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lorien1208 · 2 months ago

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Know About Study Abroad Loans

Studying abroad can be a life-changing experience, but financing that education often poses a significant challenge for many students. While some may consider liquidating their savings to fund their studies, education loans provide an alternative that can make this dream more attainable. This article will explore everything you need to know about study abroad loans, including their types, application processes, and common mistakes to avoid.

Loans vs. Liquidating Your Savings

When considering how to finance your studies abroad, you might weigh the pros and cons of taking out a loan versus dipping into your savings.

Loans: Education loans allow you to maintain your savings for emergencies or future investments. They provide the financial flexibility to cover not just tuition, but also living expenses, travel, and other costs associated with studying abroad.

Liquidating Savings: While using savings can seem straightforward, it may deplete your financial cushion and limit your future financial security. It also means missing out on potential interest earnings on those savings.

Types of Education Loans

When it comes to funding your education abroad, there are primarily two types of loans: secured and unsecured.

Secured Loans

Secured loans require collateral, typically in the form of property or investments. This type of loan often comes with lower interest rates because the lender has less risk. However, if you default on the loan, the lender has the right to seize the collateral.

Unsecured Loans

Unsecured loans do not require collateral, making them more accessible but often accompanied by higher interest rates. The approval process may also consider your credit history and income potential post-graduation.

Study Abroad Loans

Study abroad loans are specifically designed to assist students pursuing education outside their home country. These loans can cover a range of expenses, including:

Tuition fees

Living expenses

Travel costs

Books and supplies

Application Process

The application process for a study abroad loan typically involves the following steps:

Research Lenders: Compare different banks and financial institutions offering study abroad loans.

Gather Documentation: Prepare necessary documents, including proof of admission, financial statements, and identification.

Submit the Application: Fill out the application form and submit it along with the required documents.

Await Approval: The lender will review your application and inform you of the approval status.

Receive Funds: Once approved, the funds will be disbursed, often directly to the educational institution.

Banks Offering Study Abroad Loans

Several banks and financial institutions offer study abroad loans, each with its unique features and benefits. Some popular options include:

SBI (State Bank of India)

HDFC Bank

Axis Bank

ICICI Bank

Bank of Baroda

Always compare interest rates, repayment terms, and eligibility criteria before making a decision.

Mistakes to Avoid While Applying for a Study Abroad Loan

Securing a study abroad loan is a significant financial commitment. Here are common mistakes to avoid:

Inadequate Research

Many students rush into loan applications without thoroughly researching their options. Take the time to compare interest rates, loan amounts, and repayment terms to find the best deal.

Ignoring Eligibility Criteria

Every lender has specific eligibility requirements. Ignoring these can lead to wasted time and effort. Check your credit score, income requirements, and any necessary co-signer requirements.

Overlooking Hidden Costs

Interest rates aren't the only costs associated with loans. Be sure to understand processing fees, insurance, and any penalties for late payments.

Not Considering Repayment Terms

Consider your repayment options before taking on debt. Understand how long you'll have to repay the loan and the monthly payment amounts. Choose terms that will fit your post-education financial situation.

Incomplete Documentation

Submitting incomplete documentation can lead to delays or rejections. Double-check that you have all required documents in order before applying.

Delaying the Application

Start the loan application process early. Delays can result in funding not being available when you need it, potentially impacting your ability to enroll in your desired program.

Benefits of Education Loans for Abroad Studies

Education loans can offer numerous benefits:

Encourage Financial Independence: By financing your education, you can maintain financial independence rather than relying solely on family support.

Covers a Wide Range of Expenses: Loans can cover more than just tuition fees, allowing you to focus on your studies and living conditions without financial stress.

Reduces Strain on Parents: Taking a loan can help alleviate the financial burden on your parents, making it easier for them to support you in other ways.

Freedom to Pay Post-Education: Many education loans offer a grace period, allowing you to begin repayment after you graduate, providing time to secure employment.

