan schemes in India help these students open the door to numerous opportunities. The study abroad student loans not only help them fulfill their dream but also study in renowned universities or institutes. 

This blog explores the step-by-step process of how to apply for an education loan for abroad studies. It also covers the eligibility criteria, required documents and all other important details. 

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Understanding Education Loans for Abroad Studies

An education loan for study abroad is intended to help students follow their academic goals in a foreign country. For those who would not have the money to pay the high costs of an overseas education, these loans are a crucial lifeline.

Private banks and NBFCs cover the entire cost of studying abroad. Public banks, however, may require students to pay 10–15% of the expenses themselves. The education loan would cover the remaining amount.

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What are the Benefits of Education Loans for Abroad Studies?

Higher education abroad may change your life by providing internationally recognised degrees, new cultural experiences, and better employment chances. However, high fees might dissuade many prospective students. Here, education loans for abroad studies may assist students reach their academic and professional goals with several benefits:

Access to Cash for Tuition Fee and Educational Expenses

Pursuing higher education overseas can be costly, with tuition, living expenses, and travel charges all adding up. An education loan can provide the cash you need to close the difference between the program's overall cost and your available money. Enrolling in a famous foreign institution or program that would otherwise be out of your budget is made possible with a loan.

Empower You to Study Abroad

Many students pass up the chance to study abroad owing to financial constraints, losing out on significant experiences and career advancement opportunities. By providing the money required to pay the costs of an overseas program, an education loan may help to avoid such lost chances. This improves your academic credentials but also opens up your views, exposes you to other cultures, and raises your chances of landing a better job.

Provides Almost 100% Coverage

Most educational loans are intended to pay for a broad range of costs related to studying overseas. Together with the cost of tuition, these loans often pay for living expenses, travel, books and study materials, lodging, and even health insurance. This thorough coverage guarantees you the resources you need to concentrate on your academics without having to worry about money.

Lower Interest Rates for Affordable Learning

Generally speaking, education loans have lower interest rates than other kinds of personal loans, especially those provided by government organizations or respectable financial companies. This is so because these loans are provided especially to help students with their academic pursuits, which eventually makes them more manageable and inexpensive.

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Different Institutions Offering Education Loans

Here is the list of different banks and lenders that provide student loans for studying abroad:

Nationalized Banks Offering Education Loans

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Private Banks Offering Education Loans

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NBFCs Offering Education Loans

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Different Types of Student Loans for Abroad Studies

Education loans for abroad studies come in various forms, each with its own set of characteristics and eligibility criteria. Here are some of the common types:

1. Government Education Loans: Government-funded loans are usually intended to help deserving students from less affluent backgrounds. For example, via nationalized banks, the Indian federal government offers students studying overseas loans up to ₹20 lakhs.
2. Private Student Loans: These student loans are offered by private banks and financial organizations.
3. Secured Education Loans: For this type of loan, the borrower must provide fixed deposits or real estate as security. In case of default, the collateral protects the lender and often leads to better interest rates and repayment conditions.
4. Unsecured Education Loans: Unlike secured loans, unsecured education loans for overseas studies do not need the borrower to provide any security. As the lender bears more risk, these loans have higher interest rates and stringent qualifying requirements.

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Features of Different Lender's Education Loan for Abroad Studies

Different lenders in India offer different education loans for abroad studies with varying features, interest rates, and eligibility. The top banks in India that offer education loan for abroad studies are:

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Eligibility Criteria for Study Abroad Education Loans

Lenders typically have certain qualifying requirements that students must meet in order to get an education loan for abroad studies. These criteria ensure that deserving applicants have seamless access to student loans and that they can pay back the loan after graduation. The eligibility criteria for applying education loan for study abroad are as follows:

1. Nationality: Students who are applying for education loans must have an Indian citizen.
2. Age: Minimum age of 18 years at the time of loan application.
3. Academic Record: At least 50% marks are essential.
4. Admission: Confirmed admission into a recognized foreign university/institute.
5. Course Eligibility: Regular graduate, postgraduate, diploma, certificate, or doctoral courses are covered.
6. Collateral Requirements: Collateral property or fixed deposits may be required for higher loan amounts.
7. Co-Applicant Eligibility: Co-applicant (if required) must be an Indian national.

