How to get Education Loan for Higher Education in Foreign Universities

More and more students are applying for courses in foreign universities. The costs of studying abroad has also been rising, leading to more student loan and scholarship applications. At the same time in order to help with funding higher education at a foreign university, there are more Indian and foreign government grants and scholarships available. There are scholarships for international students available in many countries.

Even if you manage to score a scholarship, it may not cover all your expenses. In that case, you may need to turn to an education loan to make up the remaining expenses. Education loans can seem a frightening prospect, but it need not be complicated. Just make sure to research your loan options carefully in the period after you have submitted all your SOPs and applications, and are anxiously waiting for an acceptance letter.

General Information about Education Loans

• You need a co-applicant in most cases. This co-signer can be a parent, a spouse or a sibling. The co-signer essentially signs the application, agreeing to pay the loan in your place if you should fail to do so.
• If your loan exceeds 7.5 lakhs, you may need to offer a collateral. This can be some documents of property in your name or an LIC policy, which will have to be offered to the bank.
• Each bank or lender has criteria on the basis of which they offer loans. Some banks, for instance, only offer loans for technical courses. They also tend to prefer long-term loans for premier institutions. Short-term courses such as English language courses or vocational courses at Australian TAFE universities are also typically not offered.
• You have to pay a sum of margin money to banks for loans exceeding 4 lakhs. This is typically around 15% of the loan amount.
• The loan is typically paid out by the bank directly to the educational institution and/or book or equipment vendors and suppliers.
• Education loans typically cover tuition fees, one-way/two-way travel expenses, cost of purchase of books, instruments, equipment, uniforms etc., examination, hostel, library charges, costs of study tours, project work, exchange programs, caution money, refundable charges etc.

Where to Apply

• Axis Bank is offering up to 20 lakhs at an annual rate of interest of about 15% to 17.50%.
• Credila (via HDFC Bank) offers loans up to 20 lakhs as well as tax benefits under Sec 80-E of the Income Tax Act. Interest rates are calculated based on the Benchmark Lending Rate of 12.10% annually.
• Bank of Baroda's Scholar loan scheme for technical or professional studies abroad offers up to 20 lakhs at 9.9% to 12.15%.
• ICICI Bank offers up to 20 lakhs at 11%.
• Canara Bank offers up to 20 lakhs at 15% per annum for loans above 4 lakhs. Loans less than that are interest-free.

Scholarships for overseas education

• Dr Manmohan Singh Scholarships
• Commonwealth Scholarship and Fellowship
• Inlaks Scholarship
• Hornby Scholarship to study in the UK
• Tata Scholarship for Cornell University
• USIEF Fulbright-Nehru Fellowships