Conclusion

Securing a study abroad loan can be an excellent way to finance your education while preserving your savings. By understanding the different types of loans, the application process, and potential pitfalls, you can navigate this financial landscape with confidence. With the right approach, studying abroad can become a reality, opening doors to new opportunities and experiences.

About the author

In 2024, Dhruv has become an important content writer at Lorien Finance, a well-known financial services firm recognized for its innovative strategies and focus on client success. With a love for storytelling and a solid understanding of finance, Dhruv has made a strong impact with his engaging and informative writing.

#study abroad #study abroad loans #know about study abroad loans

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firstbuzz · 2 years ago

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Educational loan disbursement falling since FY20

Total amount of educational loans disbursed by scheduled commercial banks in India has been steadily falling since the peak in FY20. While in 2019-20, a total of ₹18,553.46 crore was disbursed, in 2020-21 as well as in 2021-22 it came down to ₹18,350.83 crore and ₹17,715.33 crore, respectively, according to RBI (Reserve Bank of India) data released recently.

"Students get education loans to pursue higher studies in UG (Under Graduate) and PG (Post Graduate) courses, in India or abroad. The Indian Banks’ Association (IBA) model educational loan scheme for pursuing higher education in India and abroad was formulated in 2001," said a State Bank of India (SBI) branch manager based in Chennai.

Since then, the scheme has been modified from time to time, based on the experience gained and feedback received during its implementation over the years.

"As per the scheme guidelines of 2015, there were ceilings on the educational loan amount i.e. a maximum of up to ₹10 lakh for studies in India and a maximum of up to ₹20 lakh for studies abroad. As per the last revision undertaken in 2021, banks now have the freedom to provide need-based finance. Banks are broadly guided by the above scheme while sanctioning educational loans," said the bank official.Meanwhile, students from just six states namely Maharashtra, Tamil Nadu, Kerala, Telangana, Gujarat and Karnataka account for 57% of the education loans disbursed by various scheduled commercial banks in the year 2021-22, as per the data released by the Reserve Bank of India recently. It is worth mentioning that these six states have been cornering more than half of the total education loans disbursed in the last few years.Students from Maharashtra have taken ₹2,272.86 crore as education loans and this is the maximum among these six states. Maharashtra is followed by Kerala (₹2015.41crore) and Tamil Nadu (₹1,634.43 crore).The Government of India sets an educational loan disbursement target for public sector banks (PSBs) every financial year. Banks have the freedom to provide need-based finance, as per the latest revision of IBA Model Educational Loan scheme undertaken in 2021, he said.The department of higher education in the Ministry of Education is handling the Credit Guarantee Fund Scheme for Education Loans (CGFSEL). As per this scheme, the credit guarantee is provided for education loans covered under the Indian Banks’ Association (IBA) model education scheme up to ₹7.5 lakh without any collateral security and third-party guarantee.Further, the government has also launched an online portal called Vidya Lakshmi Portal (VLP) to ensure hassle free education loans through a single window system. Students can apply, view, and track the education loan applications submitted to banks anytime, anywhere by accessing the portal. Further, the decision on a loan application is to be reported by the banks on VLP.When it comes to financing higher education there is always a dilemma of either using parents’ savings or taking out an education loan. While using personal savings keeps you away from the worry of paying it back, it comes along with the burden of emptying out the retirement savings of the parents.In such a situation, it is better to take an education loan as these are low-cost loans. Banks charge around 7-12% interest along with the unlimited tax benefit on interest deduction. Moreover, instead of using personal funds for educational expenses, the optimal way is to apply for low-cost loans from a lender and invest funds where they can get better returns.M Narayanasamy* , a Computer Science Student, has got admission in a university in the United States. He needs ₹40 lakhs to take care of fees for two years of MS in the US university as well as his own expenses for stay, food and travel.'I have applied for an education loan seeking ₹40 lakh in a private bank which has a separate wing for disbursing education loans. We were told that if we provide collateral for the loan the interest rate will be less compared to loan taken without any collateral," said Narayanasamy.The University wanted students to show sources for paying fees either from family savings or a sanction letter from the bank which has agreed to provide the needed funds.”The Universities abroad want to attach letters from at most three bank accounts in which the father or mother have accounts to show that they have enough funds. Otherwise, we must get a sanction letter from the bank which provides the loan,” said Narayanasamy."Students are generally discouraged from using personal funds, contingency funds, or retirement funds of their parents.These funds can be used better if invested in schemes with higher returns. However, students often rely on personal funds to finance a part of their education costs to reduce their dependence on education loans," said Madras School of Economics director K R Shanmugam."For example, if I have ₹30 lakh, and based on my past investment experience, I can get a 12% return, it makes more sense to invest ₹30 lakh, and borrow ₹30 lakh from a lender at an effective interest rate of 6.3%. On the other hand, if not thought through properly, not taking an education loan can become an enduring burden," said Shanmugam.At present, following several changes in the bank rates by the RBI, the interest rate for education loans with collateral is around 10.25% to 10.75% and for loans taken without collateral the interest rates vary from 11.25% to 12.25%. "Once the bank is satisfied with the documents presented by us, we are asked to pay 1% of the total loan amount as processing fee and only after this, the bank issues the sanction letter," said Narayanasamy.The loan is disbursed to students and interest is deducted from the parents’ income till the student completes his education. Later the loan is repaid by the student through EMIs.

