Getting a student loan for studying abroad is no longer a problem. The earlier you plan for it and the more you research, the better your chances of getting a loan. A fitting place to start would be Google search. You can compare interest rates and read reviews on such sites to make an informed decision before applying.
Simpler than Before
Education loans offer students a wide range of choices when it comes to financing their education. Education loans are available for all courses and programs, irrespective of whether the student is pursuing an undergraduate course or a postgraduate program. So, those who want to pursue their dream of studying abroad, education loans can help them fulfill that dream with ease. Students can now study in some of the best universities in the world, thanks to education loans.
Types of Education Loan
Education loans are available in two types. One is a secured loan and the other one is an unsecured loan. An unsecured loan lacks collateral which is a major concern of banks and financial institutions in lending money. In such a situation you have to provide proper documentation so as to prove that you are eligible to borrow the amount that you wish to.
On the other hand, one can easily get a secured loan because it has collateral. Hence, this doesn’t have as many criteria or stringent requirements.
Education loans with collateral:
Secured education loans or student loans are those where the collateral is provided by the borrower and he/she has to repay this loan in full when it comes due. These are basically loans against property or home loans.
Education loans without collateral:
These are unsecured loans that do not require any kind of collateral from the borrower or guarantor. The risk involved in taking such a loan is comparatively much higher than that of a secured education loan. Some private financial institutions may also offer educational loans without collateral but they come at a much higher rate of interest as compared to that of secured educational loans.
Both types of education loans are available for all sorts of degree programs, including undergraduate and graduate degrees. As far as the interest rate is concerned, it differs from bank to bank and also depends upon the tenure for which you take an education loan.
Documents Required to Get Education Loan for Studying Abroad
In order to apply for a loan for studying abroad, you will have to submit the following documents:
- Application Form
- Passport-size photographs
- Educational Documents
- Proof of Identity (like passport, Aadhaar card, PAN Card, driving license)
- Employment certificate if applicable.
- Address proof (like passport, voter ID card, aadhar card or ration card, bank account statement, more)
- Identity Proof (like passport or voter ID card or Aadhar card or Ration card or Bank passbook)
- Education proof
- Letter from University/Institute stating that they have received the application
Depending on which bank you’re applying to and the type of education loan, you may be asked to refurbish other documents as well.
Find the “Right” Education Loan to Study Abroad
There are several factors that you need to keep in mind while selecting an education loan. You can get these loans from private institutions depending upon the course and country of study.
Before jumping to applying for a loan, you need to research various institutes that offer education loans, repayment tenure, etc. The cost of the education loan may vary based on factors like the registration fee, processing fee, documentation charges, etc., which can be discussed with the consultant before finalizing the deal. Some institutions also charge extra for services like pre-payment options and moratorium extension.
The main objective of education loans is to help students fund their higher and professional studies. However, there are several other costs involved, such as application fees and travel expenditures. Moreover, apart from the benefits of acquiring education, it also comes with tax benefits.
Students should also consider the rate of interest they will be paying on their loans while choosing one. There are several options available in the market and in most cases, the EMI amount will vary depending on the interest rate applied. The maximum amount that can be taken as a loan varies according to various factors such as age and qualification level.
Apart from all this, students should also check whether they will have to pay any processing fee or not. Processing fees generally vary between 0-2% of the principal amount of the loan depending on its size and tenure.
Choosing the right education loan to study overseas is an important decision. It’s not just a matter of getting the lowest rate of interest but finding the loan that will give you the most value for your money. And this can be a daunting task for the students. This is why it’s recommended they consult experts and seek their help. Frame Learning, one of the leading overseas education consultants, extends end-to-end help to students with their education loan applications. Connect with us today and let’s work to get your study-abroad successfully financed.