Which Bank is Best for Education Loan for Abroad?

How to Get a Student Loan in India to Study Abroad

When it comes to education loan for abroad studies, there are many players on the lender’s side including public and private banks, NBFCs, and even international lenders. Choosing a lender among them can be a difficult task since the process involves rigorous comparison. It also involves an analysis of your requirements and aspects offered by the banks.

It includes multiple factors like- which bank is charging the lowest interest rates, which banks provide the best repayment terms, etc. 

Hence, it is crucial to first understand your requirements, and then check your eligibility regarding the loan. Once you’re satisfied with your eligibility, the next step is to arrange all the required documents in the prescribed format. 

Then file the application and once your loan is approved, get ahead with your studies abroad.

Also Read : How to Get an Education Loan without Collateral for MS

Best Education Loan in India

Deciding on which is the best education loan in India depends on many factors:

• Interest rates,
• Loan amount,
• Repayment tenure,
• Moratorium period,
• Terms of repayment and

Many other factors related to requirement of collateral, co-signer or co-applicant, etc. 

Here’s the list of interest rates and loan amounts offered by different Indian Banks:

Bank	Interest Rates	Loan Amount
State Bank of India	9.5% to 11.5%	Up to INR 1.5 crore
Punjab National Bank	10.65%  to 11.15%	Up to INR 1 crore
Bank of Baroda	9% to 10.5%	Up to INR 80 lakhs
ICICI Bank	10% to 12%	Up to INR 1 crore
Axis Bank	10.5% to 13%	Up to INR 75 lakhs
Kotak Mahindra Bank	Up to 16%	Up to INR 20 lakhs
HDFC Bank	11% t0 12.5%	Up to INR 1.5 crore

Types of Education Loans for Studying Abroad

On the basis of collateral, there are mainly two types of education loan for abroad- secured and unsecured. Let’s understand them in detail:

• Secured Education Loan: These loans require collateral, such as property, fixed deposits, or other assets. Secured loans generally offer lower interest rates and higher loan amounts. They are ideal for students who have access to assets that can be pledged as collateral.
• Unsecured Education Loan: These loans do not require any collateral. They often come with higher interest rates and may have a limit on the loan amount. Unsecured loans are suitable for students who do not have assets to pledge but have a strong academic record and admission to a reputed institution.

 

Eligibility Criteria to Apply in Indian Banks

Different Indian Banks have varying eligibility criteria, but some common factors include:

• Applicant must be an Indian citizen.
• A strong academic record increases the chances of loan approval. 
• Having a confirmed admission from a recognized university abroad is usually a prerequisite for obtaining an education loan. 
• Some lenders may require a co-applicant, such as a parent or guardian, who will share the responsibility of repaying the loan if the student defaults. 
• For secured loans, lenders may ask you to provide any asset such as properties, fixed deposits, or other financial assets to be pledged as collateral.
• Lenders assess the repayment capacity of the applicant by evaluating the income, credit score and other factors.

 

Documents Required for Education Loan for Abroad Studies

When applying for an education loan for abroad studies, the following documents are typically required:

Loan Application Form	Duly filled application form provided by the lender.
Identity Proof	Passport, Aadhar card, or other government-issued ID.
Address Proof	Utility bills like electricity bills, water bills, etc. or, or other valid proof of address.
Admission Letter	Proof of admission from the university or institution you’re enrolled in.
Academic Records	Certificates and mark sheets from previous education.
Income Proof	Salary slips, income tax returns, or bank statements of the co-signer or co-applicant.
Collateral Documents	In the case of a secured loan, documents related to the collateral being provided.
Bank Statements	Recent bank statements of both the student and the co-signer or co-applicant.

Key Features of Education Loan for Abroad Studies

While applying for an education loan for abroad studies, it is important to know about the key features of an education loan. Below are some of such key features:

• Interest Rates: Interest rates may vary depending on tenure and amount.

1. Public Sector Banks: Starts at 9.8%
2. Private Banks: Starts at 10.85%
3. NBFCs: Starts at 11.25%
4. International Lenders: Starts at 11%

• Maximum Loan Amount: It depends upon your eligibility and other factors like financial circumstances, collateral value, etc.

1. Public Sector Banks: INR 1.5 Crore
2. Private Banks: INR 50 Lakhs
3. NBFCs: INR 75 Lakhs
4. International Lenders: USD 1 Lakh

• Repayment Tenure:

1. Public Sector Banks: up to 15 years
2. Private Banks: up to 15 years
3. NBFCs: up to 20 years
4. International Lenders: up to 15 years

• Margin Money:

1. Public Sector Banks: 10% to 15%
2. Private Banks: up to 10%
3. NBFCs: Nil
4. International Lenders: Nil

• Processing Time:

1. Public Sector Banks: 10 to 15 days
2. Private Banks: 5 to 7 days
3. NBFCs: 5 to 7 days
4. International Lenders: 5 to 7 days

• Co-Applicant Requirements:

1. Public Sector Banks: Generally not required.
2. Private Banks: Required
3. NBFCs:  Required
4. International Lenders: Not Required

Also Read : Types of Collateral for Abroad Education Loan

How to Apply for the Best Education Loan in India?

Once you are sure of your eligibility and decide on the lender for your education loan for abroad, the next step is to apply for the loan. Follow the given steps to successfully apply for the loan:

• Fill out the application form. Check if the bank requires you to fill out the form in person. Else, you can visit the bank’s official website and fill out the application form with all the necessary details.
• The next step is to upload the documents as asked by the lender. It may include 

• Identity proofs, 
• Proof of address, 
• Proof of income (if applicable), 
• Your education and course details (acceptance letter, duration of course, etc.)
• Statement of cost of study
• Any other documents the bank may deem fit for verification
• Once the verification is done on the bank’s part, your loan will be approved and the amount will be sanctioned and disbursed as per the agreed terms and conditions.

HiWiPay: Best Platform to find Education Loan in India

While applying for an education loan for abroad, the biggest challenge is to compare different lenders on multiple metrics including the loan amount requirement, applicable interest rate, nature of interest rate, repayment tenure, etc. But HiWiPay is here to assist you with this problem.

HiWiPay is an online platform that saves you from the hassle of knocking on each lender’s door. Just fill in the minimal details and we’ll connect you with the best lenders out there that align with your needs. And they will contact you directly with customized offers. 

Also Read : Education Loan for BBA Abroad 2024

Conclusion

Taking an education loan for abroad can become the best decision of your life since it opens multiple doors for you. But it is very important to choose a lender that aligns with your loan requirements. From loan amount to interest rates and moratorium period, there are multiple factors that affect your decision. But rest assured that HiWiPay is here to help you with your loan requirements.

FAQ of Education Loan for Abroad