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collegeeducationnewsllcusa · 3 years ago

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Why dozens of Indian students are turning to crowdfunding platforms to fund education dream

Illustration by Soham Sen | The pressure

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New Delhi: It’s an emerging social media trend that has drawn contempt from some but support from many others. Several students dreaming of an overseas education have turned to social media with crowdfunding calls for help with the (often prohibitive) fees charged by leading institutions.

Many of these applicants refer to themselves as first generation learners hoping to use their experiences and teaching abroad to create change at the grassroots level. They tend to show excellent educational qualifications and resort to crowdfunding after securing admission to some of the most prestigious institutions in the world.

Some applicants say they are turning to crowdfunding because they cannot afford the loans – they say they come from a humble background and cannot offer anything as collateral, which leads to higher interest rates.

While others note that the scope of applying for assistance from banks and financial institutions has shrunk during the Covid pandemic, some applicants seek partial assistance, saying they are taking out a smaller loan or taking on a part-time job to meet the remaining costs.

The idea of soliciting donations for education was criticized by many online wondering why applicants are not taking out loans. Hundreds of people tackle not only with contributions, but also with words of encouragement.

Ketto, a crowdfunding platform, says the number of fundraisers in the education sector has increased by 300 percent last year. Ketto is a co-founder of the educational fundraisers on their platform Zaheer Adenwala said: 46 percent were able to raise around 50 percent of their target amount, while around 25 percent achieved 25 percent of their target.

Another crowdfunding platform, Milaap, has hosted 2,374 fundraisers so far this year, and education is the second most common destination. after medical treatment.

Adenwala from Ketto said, “Crowdfunding has become a popular tool for students looking to study abroad. One of the reasons for this is that students can raise funds not only for their tuition fees, which a conventional loan grants them, but also for their living expenses.

“They usually come as the first option on our platform to raise money, as not all students can afford loans. Those who can later take out loans for the amount that was not raised on our platform. This reduces the burden on disadvantaged students, ”he added.

Also read: Covid is changing the way students choose overseas schools. How the country dealt with the virus is one factor

Foreign training costs

Foreign education is very important.

A Foreigner aiming for a master’s degree at an Ivy League university in the USA you would have to pay around 85 lakh Rs / year for tuition and an average of 14 lakh Rs for living expenses.

At Oxford University in the UK, tuition fees alone can set back thousands of pounds (£ 1 is around 103.65 rupees).

