Complete Guide to Loans for Overseas Study
How to Apply for Education Loans for Studying Abroad: Process and Tips
As an Indian student with dreams of pursuing a bachelor’s or master’s program abroad, you are likely to be excited about the opportunities that lie ahead. However, the cost of education can be a major hurdle. You may be wondering how to fund your studies and cover your living costs. This is where loans for overseas study come in.
Understanding educational loans for studies abroad
To begin with, let’s familiarise ourselves with the concept of loans for overseas study. Educational loans are designed to provide financial assistance to students who wish to pursue their bachelor’s or master’s education abroad. This financial assistance covers tuition fees, living expenses, travel costs and related expenses. Unlike other types of loans, educational loans usually come with lower interest rates and flexible repayment options. This makes them an attractive option for students.
What makes you eligible for loans for overseas study?
While specific requirements may vary from lender to lender, here are some common factors that determine eligibility for an education loan abroad:
- Indian Citizenship.
- Admission to recognised institutions overseas.
- A good academic track record.
- Course and program validity.
- Age limit (generally set between 16 to 35 years).
- Co-signer / Co-applicant
- Collateral/ Property for secured loans only.
Whether it’s a bachelor’s or master’s course, when it comes to education loans for abroad studies, you should be familiar with secured and unsecured loans. Secured student loans need collateral to serve as a guarantee for the lender. Interest rates for secured education loans are generally lower and their repayment tenures are usually longer.
Unsecured loans or no-collateral loans do not need any collateral and provide an opportunity for students who don’t have any assets to secure funding for their studies. These loans are typically based on:
- the academic performance of the students,
- their creditworthiness of the co-applicant,
- their future earning potential and
- the credibility of the educational institutions they plan to attend.
What is a Co-applicant / Guarantor?
A co-applicant is an individual who submits the loan application jointly with the primary borrower. The co-applicant has equal responsibility for repaying the loan. So the financials of the co-applicant are one of the most import aspects in an unsecured loan
Can I have multiple / more than one co-applicant?
Yes, if a single co-applicant does not qualify for the amount of loan you need or in other words, one co-applicants earnings are not enough to get you the loan you need, you can add multiple co-applicants to make your application stronger.
Who can become a co-applicant / Guarantor?
Any of your first blood relatives like- Parents, Siblings, Uncles, Aunts, Spouses, or Grandparents can become your co-applicant.
Who can not become a co-applicant / Guarantor?
Friends, Cousins, neighbours other relatives, and everybody who does not come under the above definition can not become co-applicant
Interest rates for Unsecured Loans/loans without security are typically higher than those for secured loans and their repayment tenures are relatively shorter. Unsecured loans offer several advantages over secured loans, including the ability to obtain a loan without putting up collateral, a faster approval process due to the absence of asset evaluation, and a better option for borrowing smaller amounts.
Additionally, educational loans offer tax benefits under Section 80E of the Income Tax Act, including the ability to claim a tax deduction on the interest payment made on the loan.
Which financial institutions offer loans for overseas study?
When it comes to offering educational loans for overseas studies, a number of financial institutions in India provide attractive options. The three major categories of lenders who provide student loans are as follows:
| Name of the lender | Popular banks/institutions | Starting interest rates for secured loans | Starting interest rates for unsecured loans |
| Public Sector Undertakings (PSU Banks) | fff;">State Bank of India, Canara Bank, Punjab National Bank | <td style=“background-color:||
| Private Banks | <td style=“background-color:|||
| Non-Bank Financial Companies(NBFCs) | <td style=“background-color:
How to choose the right student loan for study abroad?
It’s important to consider the various loans for overseas study that are available. Here are some key factors you need to consider while deciding on your loan:
- Explore various student loan options from the Niyo app’s Student Section https://niyo.me/education_loan, You can apply for 3 types of loans @ 16 banks like HDFC, SBI, MPower, Prodigy with a single application in the Niyo app and get the loan approved in a short time at best interest rates.
- Compare the maximum loan amounts offered by different lenders and their processing time.
- Evaluate different interest rates offered by the lenders for loans for overseas study.
- Repayment terms, EMI calculation, tenure of the loan and flexibility in repayment.
- Additional benefits like prepayment options, grace and moratorium periods, loan deferment options and insurance coverage.
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- Fill out the loan application form carefully, seeking professional assistance if required.
- Attach all necessary documents as per the lender’s specifications.
- Review the application form thoroughly to ensure accuracy and completeness. Application errors may result in delays or rejections.
- Follow up and keep track of your application’s status.
After evaluating your application, the lender will decide whether to approve your loan request. Once approved, the funds will be disbursed directly to your university or credited to your bank account as per the terms agreed upon. With careful planning and responsible financial management, you can make your dreams of studying abroad a reality. Good Luck!
As an extra service to meet the demands of students, Niyo helps you apply for student loans online, quickly and conveniently from the comfort of your home, all while saving you money on interest rates. To get started on this exciting journey, please go to the following link: https://niyo.me/education_loan. Once you click submit, our committed loan counsellor will contact you right away. With this single application, you’ll be able to apply for your loan to multiple banks. You’ll get an offer in no time, you can compare offers and choose the best one for you. And the best part? There are no hidden fees for this service.
Consider downloading a reliable app like Niyo for the efficient planning and management of your finances. Download the Niyo app today!