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Documents You Require for Education Loan for Abroad Studies

Your eligibility for the student loan is measured based on the correct documents you submit. When applying for education loan for abroad studies, you are required to submit a set of the following documents:

1. For Identity 

The co-applicant and applicant must submit the following list of identity-related papers:

KYC Documents

• PAN card
• Driving license
• Aadhar card

Address Proof

1. Aadhar card
2. Voter’s ID card
3. Passport
4. Electricity/water/ LPG Bill
5. Current house lease agreement

Academic Record Documents (Applicant)

1. 10th result
2. 12th result
3. Proof of admission
4. Undergraduate result semester-wise
5. Entrance exam results (GRE, GMAT, TOEFL, IELTS, and more)

2. Financial Documents from the Co-applicant

In addition to proof of identification and residence, the following financial records must be submitted:

For salaried co-applicant

• Salary slips (last 3 months)
• Form 16 for (last 2-3 years)/IT Returns (last 2-3 financial years)
• Bank account statement (6 months, salary account)

For Self-employed co-applicant

1. Business address proof
2. TDS certificate (Form 16A)
3. Last 3 years, ITR
4. Certificate of qualification (for Doctor/C.A. and other professionals)
5. Bank account statement

3. Technical Documents for Collateral

The following is a list of the technical papers you must submit when applying for a student loan:

1. NOC and allotment letter
2. Possession certificate
3. Approved layout plan and permissions
4. Copy of prior sale deeds
5. Conversion certificate in cases when the land's usage has shifted from agriculture to other uses
6. Urban clearance certificate

4. Legal Documents for Collateral

In addition to all of the above, you must also present the following list of legal documents:

1. Sale/gift/partition deed
2. Khata certificate and extract
3. Encumbrance Certificate (EC)
4. Latest property tax receipt

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What Expenses Does the Education Loan for Abroad Covers?

The student loan for study abroad proves to be advantageous for students as it covers extensive expenses related to education. Here is a list of all the expenses that the student loan normally covers:

1. Tuition Fee: The tuition fee is the main expense covered by an education loan. It covers the entire tuition fee for the course.
2. Examination, Library, and Laboratory Fees: The student loan covers examination, library, and laboratory fees, which are supplementary costs levied by educational institutions for the use of their facilities and services.
3. Books and Equipment: The loan empowers students to choose and purchase their own academic resources (books and equipment), giving them the freedom to enhance their learning experience.
4. Living Expenses: While some lenders cover only a percentage of living expenses, others provide full coverage. This includes lodging, utility bills, food costs, and local transportation.
5. Travel Expenses: The student loan also covers the cost of travel to the country of study.
6. Purchase of Computers and Laptops: The cost of acquiring a computer or laptop for academic usage is frequently covered by education loans, but only if it is required for the course.
7. Cost of Health Insurance: Health insurance is required for students traveling to study abroad. As a result, it is often funded by an educational loan.

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How to Apply for Education Loan Abroad

Planning and preparation are essential to obtaining an education loan for study abroad. Your likelihood of a successful loan application may be raised by making sure you have all the required paperwork and satisfy the qualifying requirements. The following are some crucial actions to do before applying for a loan:

Step 01: Determine the Loan Amount Required

Getting an education loan for abroad studies requires precisely figuring out how much your overseas education will cost in total. This covers tuition fees, living expenditures, transport, lodging, and any other miscellaneous expenses. Make sure you understand all the financial needs in order to choose the right loan amount to apply for.

Step 2: Research and Shortlist Potential Lenders

You can research and shortlist possible lenders. Consider possibilities such as banks and non-banking financial entities, as well as government-backed credit programs. Consider aspects such as interest rates, repayment periods, eligibility requirements, and any additional benefits or incentives provided by each lender.

Step 3: Gather All Required Documents

After finding possible lenders, gather all the paperwork needed for the loan application procedure. This usually includes income statements, admission letters, identification and residency verifications, academic documents, and any other supporting documentation the lender requests.

