Types of Loan Providers for Study Abroad Loan
Student Loans for Studying Abroad: Types of Lenders & Financial Institutions
Coming from a middle-class family, it used to be nearly impossible for Indians to dream about studying overseas earlier. But now, Indians are among the top three sources of students going abroad for higher education. So, what has made this change? How can so many international universities around the world have large numbers of Indian students? The answer lies in the availability of student loans. With ample of options available, Indians can now not only dream of studying abroad but also take concrete steps to make it happen.
However, with so many details to consider, choosing the right loan can be confusing. To help you get closer to your dream of studying at an international university, let us find the best bank for education loans for abroad studies. We will break down the types of loans available and explain why taking an overseas education loan is important. This way, you can understand all the details easily and make an informed decision.
Importance of Taking an Overseas Education Loan
From Financial support to Tax benefits, there are a lot of ways in which an overseas education can help you achieve your goals. Here are some important reasons:
- Financial Support: Covers tuition fees, living expenses, travel, and other costs, easing the financial burden on your family.
- Accessible Quality Education: Enables you to access world-class education and top universities without worrying about immediate funds.
- Focus on Studies: With financial worries reduced, you can concentrate fully on your studies and make the most of your educational experience.
- Flexible Repayment Options: Many loans offer flexible repayment plans, allowing you to repay after you start earning.
- Building Credit History: Repaying an education loan on time helps build a good credit score, which is beneficial for future financial needs.
- Various Loan Schemes: Different banks and financial institutions offer various schemes tailored to students’ needs, making it easier to find a suitable option.
- Tax Benefits: Interest paid on education loans often qualifies for tax deductions, reducing the overall cost of the loan.
Having looked at how an overseas education loan is like having a powerful tool in your hand that brings your dream of studying abroad within reach. Let us look at the different types of student loans for studying abroad available for Indian students.
Types of Overseas Education Loans
The following are two important types of overseas education loans offered by all Indian financial institutions:
Secured Loans
Secured loans require you to provide collateral, such as property or fixed deposits, to secure the loan. This gives the lender a safety net, making it easier for you to get a loan with better terms and lower interest rates.
Features of Secured Loans:
- Lower Interest Rates
- Higher Loan Amounts
- Flexible Repayment Tenure
- Easier Approval Process
- Tax Benefits
Unsecured Loans
Unsecured loans do not require any collateral, making them a viable option for students who do not have assets to pledge. These loans are based on your creditworthiness and the reputation of the institution you are planning to attend.
Features of Unsecured Loans:
- No Collateral Required
- Faster Processing
- Higher Interest Rates
- Limited Loan Amounts
- Creditworthiness Dependent
By understanding these types of loans and their features, you can make an informed decision that best suits your needs and brings you closer to your dream of studying abroad.
Financial Institutions Offering Overseas Education Loans
When it comes to getting an education loan for studying abroad, there are four main categories of lenders in India: Here is a breakdown of each category along with some of the banks and institutions you can approach:
Public Sector Banks
Public sector banks are government-owned institutions that offer education loans with competitive interest rates and favorable terms. Some of the major public sector banks providing overseas education loans include:
- State Bank of India (SBI)
- Punjab National Bank (PNB)
- Bank of Baroda (BOB)
- Canara Bank
Union Bank of India
Private Sector Banks
Private sector banks are privately owned institutions known for their quick processing and flexible loan options. Here are some prominent private sector banks offering education loans for studying abroad:
- HDFC Bank
- ICICI Bank
- Axis Bank
- Kotak Mahindra Bank
- Yes Bank etc
Non-Banking Financial Companies (NBFCs)
NBFCs provide financial services similar to banks but with more flexible terms and quicker approval processes. They are a good option for students who may not qualify for traditional bank loans. Some leading NBFCs offering education loans are:
- Tata Capital
- HDFC Credila
- Avanse Financial Services
- InCred
- Auxilo etc
International Lenders
International lenders provide education loans specifically designed for students planning to study abroad. These loans often come with competitive interest rates and are tailored to the needs of international students. Some notable international lenders include:
- Prodigy Finance
- MPower Financing etc
It is important to understand that it is best if you take secured loans from Public or Private banks as they will charge you affordable interest rates while taking an unsecured education loan is best if taken by NBFCs or International lenders as the processing time is quick.
In conclusion, by exploring the types of overseas education loan options and the financial institutions offering them, you can decide on which bank you can apply for overseas education loans. However, a lot of factor needs to be considered such as the education loan interest rate for abroad study, Moratorium period, Loan sanction amount, Processing time, tax benefit, collateral requirements, and other related terms and conditions.
As all the banks and financial institution may have their own requirements, it is nearly impossible to cover every bank in a single article. So, it is advisable that you visit an overseas education consultant or financial advisor in your area who will guide you by making you understand what each loan has to offer. Under their financial guidance, you can save a large portion of your money which you can use further for your higher studies abroad.
About the Creator
Riya Niar
I am dedicated professional counselor at ELAN Overseas Education Loan, specializing in assisting students with obtaining the best study abroad loan options. With a passion for helping students achieve their dreams of studying abroad.
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