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10 best study abroad loan providers – Indian banks, NBFCs or international lenders?

best-study-abroad-loan-providers

Let’s look at 10 best study abroad loan providers in today’s post.

After securing admission into your dream university abroad (MS, MBA or BS), you must organize the finances to cover the costly expenditures of a university, including living costs, tuition fees. Even though your parents might be able to aid you in covering the cost of education, taking a study abroad education loan to smoothly sail through higher education without any financial burden would be advantageous to you in many ways. 

The principal reason for students opting for an education load is to become financially independent and reduce the workload on their parents. Getting a loan can also be due to a lack of funds compared to the high cost of renowned universities in foreign countries. Sometimes, the savings are not enough to fund your education, so taking a study abroad loan becomes necessary.

Another major cause of students taking an education loan is when unexpected circumstances occur e.g., loss in parent’s financial matters. As a result, the loan money is used to fund the student’s education without any break.

Whatever the reason for opting for an education loan, maybe, once you must consider which loan to take. A mortgage is influenced by a number of factors, such as the interest rate, type of lenders, and the repayment policy. Therefore, a comparison and a list of outstanding loans are discussed here to help you in making an intelligent decision while taking an education load for studying abroad.  

Loan Providers for Study Abroad Aspirants

1 – Loan provided by National Banks

A significant advantage of taking a loan from national banks is that they have very low-interest rates compared to the other banking systems.

However, there are two main disadvantages to such loan schemes.

First of all, national banks need security if the loan amount is more than ten lakhs. It is often challenging for students to arrange security.

Secondly, hundreds of thousands of people apply for education loans via the national bank. As a result, the processing time is very long, making the entire process tiring. Moreover, such loans usually cover only the tuition fee with a minimal amount.

2 – Loan through Non-banking Financial Companies (NBFCs)

Major NBFC’s include Auxilio and Credila. NBFCs provide a good option for taking a loan; however, the main disadvantage is that the interest rate of the loan is very high. Moreover, some of the tax benefits are excluded in their loan schemes.

These companies mainly target student education loans. Therefore, they are much more focused on providing a good option for the applicant. They also offer highly customized loan plans for the students wishing to take a loan and study abroad.

The processing time of the NBFCs loan is very low. If your documents are complete, authentic, and verified, it is likely that the decision about the loan is made within 1 to 5 days. Options of unsecured loans, home service, and flexibility in the repayment schedule are offered as well.

3 – Loans by Non-Indian Lenders

Major non-Indian organizations offering a loan to the students are Prodigy Finance and Mpower. The details of these loans can be accessed very easily as they built very user-friendly applications and websites for easy accessibility. No security is necessary for many of the loans through foreign lenders. Moreover, the rate of interest is lower than the other lenders.

On the other hand, these loans have their disadvantage as well. Usually, the loans do not cover all of the expenses associated with studying and living abroad. About 15% to 20% of the fee and other expenses have to be paid by the students themselves. These companies do not enjoy the tax benefits as they are foreign-based. Even though the interest rate is low, the amount ultimately repaid can be much higher than the original amount due to the depreciation of the country’s currency.

The processing fee is very high for foreign loan lenders. This is because they work very rapidly and efficiently, so the charges are high. Moreover, only a restricted number of universities are covered by foreign lenders.

4 – Foreign Loans

Foreign loans have a very low rate of interest, from about 2% to 5%. Moreover, no collateral is necessary for the majority of these loans.

The disadvantage of a foreign loan is that it can only be taken on the guarantor’s name. You need to get someone very close to take out the loan on his or her name.

In order to conclude about the best choice between an Indian lender and a foreign loan provider, every applicant must determine and smartly calculate the total loan needed and rate of interest that you will have to pay according to the policies of each lender.

In international lenders, the interest rate is very low compared to the Indian banks. However, the currency keeps fluctuating over time so a final calculation cannot be made about the repayment amount. On the other hand, Indian lenders have a high-interest rate, but you will be able to calculate the definite repayment amount and plan the schedule accordingly.

Therefore, every applicant must decide between the Indian and international lenders, depending on their specific situation.

Also read: How to get a Study Abroad Education Loan?

Ten best study abroad education loan providers

A number of options, Indian banks, as well as international lenders, are available for students to get study abroad education loan. Some of them are (in no particular order):

  1. State Bank of India
    It offers a maximum loan of RS 20 lakhs with an interest rate of 10.5% per annum.
  2. Axis Bank
    It is a good choice for customized loans with an amount greater than 20 lakhs. The interest rate of Axis Bank is 13.7% above 7.5 lakhs.
  3. HDFC
    Applicants can take the maximum loan of 10 lakhs from HDFC, with the rate of interest being around 13% per annum.
  4. State Bank of Mysore
    It can lend a maximum of 40 lakhs to make your dream of studying abroad come true. The interest rate varies from case to case.
  5. Avanse Financial Services
    It has no limit on the maximum loan. Applicants can discuss their specific cases with the bank representative. The interest rate at Avanse Financial Services is 11.7% above ten lakhs.
  6. Prodigy Finance International Student Loans Company
    Some students face immense difficulty in getting a goal from Indian lenders. However, many global options are present in this industry. One of the most popular ones is the Prodigy Finance Loans Company. It has various schemes and options for applicants.
    The range of the loan offered is from 10 lakhs to 1.5 crores. No major security is required in this loan scheme, and the interest rate is from 11.57% to 13.57%. A big but is – they support only a limited schools.
  7. Credila
    It does not specify any limit on the loan.An interest rate of about 12% is present above the loan of 7 lakhs.
  8. Indian Overseas Banks
    It offers the maximum loan of 40 lakhs and an interest rate of 12.25% above 7.5 lakhs.
  9. Allahabad Bank
    With the limit of 50 lakhs loan, Allahabad Bank has an interest rate of 10.85% above 7.5 lakhs.
  10. Syndicate Bank
    It offers an optimum loan of 50 lakhs and an interest rate of 12.25% for the amount of more than 7.5 lakhs.

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