The education loan rates offered by Indian banks vary. While SBI offers a tariff of 8.65 percent, the rate is higher at private banks, from 9.55 percent at HDFC and 10.5 percent at ICICI.

Students can also apply for loans from private donors.

“The interest rate for education loans at banks in the public sector is between 7 and 10 percent, while private institutions and banks only start at 12 to 13 percent,” said a media professional who lives in Delhi and wants to study in Canada. “The fees for most management courses start at Rs 35 lakh per year. In addition, the students take out an additional (loan) of Rs 15 lakh-20 lakh for the total cost of living. “

As for repayment, he added, “private financiers have fluctuating interest rates that are subject to current market conditions”.

“It will be difficult for those who later get fixed salaries in their jobs. Public sector banks have low interest rates and fixed rates of repayment and allow a student up to 15 years to repay the loan, ”he said.

Parima Mehta, an engineer based in Bengaluru, added that “Loans without collateral have a very high interest rate that not everyone can afford.”

While affordability is the problem with some crowdfunding applicants, others point to a reluctance on the part of banks to provide educational loans, especially amid the pandemic.

However, the banks’ apparent hesitation in granting educational loans predates Covid amid concerns on growing distressed assets (NPAs). In 2019, banks had reported an increase in bad debts from the education sector.

Speaking to ThePrint on condition of anonymity, bank officials admitted that they have become more conservative on lending during the pandemic because “they have seen a sharp surge in NPAs or loan defaults. This is mainly due to the loss of jobs, high expenses for Covid treatments and massive wage cuts.

“The gross NPA for education loans was 7.5 percent nationwide in the last fiscal year. This year it should be 9 percent. The main cause of this is the pandemic-related job losses and income cuts, ”said an SBI official. “In times like these, even banks are becoming conservative when it comes to lending. Even if a banker feels that a certain person deserves the loan amount, they will not get it without strong financial metrics. Logically / practically, the loan is given to an applicant with better financial support. ”

Education loans are an additional risk compared to a home or car loan. “Unsecured education loans up to Rs 7.5 lakh are granted, no collateral is required. In an economic crisis, a borrower will first try to pay interest on the loans they are involved in, such as a home loan or a car loan. This is because he could lose a home or a car if the loan goes to an NPA. For this reason, education loans become secondary for them and lead to NPA. “

Also read: Vaccination regulations are the big new hurdle for Indian students going to overseas universities

No secured route

Even if students are increasingly turning to crowdfunding, it is not a surefire way to get support.

A 27-year-old anti-caste activist and rapper, Sumeet Samos Turuk, made headlines this month when he grew up Rs 38 lakh in 3 hours to study at Oxford but few have it that easy.

A journalist who has not yet achieved his goal said: “Being a minority brings extra baggage. On social media you are not only trolled, you also have to ask yourself insensitive questions. Not all applicants have the privilege of applying for large loans, not all students can afford to provide the collateral or pay the monthly interest. “

As a first generation learner, he said the loan could be a hidden setback for him and his family. “My family has no collateral to give in place of the loan, and loans without collateral have very high interest rates. I come from a humble family and we cannot afford it, ”he added. “Does that mean I have no right to study at a world-class university?”

(Edited by Sunanda Ranjan)

Also read: Students from Oxford and Cambridge collect over Rs 18 lakh for Covid aid in India

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source https://collegeeducationnewsllc.com/why-dozens-of-indian-students-are-turning-to-crowdfunding-platforms-to-fund-education-dream/

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inpeaks · 7 years ago

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A number of banks in India offer education loans at attractive rates of interest to students who want to pursue their higher education in India or abroad. These education loans enable deserving students to attain their desired educational qualification without any stress.

