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How to get a Study Abroad Education Loan?

study abroad education loan

Before understanding the process of getting an education loan to study abroad, you must be familiar with how it works. First of all, you cannot even apply for the student loan if you have not secured admission at a renowned school abroad.

How does education loan work?

The admission offer is necessary to asses your credibility for the study abroad education loan. After a total approximation of the education cost is provided by the education institute, the type of the program or degree you have applied to will play a role loaning. The prospects of your future are guessed depending on your degree, to determine if you will be able to repay the loans in the future.

Majority of the loan givers need a guarantor to ensure the loan will be returned over time. Education loan to study abroad is usually free from the condition of putting something valuable against the loan money to secure loan repayment.

Moreover, a student is never given the loan money directly. These loans are managed by the educational institute and its financial aid office. Thus, education loan for studying abroad is provided directly to the institution instead of specific students’ bank accounts.

Shall I go for study abroad education loan?

There is a myriad of benefits of getting an education loan to study abroad. Some of them are:

  1. A loan can make you financially independent. Major loans cover all of your expenses to study abroad, including living expenses, healthcare charges, and other expenditures.
  2. Study abroad loan offers easy repayments. The small repayment amount is decided over a longer period of time to make it easy for the students to repay the charges.
  3. Education loan also includes the option of applying for a scholarship, which can result in loan forgiveness or decrease in the amount of loan to be repaid.
  4. Many students are eligible to apply for the education loan to study abroad.  Applicants from undergraduate as well as postgraduate can apply.
  5. Loan processing time is very less so the students can make decisions about their admissions quickly well before the deadline of a particular institute.

What kind of loans are available?

Bank Name Study Abroad Education Loan Amount Interest Rates
State Bank of India (SBI) Up to ₹20,00,000 (20 Lakhs) 10.70%
HDFC BankUp to ₹36,00,000 (36 Lakhs) 14.88%
ICICI Bank Up to ₹3,00,00,000 (3 Crore) 11.50%
Punjab National Bank (PNB) Up to ₹1,00,00,000 (1 Crore) 11.10%
Canara Bank Up to ₹36,00,000 (36 Lakhs) 10.70%
Axis Bank Up to ₹75,00,000 (75 Lakhs) 13.70%
Bank of Baroda   Up to ₹20,00,000 (20 Lakhs) 15.00%
IDBI Bank Up to ₹20,00,000 (20 Lakhs) 9.50%
Avanse Financial Services Customized according to the applicant Custom

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

What documents are required for study abroad education loans?

To apply for education loan for studying abroad, the applicants must have four main types of documents which are listed below:

1. Academic Documents

  • Offer letter from the college (in case of Bachelor’s) or graduate school (MS or MBA)
  • SAT Exams, LSATS, GRE GMAT, TOEFL, IELTS, other aptitude tests
  • Result cards of previous classes:
    • Class 10th
    • Class 12th
    • Equivalence certificate can be provided as well.
    • Graduation degree, if relevant.
    • Post-Graduation degree, if relevant.
  • Student Status Certificates (country-specific)
  • USA I-20 Certificate of Eligibility for Nonimmigrant Student Status
  • UK (England) CAS (Confirmation of Acceptance for Studies)
  • Australia GTE (Genuine Temporary Entrant) as per SVVF
  • Other student VISA and immigration letters
  • Scholarship for foreign education records (if any)

2. Financial Documents

  • Bank Statements
  • IT Returns copy
  • GST returns copy: (only in case of self-employed/business-oriented applicants/co-applicants)
    • Min: last two quarters, max: last year
  • Salary Proof:
    • Income tax computation statement (attested by CA and employer)
    • Salary Slips (Min: last three months, max: last nine months)

3. Collateral Documents

  • Loan against property:
    • Property deed/lease agreement/allotment letter by Govt./Municipal Authority/NOC from society-builder
    • Property tax statements
  • Loan against security:
    • DE-mat account statement (min: 12 months, max: 36 months)
    • Insurance policy receipt and original policy certificate
  • Loan against deposits:
    • Original FD/RD/Gold Deposit/Bond certificate
    • Interest statement: (min: 6 months, max: 24 months)
  • Loan against third-party guarantee:
    • Certificate of third party guarantee (with signature and verified by appropriate authority)

4. Identification/KYC Documents

  • PAN card (at least Co-applicant mandatory)
  • Aadhaar Card/ Passport Copy/Driving License/ Voter’s ID
  • Residence proof: rent agreement/residential lease/electricity bill-phone bill/LPG bill
  • PIO (person-of-Indian origin)/NRI (non-residential Indian) Identification documents

It is recommended to start preparing the documents early for the loan program to avoid any confusion at the last minute.

What is the process for getting a study abroad education loan?

Every major education institution has a student financial aid office assist the students in applying for education loan. The whole process is quite lengthy and exhausting, so it is better to apply as soon as possible. In this way, you will be able to avoid any problem in getting a loan to study abroad.

Generally, the following process is performed for getting a study abroad education loan:

  • Evaluate the list of degrees in which you are going to enroll in to make sure it is recognized by the loan provider
  • Asses the total amount of the loan you will be needing. Calculate the money that you will be able to arrange by yourself.
  • Compare the various student loans offered by a number of banks. This helps you in determining the best loan scheme according to your demand.
  • Finalize the bank, loan scheme, and the total loan amount as soon as possible. Apply for the load using the application form and contact the loan provider if you have any ambiguities about the process.
  • Once the loan is approved, a loan document is issued by the bank. This document will include every detail about the loan.
  • Sign the loan document if you are satisfied with the terms and conditions of the loan.
  • The loan amount will be disbursed by the bank according to the terms of the university.

Also, read: Study abroad scholarships for students

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