Education Loans for Studying Abroad

Advantages of Education Loan

There are times when a family might not have enough money to pay for a student’s education. In those situations, you can ask a bank or another financial company for a student loan. This loan can help you pay for all or some of your education costs. If you get a student loan for studying abroad, you can finish your degree without money troubles.

Loans are often thought of as “bad debt.” This means you’re borrowing money for something that might not be worth as much in the future. However, an education loan is different. It’s like an investment in you. With your education, you’ll be able to make a lot more money than what you borrowed in the first place.

Eligibility Criteria for Education Loan

The first thing you need to do is check if you can apply for an education loan. Below are the general terms and conditions that most banks follow when giving out education loans. Remember, each bank might have its own rules that you need to follow when you apply to them.

• • You must be an Indian citizen.
  • If you’re under 18, your parents will have to take the loan.
  • You should have a good academic record.
  • You must have been accepted into a well-known university or college abroad.
  • Banks usually prefer courses that are more likely to lead to a job, like technical or professional courses.
  • Underwriting norms are the rules that loan providers follow to make sure they only give out safe loans. These norms also decide whether to give someone a loan for studying abroad, how much money they can get, and what the interest rate will be.

Required Documents for Study Abroad Education Loan

Before you apply for an education loan, it’s important to know what documents you’ll need. Here is a list of documents required for applying for a study loan for education abroad:

• • Filled application form
  • Photographs: Passport-size photos of you and the co-applicant.
  • Photo ID: Your ID, like a PAN card, driver’s license, Voter ID card, Aadhar Card, or Passport.
  • Residence proof: Proof of your residence and the co-applicant’s.
  • Academic documents:

1. 1. 1. Your academic mark sheets and certificates.
      2. Scores from tests like GRE, GMAT, TOEFL, IELTS, or others, if applicable. (Your academic standing and professional experience, along with test scores, are important for the loan application.)

• • Admission proof: Letter from the university or college confirming your admission.
  • Bank statements: co-applicant’s bank statements from the last six months.
  • Income proof: Documentation proving the co-applicant’s income. (Your co-applicant’s financial situation, location, and assets are considered for the loan.)
  • If you’re providing collateral (like a property), you’ll need:

1. 1. 1. Property title deed
      2. Approved building plan
      3. NOC from the builder or society for a mortgage.

Here are the documents required for both the applicant and co-applicant in a bulleted format:

For the Applicant:

• • Date of Birth: Birth Certificate, Passport, Voter card with DOB, College Passing Certificate, PAN Card, Driving license, Aadhaar Card
  • Residence Proof (if owned): In the form of a title deed (with the flat number), electricity bill, municipal tax receipt, or share certificate.
  • Residence Proof (for a rented property): utility bills and a registered rent agreement; bank statement; passport, driver’s license, voter ID, and Aadhar card; landline phone bill; post-paid mobile bill; and bank statement.
  • Aadhaar: Aadhaar card
  • PAN Card: A copy of PAN or Form 60 if PAN is unavailable.
  • Signature: Verify that your signature on your bank account, passport, driver’s license, and PAN card match your current signature.
  • Relationship proof: Passport, PAN, Aadhaar card, Marriage certificate, Birth certificate, Legal heir certificate, Ration card, or any other valid documents.
  • Academic documents: 10th,12th, UG or PG mark sheets, degree or provisional degree certificate, applicable entrance test scores, Registration certificates for Professionals (CA, Doctor)
  • Income proof – Salaried: Documents to establish 3 years of work experience wherever applicable and available.
  • Office Address: NA
  • Admission proof: Invitation/admission letter from the college or university with the fee structure.

For the Co-applicant:

• • Academic documents: Registration certificates for Professionals (CA, Doctor)
  • Income proof – Salaried: Latest 3 salary slips, Bank Statement of last 3 months, Form 16
  • Income proof – Self-employed: 2 years ITR with the statement of income, Income certificate from Tehsil/collector’s office
  • Office Address: Form 16/ Salary slip/ Letter from HR/ Snapshot of site/Identity card

Make sure you have all the necessary documents from this list before applying for the education loan.

Technical Documents:

• • Title deed (all the pages to be attached)
  • Copy of approved layout plan and permissions (if applicable to the case)
  • Revenue document (Khata / Patta)
  • BDA ALLOTMENT – NOC AND ALLOTMENT LETTER
  • Non-Encumbrance certificate
  • Possession Certificate (if the flat is taken from a builder)
  • Latest Property tax receipt
  • Copy of prior sale deeds
  • Conversion certificate
  • Urban clearance certificate (if required)

Legal Documents:

• • Sale/gift/partition deed in favor of the customer – Minimum 13 years
  • Khata Certificate and extract in the name of the present owner
  • Encumbrance certificate – At least 13 years old, representing all sales.
  • Latest Property tax receipt

Note that these requirements might differ based on the regulations of the respective banks. It’s essential to consult the specific requirements of the bank you are dealing with to ensure you have the correct documentation.

Interest Rates for Education Loans Offered by Various Banks

Here are the interest rates of various prominent banks in India for study-abroad education loans:

• • HDFC Credila Education Loan: 9-14%
  • ICICI: 9.86% onwards
  • SBI: 2% above EBR (Current EBR is 9.75%)
  • Axis Bank: 13.70% to 15.20%
  • Punjab National Bank: 9.25% to 11.25%
  • Bank of Baroda (Baroda Scholar): 9.70% to 11.15%
  • Allahabad Bank: 12.50%
  • Indian Bank: 8.85% to 10.75%
  • Union Bank of India: 8.70% and above

Make sure to consider these rates and choose the bank that best suits your financial needs and requirements.

How to Apply for an Education Loan?

The process of getting a student loan takes time, so it’s best to apply early. Here’s how you can apply for a student loan:

1. 1. Make sure the bank approves the course you want to study.
   2. Figure out how much money you need and how much you can arrange on your own.
   3. Compare different student loans from various banks and choose the one that works best for you.
   4. Once you decide on the bank and loan amount, fill out the loan application form and go to your bank.
   5. When your loan gets approved, the bank will give you a document that explains all the details of the loan.
   6. After you sign the document, the bank will give you the money in parts, or as your university needs it.