These loans cover a number of expenses of students during their studies such as education fees, books, hostel fees, travel, examination fees etc. Generally, education loans are offered in specific slabs:

Below INR 4 lakhs, between INR 4 lakhs and INR 7.5 lakhs, and above INR 7.5 lakhs.Here, we have prepared a list of top 10 banks in India, offering education loans to deserving students to pursue their dream education in India or abroad.

State Bank of India

Named SBI Student Loan Scheme, the State Bank of India offers education loan to students to pursue their dream education. The loan is provided to students to pursue technical and professional, graduate and post-graduate degree courses such as MBA, MCA, MS offered by reputed universities.

The loan amount up to a maximum of INR 30 lakhs will be provided with collateral security required only for loans above INR 7.5 lakhs. The repayment period varies from 10 years to 12 years depending on the loan amount. The interest rate offered on education loans will be up to 2% on the current base rate of the SBI.

Applicants for the loan have to submit the admission letter, loan application form, details of course costs, co-applicant details and other required KYC documents while applying for an SBI education loan.

Axis Bank

In comparison to other banks, Axis Bank offers education loans at competitive interest rates for students who are planning to pursue higher studies. It offers a maximum loan of INR 20 lakhs that cover hostel fees, tuition fees, and book costs, etc.

The bank offers minimum loan amount up to INR 50,000. The interest rate for Axis Bank education loans ranges from 8.5 % with special rates for women applicants.

HDFC Bank

Another bank to offer education loan with flexible repayment tenures is HDFC Bank. Through this bank, students can get education loan at their doorsteps for over 950 courses across 36 countries.

The maximum loan amount by HDFC Bank is up to INR 20 lakhs. Students in the age group of 16 to 35 years are eligible to apply for an education loan. The processing fees for education loans is up to 1.5% of the loan amount with no fees levied for prepayment of the loan.

Punjab National Bank

Punjab National Bank offers the ‘PNB Saraswati scheme’ and ‘PNB Udaan’ scheme to provide education loan to students who are planning to pursue higher studies. The loan covers university fees, travel, exam fees, lab fees, library fees, book/equipment fees and other related expenses.

The bank offers the base rate as the interest rate on loans taken for pursuing education at top 200 universities across the world. An upfront processing fee of 1% has to be borne by the borrowers. The tenure options available for education loan borrowers is up to 15 years. No loan margin is required for education loan below INR 4 lakhs.

Canara Bank

Canara bank offers education loans to students to pursue professional and technical courses, graduate and post-graduate courses that promises job opportunities. The education loan covers university fees, travel, exam fees, lab fees, library fees, book/equipment fees and other related expenses.

With a loan margin requirement of 15%, the bank offers education loan up to INR 4 lakhs. The bank can sanction maximum loan up to INR 20 lakhs. The repayment tenure is 10 to 15 years depending on the loan amount. Security is not required for loan amounts below INR 4 lakhs.

IDBI Bank

The IDBI Bank offers education loan to students who are interested to pursue professional and technical graduate courses, post-graduation courses, diploma, and CPA/CIMA courses. The education loan covers university fees, travel, exam fees, lab fees, library fees, cost of computers, book/equipment fees and other related expenses.

There is no security requirement for loans taken below INR 4 lakhs. The bank offers maximum loan amount up to INR 20 lakhs. The repayment tenure can be up to 10 years for loans up to INR 7.5 lakhs and up to 15 years for loans above INR 7.5 lakhs.

Bank of Baroda

Students who are applying for professional and technical courses can apply for an education loan from Bank of Baroda.

The bank offers education loan to students under the Baroda Scholar scheme. Click To Tweet

The bank offers a maximum loan up to INR 20 lakhs with a loan margin requirement of 15%. Students can repay the loans taken up to INR 7.5 lakhs within 120 months and education loans taken above INR 7.5 lakhs within 180 months.

Allahabad Bank

Another bank to offer education loan to students to pursue higher education is Allahabad Bank. The education loan is offered to students to pursue professional or technical courses in recognized institutions. The quantum of the loan provided by the bank is need-based subject to repaying capacity of the parents or students with a ceiling of INR 20 Lakhs.

