Quality education is necessary to fulfil academic and career goals. With the rising cost of education, many deserving students find it extremely difficult to achieve their academic endeavours. Also, students these days prefer to finance their education independently without depending upon their parents. In such situations, an education loan for studying abroad acts as a saviour for them which assists them with the necessary funds. 

To put it simply, an education loan is a prudent choice that assists you in financing your education whether you choose to study in India or abroad. It covers the tuition fees, cost of living, study material costs and other educational expenses. Although many reputed financial institutions offer a student loan in India, students must conduct thorough research to know the multiple aspects before applying for an education loan. 

Types of education loans for abroad education

Two types of education loans are available based on collateral. These are:

Secured Loan: A secured loan is the one in which an applicant deposits intangible or tangible security as collateral to the lenders. The pledged security can be in the form of fixed deposits, immovable property, bonds and shares. The lenders verify all documents submitted by the borrower before granting the study loan for abroad education.

Unsecured Loan: These loans are unsecured as the borrower does not pledge any collateral. Availing an unsecured loan is the best option when applicants have nothing to pledge as security to lenders. 

Important Note: A co-applicant is a must if you want to apply for an education loan. A co-applicant is a person who repays the education loan in case the main applicant fails to repay it due to any unexpected situations.

Education Loan – Eligibility criteria

An applicant needs to meet the following eligibility criteria to get an education loan in India :

• The student should be an Indian citizen with good academic background.
• The student must be 18 years of age.
• The student must have obtained admission to a recognised international university or college.

Important documents to submit to avail study loan for abroad 

An applicant needs to submit relevant documents while applying for an education loan. Some of the important documents are enlisted below:

• Passport-size photographs of applicant and co-applicant
• Filled application form
• Photo ID of applicant and co-applicant. The acceptable photo ID proofs are PAN card, Voter ID card, driving license, passport and Aadhar Card.
• Residence proof of applicant and co-applicant
• Academic documents like mark sheet and certificates of applicant. If applicable, submit the entrance exam scores for GRE, GMAT, IELTS and TOEFL.
• Admission proof (University admission confirmation letter).
• Income proof of the co-applicant.

Procedure to follow 

It is advisable to apply for a study loan in India well in advance as it involves a series of steps right from filling out a loan application, verification, and approval to disbursement. Follow the below-mentioned procedure to apply for a study loan:

• The foremost important step is to check whether or not the lender recognises your preferred course.
• Consider tuition fees, accommodation costs and other education-related expenses for finding a rough estimate of the amount you want to borrow.
• Finalise the lender after weighing factors such as benefits offered and customer service.
• Approach the selected lender to fill out the loan application form.
• The lender will sanction the loan if you meet the preset criteria and issue a loan document.

Things to check while taking a student loan

1. Moratorium Period: The moratorium period is the period during which the borrower does not make any repayment to the lender. This period varies from one financial institution to another. However, at Avanse Financial Services, we encourage our students to pay a small amount in the form of simple interest or partial interest as the interest will start to accrue soon after taking an education loan. Also, this instils financially prudent habits among the students.
2. Repayment period: The maximum repayment period of the education loan for studying abroad varies from one financial institution to another. Depending on your preference, you can decide the tenure. But please do not forget to estimate your EMI using the Education Loan EMI calculator.

At Avanse Financial Services, we strive to make the education loan process seamless for you. To know whether you are eligible to apply for an education loan for studying abroad, contact us today.