How to Obtain an Education Loan for Studying Abroad in 2024 ?

• Oct 02 2024

Migrating to various destinations around the world for education is not just a growing trend but a remarkable opportunity. Wondering how? It is so because international students gain invaluable global skills and broaden their personal and professional horizons while studying abroad. This experience is transformative for many students, exposing them to new cultures and fostering greater understanding and tolerance.

Research shows that students who study abroad typically achieve higher grades, experience lower dropout rates, and graduate rates are higher than those who study in their home country. Whether in elementary education or pursuing a postgraduate degree, the advantages of global exposure can profoundly enhance a student's life and future prospects.

However, studying abroad can be expensive due to the high cost of foreign currencies. Students should plan their budget by assessing how much money they will need for their education, including tuition fees, living expenses, and other related costs. By planning ahead, students can better prepare themselves for the financial aspects of their overseas education.

What Steps to Take for Securing an Education Loan to Study Abroad?

International students must have a good financial plan and follow it with utmost accuracy. Let us see what are the steps students must follow to be financially vigilant:

• Estimate Costs: Calculate the total cost of your education, including tuition fees, accommodation, travel, study materials, and living expenses. This will help determine the loan amount.
• Select Loan Type: Indian banks offer both secured loans (which require collateral) and unsecured loans (which do not). Secured loans generally come with lower interest rates but require collateral, such as property or fixed deposits. Unsecured loans may demand higher interest rates but do not require collateral.
• Eligibility Criteria: Each bank has different criteria for loan sanctioning. Ensure you meet every loan eligibility criteria the bank sets.

Typically, students applying for education loans in India must:

• Be an Indian citizen.
• Secured admission to a recognized university abroad.
• Provide proof of a parent or guardian.
• Compare Loan Options: Banks and financial institutions offer loans with varying interest rates, ranging from around 8.5% to 16%, depending on whether the loan is secured or unsecured. It is essential to compare the interest rates, processing fees, loan tenure, and repayment terms before deciding.
• Scholarships: Many universities and organizations offer various kinds of scholarships for international students. As a student, explore multiple scholarship options available to reduce the loan burden.
• Consider Loan Without Collateral: If you do not have assets to pledge, choose banks or financial institutions that offer unsecured loans with a co-signer. A co-signer is an authorised person to take on the responsibility of the loan if the applicant is unable to repay it. However, loans with co-signers often have higher interest rates, so choose wisely before applying for a study abroad bank loan.

Loan Application Process

As a student, you must understand the loan application process from the concerned bank representatives either by visiting the bank or online.

For a loan application, students can choose from either of the options:

1. Online: Students can apply directly through the bank's official website, where they can fill out the application form and upload the necessary documents.
2. Offline: Students can also personally visit their nearest branch to complete the loan application process.

The process includes:

• Choose a bank that offers favourable terms.
• Submit the required documents.
• After the bank review, if approved, the loan will be disbursed.

It is highly recommended to understand the repayment schedule and any moratorium period the bank offers. Some loans allow a grace period where you only begin repaying after completing your studies or securing a job.

Essential Documents Needed for a Study Abroad Loan

Now that we have a general understanding of loan options let us explore the essential documents required to secure a study abroad loan.

1. Identity Proof
2. Proof of Address
3. PAN Card
4. Photograph
5. Academic Records
6. Standardized Test Scores
7. English Proficiency Test Scores
8. Income Proof
9. Bank Statements
10. Collateral Documents (if applicable)
11. Visa Documentation
12. Letters of Recommendation
13. Statement of Purpose (SOP)
14. Resume/Curriculum Vitae (CV)

Keep in mind that the required documents can differ from one bank to another. It is important to verify the specific requirements of your selected bank to ensure you provide everything needed for a smooth application process. For more information regarding loans, the application process, and other financial assistance options, please feel free to contact  ImmiEd Global, the leading Study Abroad Consultants in Kerala. Our overseas study experts are here to guide you through Study Abroad options, ensuring they are effectively tailored to your needs.