Step 4: Fill Out the Student Loan Application form Accurately

Carefully read and accurately fill out the loan application form provided by the lender. Verify that all of the information supplied is correct and matches the supporting records. Check the application a second time for any mistakes or omissions before submitting.

Step 5: Apply and Await Approval

Send your loan application to the selected lender after you've finished the application form and gathered all the required paperwork. Prepare to provide the lender with any further details or explanations they may ask for while evaluating you. Await the lender's decision on your loan approval. Once the education loan for abroad studies has been approved, the amount will be disbursed to your account.

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How to Get Education Loan for Abroad Studies with Propelld

Achieving your goals of studying in a foreign university requires getting an education loan for abroad studies. You may confidently go through the application process if you know the procedures, eligibility criteria, and steps involved. As easily as it is said, the steps involved in applying for an education loan abroad are extensive and complex. It also exposes students to the possibility of rejection.

Propelld makes the whole process easier by designating an education loan counselor who takes care of every step. We work with extensive partners and lenders that are dedicated to making financing more accessible.

1. Check Your Eligibility: Contact us to initiate the education loan for abroad studies application process. A Propelld education loan counselor will get in touch with you to assist you in learning everything there is to know about loans for study abroad.
2. Create an Account on Propelld: Next, register and create a fresh account with Propelld. After creating an account, log in to your Propelld dashboard.
3. Upload Your Documents: After gathering all the necessary documents that the Propelld counselor recommends, upload them to the secure drive.
4. Wait for Approval: The counselor will handle the remaining steps and support you along the process. After verification, the counselor negotiates for a more favorable student loan amount and term.
5. Loan Approval and Disbursement: After your documentation is verified, you will receive a letter and an agreement authorizing your loan. Following this, the amount will you credited to your account.

Frequently Asked Questions

What is the maximum loan amount I can avail of for studying abroad?

Though it varies across lenders, the maximum loan amount usually falls between ₹20 lakhs to ₹1.5 crores for public sector banks and up to ₹50 lakhs for private banks.

Do I need a co-applicant or collateral to apply for an education loan?

Many lenders provide student loans without security up to a specific amount. Higher loan amounts may require collateral, such as fixed deposits, real estate, or a co-applicant.

What is the typical repayment tenure for an education loan?

The payback period for educational loans often runs between 5 and 15 years, depending on the lender's regulations. Before the loan starts to be paid back, most lenders provide a moratorium period (usually six months to a year).

Can I apply for an education loan if I plan to study online or through distance learning?

Most lenders provide school loans for full-time, on-campus study at accredited foreign colleges. Check with the particular lender since online or distance learning programs may not be qualified for education loans from all lenders.

What documents are required to apply for an education loan?

The required papers typically include the completed application form, academic records, university admittance letter, copies of passports, bank and income statements, and any additional paperwork the lender specifies.

Can I get an education loan even if I don't have a co-signer?

Without a co-signer, it is feasible to get an education loan; however, the lender can ask you to meet other requirements, including collateral, a better credit score, or consistent income. Higher interest rate no-cosigner loans may also be available from certain lenders.

How much loan amount can I apply for?

Usually, the amount of loan you are eligible for is determined by things like the cost of the course, the university, living costs, and the regulations of the lender. Loans to pay lodging, tuition, and other related expenses are available from most lenders. It's best to properly forecast your costs and apply for the necessary amount.

Can I use the education loan for expenses other than tuition fees?

Although tuition and other academic expenditures are the main purpose of education loans, some lenders may let you utilize a percentage of the money for living expenses, travel, and other associated charges. However, it is critical to review the lender's regulations and restrictions about the legal use of the loan amount.

What happens if I drop out or fail to complete my studies?

Should you decide to stop studying or don't finish, you will still have to pay back the school loan. Whether or whether you have finished the course, most lenders want you to begin payments right away or after a grace period. Before applying for the loan, make sure you know the lender's rules on these kinds of situations.

Can I prepay or foreclose the education loan?

Indeed, most lenders allow you to prepay or, in certain cases, foreclose your college debt. Some lenders could, however, impose a foreclosure fee or prepayment penalty. Check the fine print of your loan agreement for information on prepayment or foreclosure alternatives and related costs.