Guide to Student Loans for Studying Abroad

Studying abroad has the potential to completely transform your life. This, however, is a difficult task. Those who want to pursue higher education overseas but can’t afford it can now apply for education aid. Over the years, student loans have enabled many hopefuls to pursue their aspirations of studying overseas. With a simple education loan, you may now get a good education at a top international university.

Here are some of the benefits of taking out an education loan:

1. Competitive Interest rates

2. Interest paid is tax-deductible under Section 80E of the Income Tax Act of India, 1961.

3. Pre-approval prior to admittance confirmation

4. Financing of up to 100%

5. Fill out an online application

6. Door-to-door delivery

Students can use international education loans to pay for post-secondary education in India or abroad. Equipment purchases, lodging rates, and other course-related expenses are among the various expenses that a loan can pay. Various education loan lenders take airfare into account when students study abroad.

What factors should you consider when looking for school loans to study abroad?

Education loans are crucial in the lives of students who want to attend a prestigious university but lack the financial resources to do so. Parents can now send their children overseas for further education more easily because of education loans. Education loans have become increasingly popular due to longer moratorium periods, low-interest rates, and flexible repayment arrangements.

Various financial institutions and banks in India provide financial assistance to students pursuing higher education in India and abroad. Every lender, however, offers a unique combination of services and features. Processing fees, interest rates, payback terms, moratorium periods, repayment tenures, and tax benefits are only a few of the conditions that differ from one bank to the next. Before settling on a certain loan provider, one should think about the following factors:

1. Tax benefits

Under Section 80E of the Income Tax Act of 1961, education loans taken from overseas financial institutions and Indian banks are eligible for tax deductions on loan interest. Tax deductions are available for an eight-year period, beginning with the year the loan was taken and ending with the year the loan was paid off in full, or until the interest on the loan is paid off totally, whichever comes first.

2. Rate of interest

The interest rate is the most important factor to consider when choosing a reputable college or bank for an education loan because even a minor difference can result in significant savings. Learn the difference between floating and fixed interest rates, compare the rates offered by various institutions and banks, and choose the most cost-effective alternative.

3. Costs covered

The overall amount disbursed is determined by a variety of factors, including the university’s reputation, academic background, application history, co-applicant, and others. While some banks cover the entire cost of schooling, others merely cover a portion of it. Be careful to inquire about the charges that are paid by your loan provider. Lab fees, tuition fees, equipment fees, test fees, library fees, and personal expenditures may all be paid.

4. Documents and eligibility

When it comes to determining loan eligibility, most financial institutions and banks follow a set of rules. Creditworthiness, academic history, family income, co-applicant information, and other factors are all considered during the application process. The loan amount given for study abroad is also determined by the nature of the course and the likelihood of finding work after graduation.

It’s also a good idea to compile a list of required documents for a loan so that the process doesn’t take a long time. Various institutions and banks typically require a copy of previous educational qualifications’ mark sheets, proof of address, proof of co-applicants income, passport-size photographs, and other documents. While some institutions require a letter of confirmation of admission, others grant loans without one.

5. Prepayment terms

The sooner you pay off your loan, the more money you’ll save on interest on the principal. Inquire about any possible prepayment penalty. As a result, a plan for finding work and repaying the debt as quickly as feasible might be devised.

6. Moratorium extension

A moratorium is a period of time given by financial institutions and banks after a course is completed, ranging from six months to a year before prepayment begins. This is due to the fact that students require time to find work and establish financial security before repaying their university loans. Due to employment insecurity or unanticipated financial requirements, it may be necessary to extend the duration in some situations. Get all of the information you need regarding these fees and policies.

7. Total cost over EMI

An education loan is repaid in equal monthly installments over the loan’s term. Some consumers want a longer loan term in order to lower their monthly payments. While this may appear to be a good deal in the near term, the total loan cost will continue to rise each year. Find a lender who will provide you with the best interest rate while also making your studies easier.

8. Loan processing time

In order to apply to a university overseas, you must meet the deadline. When applying for a visa and admission, you must have a loan sanction letter as a financial resource. Make sure to inquire about the lender’s loan disbursement processing timeframe.

9. Service charge

When applying for an education loan, there are a number of fees that must be paid in addition to the loan amount. Costs for moratorium extensions, loan processing fees, and prepayment charges are just a few examples. Before you apply, inquire about all of these fees so that you are not surprised later.

Education loans for higher education overseas are available from a variety of financial institutions and banks, with each lender offering a unique set of benefits and services. Comparing and analyzing several items is recommended in order to locate the one that best meets your demands and specifications.

Expenses for studying abroad covered by the loan

A study abroad education loan can only be used for educational reasons. Depending on the bank, the rules may differ. Study abroad loans, on the other hand, typically cover the following expenses.

• Admission, tuition, and examination fees
• Books, stationery, and equipment are just a few of the things you’ll need (computers, etc.)
• Airfare to attend the college in another country
• The price of a hostel or boarding house
• If the student chooses, he or she will be charged an insurance premium.
• Additional expenses such as study visits, research, and so on.