Educational loans to Study Abroad
Since there is a hike in education fees everywhere, there are so many ways to overcome these difficulties. Parents are investing their money in mutual funds, unit linked insurance plans etc. to get their children get admitted into reputed foreign institutions or universities and meet their educational needs. Overcoming these issues some banks are providing educational loans filling the gap between shortfall and required amount.
It is not good to dismiss the idea of ignoring the educational loan because you got scholarship. There is no doubt that scholarship will help the student very much. But meeting all the foreign educational expenses is definitely not possible only with scholarship. It basically covers tuition fees, book and any supplies fees, room and board fees, transportation fees, health insurance fees, and also your living expenses.
Educational loans play a dominant role in helping students who go abroad to meet their educational as well as financial needs. Educational loans for foreign institutions usually cover tuition fees, charges for examination, library, laboratory and hostel, cost of purchasing books, equipment, instruments and uniform, Travel expenses for study abroad, caution money, refundable deposit, etc. & study tours, exchange programs and project work.
Here are the details of the educational loans to Indian students:
Documents to be submitted while applying for an educational loan:
- Mark sheet for last qualifying examination of school and graduate studies in India
- Admission proof to the course
- Schedule of expenses for the course
- Copy of letter confirming scholarship (if any)
- Copy of Foreign Exchange permit ( if available)
- Two passport size photographs
- Statement of borrowers bank account for last six months
- Income Tax assessment order not older than two years
- Brief statement of Borrowers Assets and Liabilities
- If not a customer of the lending bank provide proof of identity and residence
Requirements for Education Loan To Study Abroad:
- The applicant must be a resident Indian
- Age group must be in between 16 and 35
- Capable of offering collateral for certain cases
- A co-applicant is required for all full-time programmes. The co-applicant can be a parent, spouse, sibling, father-in-law, mother-in-law, brother-in-law, or a paternal/maternal uncle/aunt
Here are the interest and repayment details of some banks who offer educational loans:
| Name of Bank | Loan Amount | Rate of Interest per Annum |
| State Bank of India | 20 lakhs | Upto 7.5 lakhs- 11.01%
Above 7.5 lakhs- 10.75% The candidates who take educational loan upto 4 lakhs or between 4 lakhs and 7.5 lakhs will get 10 years to repay the amount. The repayment period for the loan amount above 7.5 lakhs is 20 years. |
| Allahabad Bank | 50 lakhs | Upto 4 lakhs- 11.45%
Upto 7.5 lakhs- 11.45% Above 7.5 lakhs- 10.95% |
| Axis Bank | 20 lakhs and beyond depending on requirement | Upto 4 lakhs- 16.50%
Upto 7.5 lakhs- 17.50% Above 7.5 lakhs- 15.50% Repayment tenure is upto 15 years post moratorium period. |
| HDFC | Upto 10 lakhs | Max-15.25%
Min- 9.50% Avg-12.41% No collateral is required for loans up to Rs. 7.5 lacs. The maximum repayment tenure is up to 15 years post moratorium period. |
| Credila | No limit. Depends on requirement | 12.10%+ floating rate(depends on the risks points of the applicant)
Tenure of the loan is the Duration of Study + Grace Period after the Study + Repayment Period |
| Punjab National Bank (PNB) | 20 lakhs | Upto 7.5 lakhs- 11.25%
Above 7.5 lakhs- 11.85% for education at premier foreign universities- 9.85% Repayment period: up to 10 years for loans of Rs. 7.50 lacs or below and up to 15 years for loan above Rs. 7.50 lacs |
| IDBI Bank | Depends on requirement | Upto 10 lakhs-10.45%
Above 10 lakhs-11.45% The repayment period is from 10 to 15 years. |
| Indian Overseas Bank (IOB) | Upto 40 lakhs | Upto 4 lakhs- 11.50%
Upto 7.5 lakhs- 12.00% Above 7.5 lakhs- 12.25% The repayment period is for a maximum period of 5 – 7 years excluding holiday period of six months after getting the job or 12 months after completion of the course, whichever is earlier. |
| State Bank of Mysore | Upto 40 lakhs | Upto 4 lakhs- 12.20%
Upto 7.5 lakhs- 12.20% Above 7.5 lakhs- 11.20% Above 10 lakhs- 11.70% Tenure for repayment of loan is 15 years from the date of completion of course. |
| Avanse Financial Services | No limit. Depends on requirement | 11.5%+ floating rate(depends on the risks points of the applicant)
The repayment period can be 12 to 120 months depending on the loan amount. |
| Syndicate Bank | 20 lakhs | Upto 4 lakhs- 11.00%
Upto 7.5 lakhs- 11.25% Above 7.5 lakhs- 12.25% The repayment period is five to seven years. |
| Canara Bank | 20 lakhs. Depends on requirement | Upto 4 lakhs- 11.15%
Upto 7.5 lakhs- 11.65% Above 7.5 lakhs- 11.15% The repayment period is up to 10 or 15 years depending on the loan amount. |
The association of RBI and Indian Bankers’ Association (IBA), the Government of India has framed a Comprehensive Educational Loan Scheme. This covers all type of courses, including professional courses in schools and colleges in India and abroad. Features of this scheme are:
- The scheme issues loans upto Rs.15 lakhs for studying in foreign countries.
- No collateral margin is required and the interest rates should not exceed the primary lending rates (PLR) for loans up to Rs. 4 lakhs. Above that limit the interest rate will not exceed PLR plus 1 percent.
- Repayment of loan should be done over a period of 5 to 7 years with provision of grace period of one year after completion of studies.
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