Studying abroad may be a life-changing decision; and this does not come easy. Those who wish to pursue higher studies outside the country, but find it hard to arrange for immediate funds, now have the option of making arrangements for funding their education. In this article, we’ll cover all relevant details related to education loans for pursuing studies abroad.
What Are the Documents Required to Avail of A Study Loan?
The following documents are typically required to be submitted with an education loan application form:
- Income statements (Pay slips, income-tax returns of the last two years, Form 16, and income computation of last two years and certified by a Chartered Accountant)
- Bank statements/Pass book copy of the last six months
- Copy of the admission letter of the Institute along with the ‘fee schedule’
- Mark sheets and/or pass certificates of HSC, SSC, Degree Courses, National-level entrance examinations
- Age proof (Passport, Aadhaar, birth certificate, PAN, driving license)
- Address proof and photo identification proofs (Voter ID card, PAN card, Aadhaar, passport, and driving license)
- Passport size photographs of the applicant as well as the co-applicants
- Guarantor’s form (optional)
Who Can Apply for an Education Loan in India?
The eligibility criteria for an education loan in India may vary from one lender to another. It makes it easy to avail it if you are choosing a loan against property where a property works as a collateral. the However, some of the common criteria are as follows:
- The applicant as well as the co-applicant must be over 18 years of age and citizens of India
- The applicant must have secured at least 50% marks during his/her HSC as well as graduation
- Secured admission in the country or abroad from a recognized and reputed college/institution via entrance tests/merit-based selection procedures after completing 10+2, is mandatory
- The co-applicant, i.e., a parent or guardian, must have a regular and steady income source
What is the Process for Getting an Education Loan for Studying Abroad?
From making education loan application to approval and disbursement, the entire education loan process is time consuming, so it is advisable to apply for a loan early on. We recommend following these steps when applying for an education loan:
- The applicant needs to check the course in which they are going to study and if it is going to be recognized by the financial institution.
- The applicant has to figure out how much loan they require, the amount to be precise, and how much they are going to arrange on their own.
- The applicant must also compare the education loan provided by different financial institutions to study abroad and go for the one that caters best to the applicant’s needs.
- On finalizing the financial institution and the loan amount, the applicant has to fill out the education loan application form and approach the chosen financial institution.
- As soon as the loan is approved, the bank is going to issue an education loan document that includes several elements of the availed of loan.
- On signing the education loan document, the financial institution disburse the amount in installments or as requested by the university.
FAQ on education loan in India
Some of the frequently asked questions on education loans are as follows
What is the role of a parent/guardian in an education loan?
The parent(s) or guardian of a student would be treated as the co-applicant of the student. Their role would be like that of the primary debtor.
What is the maximum amount of education loans that can be availed of for education in our country?
When applying for an education loan in India, some financial institutions can let you avail maximum of Rs. 40 lakhs toward an unsecured loan, whereas a secured loan sets no upper limit. However, the amount varies from one bank to another. So, it is always a good idea to check with the lender first.
What is the education loan calculator?
The EMI of loan comprises the principal and the interest. The education loan EMI, usually, remains fixed for the entire tenor of education loan, and it is to be repaid over the tenor of the loan monthly. In the initial years of your loan tenor, one has to pay more toward the loan interest, and, as the applicant repays the loan, a higher portion is adjusted toward the loan principal component.
An education loan calculator comes in handy. It helps calculate the amount that is payable at the tenor’s end. A user can simply adjust the sliders for the loan amount, interest rate, and tenor and get an accurate estimated EMI. This will also help the education loan borrower plan his/her finances better.
Loan Against Collateral 