Indian Overseas Bank

Under the Vidya Jyoti scheme, the Indian Overseas Bank offers education loan to students who want to pursue professional or technical courses.

The loan is offered only for Graduation and Post Graduation Courses offered by reputed universities. The bank offers a maximum loan up to INR 40 lakhs for students to study abroad, and INR 30 lakhs for students to study in India. The repayment period is maximum of 5 to 7 years.

Source: Success Ideas

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moneymindz-investsmartly · 8 years ago

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INTERESTING TIPS WHILE APPLYING FOR EDUCATIONAL LOANS IN INDIA

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MoneyMindz.com India’s First Free Online / On-call Financial Advisory

Your life becomes incomplete, without proper education. You need to take up admission to various normal/professional colleges in India. Many banks/financial institutions are available in India, offering quality educational loans at reasonable rates in India.

Cost of educational courses, professional courses, programs are increasing day by day. Everybody cannot afford good educational courses from various colleges in India. The role of educational loans has increased considerably, as it plays a vital role in certain aspects. They are

èTaking a course costing too much at an educational institution.

èPursuing higher education in India/Abroad

èPerson belonging to a not financially well to do family.

Here Are Some Ways Available To Get Hassle Free Educational Loans In India:

Zero In On Loan Amount: The student/candidate must zero in on the amount that she/he can pay. Furthermore, one must also see the loan amount that can be borrowed from the bank.

Investigate on Interest Rates: One must do a detailed research on the rate of interest towards the educational loans, taken in India. Ideally, taking educational loan for long duration is good. Longer educational loans, rate of interest and EMI (Easy Monthly Instalments) is also reasonable in nature.

Loan from the government banks: If you take educational loan from government bank, under Section 80-E comes with various tax benefits. This prevents unnecessary pressure on the person in taking up the educational loans in India.

Payments On Time: A genuine customer taking educational loan will always make the payment on time. However, if you default on making payment, then it goes against the credit history of the person. So, educational loan encourages an individual to be punctual in clearing loans.

Keep Loan Copies: All students must keep a clean record of educational loan copies, for future correspondences.

Check Eligibility Criterions: You must check relevant eligibility criterions before applying for the educational loans in India like:

ÜIndians between 18 yrs to 30 years pursuing various courses.

ÜCollateral security for loans above INR 7.5 Lakhs.

ÜDetail of co-applicant required could be parent, distant relative, wife and others.

ÜCollege, where you apply for admission must be approved by government.

Taking Maximum Amount: Please make sure that you get the maximum benefits, before taking the loans. Things like the cost of living, tuition fees, cost of books, travelling expense, course fees, and other miscellaneous expense must be covered.

Processing Charges: One must take into account various kinds of processing charges relating to educational loans.

Check Repayment Capacity: You applied for the loan and after taking loan, major task is to clear the loan. Check the duration, where in you need to clear the loan to avoid any extra/unwanted charges.

Coverage Of Educational Loans In India: Most of the educational loans in India would consist of:

èExam Fees

èLibrary Fees

èTravelling Expenses

èRepayment period

èBook fees

èEquipment Fees

èTax exemption

èMiscellaneous Expenses

So, you must analyse all the factors in a systematic manner before selecting a good educational loan in India.

TO KNOW MORE ABOUT EDUCATIONAL LOAN:

Give Missed Call on

022 – 6211 6588

If You Give A Missed Call On Above Number MoneyMindz.com India’s First Free Online / On-call Financial Advisory Financial Planner Will Contact You Freely.

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INTERESTING TIPS WHILE APPLYING FOR EDUCATIONAL LOANS IN INDIA INTERESTING TIPS WHILE APPLYING FOR EDUCATIONAL LOANS IN INDIA Your life becomes incomplete, without proper education. You need to take up admission to various normal/professional colleges in India.

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