Overseas Education Loans Deciphered

Education from a top foreign university certainly strengthens a student’s profile. Additionally, exposure to varied culture positively impacts the personality. However, in most of the cases, the student needs a loan to pay the course fees, living expenses and allied costs. In a country like India, 65% of whose population is below the age of 35, the demand for education loans is on the rise with a large number of students opting for a foreign education loan.

However, the entire process of getting an overseas education loan is hardly straightforward. We have tried to explain in detail, the various aspects involved.

Firstly, having scholarships or tuition waivers do not mean that you don’t need a loan. A significant amount of cash is spent in living expenses which include; food, accommodation and travel.

Some factors to be taken into account before applying for a foreign education loan are:

1.     The course fee and Scholarship granted: The loan amount is decided depending on the course fee for the applied university, which may be significant for Indian nationals, and the scholarship/waiver granted.

2.     Living expenses vary from country to country as do currency exchange rates and hence the choice of country is very important as far as foreign education loans are concerned.

3.     Rate of Interest: Rates of interest vary across lender institutions and can also change on a case-to-case basis. More info on these types of institutions is given below.

Institutions providing education loan for higher studies abroad

1.     Nationalized banks

2.     Private banks

3.     Non-Banking Financial Companies (NBFCs)

Nationalized banks provide education loans, generally at a lower rate of interest than the other two categories but the documentation required to be submitted is stringent.

Private banks provide a greater degree of flexibility as far as documentation and institution applied is concerned. The rate of interest tends to be higher with them. NBFCs provide a greater degree of flexibility than the previous two categories.

Depending on availability of collateral, there are two types of loans: 

Secured overseas education loans: In this case the borrower places his asset/s as collateral. Perks of these kind of loans are; lower rates of interest and higher borrowing limits.

Unsecured overseas education loans: These loans don’t involve a collateral to be placed with the lender. Grant of such loans depends upon creditworthiness of the borrower.

Points of Caution

Choosing a lender institution is not a simple task. Visa regulations vary across countries and the type of loan, the lender institution and collateral documents are all considered before visa approval. Did you know that Australian visa requirements demand only a secured loan from a nationalized bank?

The visa regulations of certain countries also place restrictions on the minimum income level of the parents of the applicant.

Apart from all these, certain countries demand disbursement of loan amount before grant of visa. The amount that needs to be shown also varies across countries. Some may ask for amount equal to 1 semester of tuition fees. Others even ask for amounts covering living expense to be disbursed before visa is granted.

A student going abroad for the first time cannot hope to apply independently for loans and get it all right before intake. In fact, there are certain details that may be unknown to the lender agent, like details in documentation, which may lead to visa rejection at the last. 

Hence, it becomes paramount for a student to approach competent organizations which already have an expertise with these details.

Elan Overseas Education Loans, a partner organization to Krishna Consultants simplifies the entire process from loan application to amount disbursement for the applicant. Agents with Elan are experienced at dealing in international education loan process and well-versed with visa regulations. Tie-ups with reputed partners ensures that loan disbursement is done at the quickest, before visa is granted, if required. Also, the best interest rates and offerings are provided depending on student profile. Elan offers the best deal.