A ready reckoner on Basics of Foreign Education Loan
In past decade, the number of Indian students opting for study abroad options has grown exponentially. There are many reasons for this including increased awareness and world view, exposure to available options via shrinking internet based world, better paying capacity of Indians and availability of student loans to facilitate better education abroad. Indian students have always been superlative in creating their space wherever they go and assimilating in international societies. Now with the right financial aid, the foreign education dream is not restricted to only financially well of section of society. Talking specifically of education loans, today, there are numerous lenders, banks and NBFCs, offering education loans to Indian students.
When applying for a study loan, following criteria is to be kept in mind:
These Education Loans Can Cover:
It basically varies from Bank to Bank and NBFC to NBFC , but there are some documents which form the basis of starting an education loan application process. This list is not a complete list but an indicative list.
Some Banks and NBFCs offering Education Loans Almost all nationalized, private,co-operative banks and NBFCs offer education loans. The terms of some of those are mentioned below however to get updated information please visit or talk directly to the representatives of these institutions.
State Bank of India SBI finances international higher education for job-oriented professional and technical graduate as well as postgraduate degree courses. Some examples of these courses are MBA, MCA, MS, diploma courses at reputed universities etc. The loan offered by SBI covers tuition fees, exam fee, lab fee, library fee, caution deposit, books and equipment cost, travel expenses etc.
Maximum loan amount – Rs. 30 lakhs
Collateral security required – For loans above Rs. 7.5 lakhs
Loan margin – 15% for SBI education loan borrowers
Repayment tenure – 1 year to 15 years
HDFC Bank
Maximum loan amount – Up to Rs. 20 lakhs
Processing fees – Up to 1.5% of the loan amount
Axis Bank
Maximum loan amount – Rs. 20 lakhs
Minimum loan amount – Rs. 50,000
Interest rate – Ranges from 16.5% to 17.5% with special rates for women
Loan margin – Not required for a loan below Rs. 4 lakhs. For loans above Rs. 4 lakhs, 15% has to be brought in by the borrower Axis Bank might also consider LIC policy for 100% of the loan amount but it depends from case to case.
Punjab National Bank
Maximum loan amount – PNB sanctions loans according to the requirement of the borrower,
Loan margin – 15% for loans above Rs. 4 lakhs. For loan amount below Rs. 4 lakhs, the loan margin is not required.
Moratorium period – Up to a year with no prepayment charges levied by the bank
Processing fees – 1%
The tenure options available for PNB education loan borrowers is up to 15 years
Bank of Baroda
Under the Baroda Scholar scheme, admission secured for professional and technical courses at reputed foreign universities are sanctioned for education loan.
Maximum loan amount – Up to Rs. 20 lakhs
Loan margin requirement – 15%
Repayment tenure – Loans taken up to Rs. 7.5 lakhs can be repaid within 10 years and loans above Rs. 7.5 lakhs can be repaid within 15 years Borrowers can get a holiday or moratorium period of six months to one year after getting employment. Security is not required for loans below the amount of Rs. 4 lakhs. Third party guarantee is required for loans between Rs. 4 lakhs and Rs. 7.5 lakhs and a tangible collateral security is required for loans above Rs. 7.5 lakhs.
Canara Bank The Canara Bank education loan covers university fee, travel costs,exam fee, lab fee, library fee, book/equipment fee, and other related expenses. Education loan has to be taken with a co-borrower and 100% collateral security is required for loans above Rs. 7.5 lakhs.
Maximum loan amount – Upto Rs. 20 Lakhs
Loan margin – 15% for loans taken above Rs. 4 lakhs
Repayment tenure – Can be up to 10 years for loans below Rs. 7.5 lakhs and up to 15 years for loans above Rs. 7.5 lakhs.
Security – Not required for loans below Rs. 4 lakhs. Third party guarantee has to be given for loans from Rs. 4 lakhs to Rs. 7.5 lakhs.
IDBI Bank The IDBI education loan covers university fee, travel, exam fee, lab fee, library fee, the cost of computers, book/equipment fee and other related expenses. IDBI Bank sanctions loan amount according to the requirement of the borrower, with no security on loans below Rs. 4 lakhs.
Maximum loan amount – Up to Rs. 20 lakhs
Repayment tenure – Up to 10 years for loans below Rs. 7.5 lakhs and up to 15 years for loans more than Rs. 7.5 lakhs
Third party guarantee is required for loans between Rs. 4 lakhs and Rs. 7.5 lakhs. Education loan has to be taken along with a co-borrower. 100% collateral security is required for loans more than Rs. 7.5 lakhs.
Apart from these banks, NBFCs like HDFC Cedilla and Avanse Financial Services also offer education loans for foreign studies. Students are advised to do due diligence at their end to get the updated information directly from concerning bank or NBFC and not rely 100% on the information mentioned here.
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