Studying abroad is a popular choice among students to pave the way for a great future. However, considering the huge costs associated with these candidates, they feel challenged to pay for their tuition fees, accommodation, etc. Studying abroad is a whole new different ball game as it is difficult to finance your education abroad. As a last resort for those who don't have any other option, education loans help in financing their studies. Which bank is best for education loans abroad? This is a common question among students as there are plenty of options available. In this article, we have covered several well-known education loan lenders, outlined their eligibility requirements, and provided useful tips to help improve your chances of loan approval.
An education loan is a big liability in a candidate's journey to study abroad. It is important for a candidate to consider several factors while applying for an education loan in a bank. Candidates have to look for any additional costs and hidden charges. Here are some factors that students should consider while applying for an education loan.
Interest rates are a key component to selecting a bank for your education loan. Your education loans involve huge amounts of money and higher interest rates can become a scary figure over time. So select banks with lower rates of interest.
Some banks offer flexible repayment options helping students focus on their studies without stressing themselves about the loan repayment. Check for the moratorium periods for each bank.
The maximum loan amount that can be availed varies between banks. Most banks offer loans up to 3 cr for studying abroad. The loan amount you are eligible for will be influenced by factors such as your chosen course, the university you plan to attend, and your financial situation.
Many banks charge a processing fee, which can vary between 0.5% to 1% of the loan amount. Some banks waive this fee during special promotions, so it's important to check whether the fee is applicable to you.
Eligibility criteria differ for each bank and it is important to check the eligibility criteria to avoid your loan rejection.
A bank with excellent customer service can make the loan application process smoother and more efficient. Look for banks that offer quick loan approvals and transparent communication throughout the process.
Interest rates for education loans are typically in the range of 9.0% to 13%, depending on the bank, the loan amount, and the applicant's profile. While some banks offer fixed interest rates, others offer floating rates that can change based on market fluctuations. Here are some top banks offering education loans for abroad studies:
The following table provides a detailed comparison of loan amounts, interest rates, loan tenure, and repayment options for secured and unsecured education loans from major banks:
| Bank Name | Secured Loan Amount | Unsecured Loan Amount | Secured Interest Rate | Unsecured Interest Rate | Secured Loan Tenure | Unsecured Loan Tenure | Repayment Options |
|---|---|---|---|---|---|---|---|
| ICICI Bank | Up to ₹3 Crore | Up to ₹1 Crore | 10.00% - 12.50% | 11.00% - 12.50% | Up to 10 years | Up to 10 years | Flexible EMI, moratorium available |
| BOB Bank | Up to ₹1.5 Crore | NA | 9.7% - 10.5% | NA | Up to 15 years | NA | Flexible EMI, moratorium available |
| IDFC Bank | Up to ₹1.5 Crore | Up to ₹62 Lakhs | 9.7% - 10.20% | 11.75% - 13.25% | Up to 15 years | Up to 12 years | Flexible EMI, moratorium available |
| AVANSE | ₹1 Crore | Up to ₹40 Lakhs | 10.5% - 11% | 12% - 13.25% | 10 years | 12 to 15 years | Flexible EMI, moratorium available |
| INCRED | NA | Up to ₹50 Lakhs | NA | 11.65% - 13.5% | 12 to 15 years | 12 to 15 years | Flexible EMI, moratorium available |
| AUXILO | 70% of valuation | Up to ₹40 Lakhs | 11% - 13% | 12% - 13.25% | 12 to 15 years | 12 to 15 years | Flexible EMI, moratorium available |
| HDFC Credila | ₹1 Crore | Up to ₹40 Lakhs | 10% - 10.5% | 12% - 12.5% | 12 to 15 years | 12 to 15 years | Flexible EMI, moratorium available |
| IDBI Bank | Up to ₹1.5 Crore | NA | 9.6% - 10.6% | NA | Up to 15 years | NA | Flexible EMI, moratorium available |
| State Bank of India (SBI) | Up to ₹1.5 Crore | NA | 10.15% - 11.15% | NA | Up to 15 years | NA | Flexible EMI, moratorium available |
Banks in India set specific eligibility criteria for education loans, and these criteria can vary depending on the institution, country, course, and the applicant's financial background. While most banks follow similar basic guidelines, there are often differences in the eligibility conditions.
The following general requirements are common across banks:
The student must be an Indian citizen.
The age of the student must typically be between 18 and 35 years.
Most banks require the student to have secured admission in a recognized institution, with a valid offer letter or admission confirmation.
A co-applicant, typically a parent or guardian, is required. The co-applicant's financial stability will also be considered for the loan approval process.
Banks assess the co-applicant's income and credit score to determine the loan amount.
Financial institutions offer various other attractive benefits and students are also advised to look for those benefits while applying for an education loan. Here are some benefits that you'll get based on the bank:
Few banks offer lower interest rates for students securing admission to top-ranked universities.
Many banks waive the processing fee for education loans, which can be up to 1% of the loan amount in some cases. This can make a significant difference in the total cost of the loan.
It is advised to check for banks with no prepayment penalty for prepaying the loan amount before the specified time.
In case of an unforeseen increase in course-related expenses, some banks provide a top-up loan facility, which can be availed without the need for re-application.
Many banks offer insurance policies that cover loan repayments in case of unforeseen circumstances, such as the co-applicant's death or disability, which can safeguard the family's financial well-being.
To enhance convenience, several banks offer online portals where students can apply for loans, track their loan status, and manage repayments.
Some banks allow students to choose from different repayment options like a step-up EMI, which starts low and increases over time, or a part-time repayment plan during the course of study.
Applying for an education loan involves several steps, and students must prepare well in advance to ensure a smooth process. Here is a guide to applying for an education loan with your preferred bank both online and offline.
| Section | Online Process | Offline Process |
|---|---|---|
| Choosing a Bank | Visit the bank's official website | Visit the bank branch |
| Loan Application | Access the specific education loan page. Upload required documents | Ask for an application form. Fill in all the particulars with the required details. |
| Submit | Submit the consent form after filling in all the details | Confirm loan terms and submit the application form to the concerned authority |
| Approval | Choose a doorstep or a formal visit to the bank for your loan approval process | Receive an authorized loan agreement once approved |
| Details | Ensure all uploaded details are accurate | Verify details with bank officials |
Choosing the right bank for an education loan is a crucial step in ensuring a smooth and financially secure study abroad experience. Factors such as interest rates, loan coverage, repayment options, and eligibility criteria should be carefully considered when comparing different banks. Additionally, students should take advantage of any additional benefits or features offered by the bank, such as interest rate concessions, processing fee waivers, and flexible repayment plans. By researching all these aspects and understanding their implications, students can select the most suitable education loan option, ensuring that they are financially prepared to pursue their international educational aspirations without undue stress.
Yes, many financial institutions like banks and NBFCs offer 100% loan coverage.
HDFC education loan interest rates generally range from 10% to 13% based on your loan type and creditworthiness.
Yes, banks offer education loans for abroad studies up to 3 cr.
HDFC Credila is a private bank established in 2006.
Yes, banks offer Non-Collateral Education Loans for Abroad to finance the candidate's study abroad dream.
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