An overview of Overseas Education Loan Process

Aiming for Higher Studies Overseas? Do you require an Overseas Education Loan?
Then this article will surely help you.
Over the years, education loans have become the most reliable source of funding higher education overseas. There has been an exponential rise in the number of Indian students opting for studies abroad in the past two decades despite its heavy cost. Thanks to the availability of education loans for abroad studies which ease out the burden.
There are numerous advantages of taking overseas Education Loans like,
•    100% Funding
•    Pre-admission Loan
•    Income Tax Benefits
And many more……

The overseas education loan requirements are:
•    Credit Score
•    Documents Checklist based on the University
•    Students Document Checklist
•    Parent’s/Sponsor’s Documents Checklist
•    Collateral Security Documents Checklist
There are innumerable banks and other financial institutions in the market offering education loan. Many parents are not aware about the country-specific financial requirements nor which financial institutions to approach. It is not very easy to decide which financial institute is a better option as there are minute differences in each of them. There are multiple factors to be considered.

Level of Study and Program:
Banks generally sanction loans for Bachelor’s, Master’s, PG-Diploma and Ph.D., though they do not give loans that easily for UG-Diploma and Certificate Programs. These decisions are solely banks’ and varies bank to bank.

Rate of Interest:
The ROI for overseas education loan varies in a range of 9% to 14% depending on the type of financial institution. The Nationalised Banks, Private Banks and NBFCs are the different type of Financial Institutions you can approach for loans.

Margin Money:
Margin money is the amount that has to be paid from your funds while the rest is paid by banks. Nationalised banks and Private banks expect a money margin of 10% to 30% whereas, NBFCs give complete 100% overseas education loan.

Expenses that are covered:
The expenses covered in Education Loans are generally same, but few of which depends upon the type of financial institution you have chosen.

Benefits on Income Tax:
If you opt for an Education Loan, then the borrower gets the tax benefit yearly, if you pay the monthly simple interest during the moratorium period.

Loan Disbursement:
The release of funds from Education loan amount is known as Loan Disbursement. It is sanctioned in single or multiple instalments depending upon the demand raised by University, college or institution you have got admission in.

Loan Repayment Tenure:
For an Education Loan, the minimum repayment tenure ranges from 10 to 15 years for a loan amount above 7.5 lakhs, thus making it comfortable for the borrower to repay the amount.

Processing Fees:
Banks charge a stipulated amount from the loan borrower as a processing fee. There is a negligible processing fee for an Education Loan which again depends upon the type of the financial institution.
Financial Institution to Finalise
After understanding all the decisive factors before taking an overseas education loan, you can choose the financial institutions based on mainly,
•    Loan amount
•    Interest Rate
•    Margin Money
•    Loan type

Is the whole process of education loan and its requirement clear now?
If you still have a doubt it is recommended to consult an Overseas Education Loan Advisor to find more Funding Options For Overseas Education Loan and be assured of choosing the right financial institution and to avail the essential amount of loan with lower rate of interest. The entire process would be well explained and be facilitated by the loan advisor. This becomes a great support in relieving the financial stress.

Related URL:
How to Choose the Best Bank for Overseas Education Loan?

Why is CIBIL Score Important for an Overseas Education Loan?