Education Loans with Collateral to Study Abroad in 2024

What is an Education Loans With Collateral?

Studying abroad requires financial support, which can not be obtained easily.  However, education loans with collateral to study abroad offer smooth and speedy loan processing. In this process, you will be required to provide any of your collaterals to the lender as a guarantee of loan payback. If, in any scenario, you are not able to pay back the loan amount, the lender can sell your collateral and get back their amount. 

A collateral can either be a tangible or an intangible asset. Tangible assets are homes, flats, or any property. On the other hand, an intangible asset is like a government bond. However, people usually use collateral to study in foreign countries, such as life insurance policies, gold, fixed deposits, investments, and bank savings. This kind of loan reduces the interest amount and minimizes the loan provider’s risk as well.

Importance of Education Loans With Collateral to Study Abroad

An education loans with collateral to study abroad is essential for students to pay their tuition fees and manage their living expenses, travel allowances and other miscellaneous expenses without any strain. It provides peace of mind to complete your studies without having any financial challenges. It is evident that inflation is rising with the speed of light, and it is becoming more difficult to obtain a loan without heavy interest rates. However, loans with collaterals also reduce interest rates and make it much easier for you to accomplish your studies in a foreign country. 

Also Read : How To Avoid 20% TCS On Foreign Remittances

Types of Collateral Required to Study Abroad

Now, it is essential to understand the types of collateral available. Certain types of collateral are accepted by banks and financial entities to provide education loans with collateral to study abroad.  Here are a few examples of collateral types that can help you to study abroad. 

• Real Estate Properties
• Life Insurance Policies
• Fixed Deposits
• Government Bonds
• Gold

If your family has such assets, then you are eligible to apply for an educational loans with collateral to study abroad. 

Features of an Education Loan with Collateral to Study Abroad

• First and foremost, to obtain an education loans with collateral to study abroad, you must have tangible and intangible assets. 

• This kind of loan has lower interest rates than others. 

• For a collateral education loan, it is not essential to submit proof of parents’ income. 

• It offers flexible repayment options without any stress. 

Also Read : How to Transfer Money From India to Canada

Eligibility Criteria for Collateral-Based Education Loan to Study Abroad

For this, loan eligibility criteria may vary from lender to lender. But usually, here are some of the eligibility that includes the following criteria: 

• An admission letter from your foreign university or institute 

• A co-applicant is necessary; it can be your parent or guardian

• You must have collateral, whether it is tangible or intangible

• You must have a satisfactory academic score

Also Read : How to Pay Canada College Fees from India

Documents Required for Education Loan With Collateral to Study Abroad

Certain documents must be submitted to apply for such loans. Here is a list of all the required documents.

• The most important document is an admission letter
• An estimated cost for the entire course
• Copy of passport and other required documents
• Papers related to your collaterals are also required to be submitted, such as property deeds

These are some of the documents that are required to be submitted. However, the documentation process can be complex and time-consuming. But to minimize this hassle, you can seek extensive support from Hiwipay. 

Advantages of Education Loan With Collateral

In this specific segment, we have mentioned some of the essential advantages of education loans with collateral to study abroad.

• Higher Loan Amount: Applying for a loan with collateral provides the opportunity to get a higher loan amount. It can fulfill all the necessities required for your higher education abroad. 

• Lower Interest rates: Collaterals provide a sense of security to loan providers, so they keep their interest rates low. 

• Easy Loan Approval: This loan is easy to get because it assures the borrower that they will definitely recover their loan amount if the lender fails to pay back the loan. 

• Longer Repayment Tenure: An education collateral loan provides you more time to repay the loan than other loan types. It eliminates the burden of paying the loan during your studies. 

Expenses Covered Under Collateral-Based Education Loan

You must be eager to know what types of expenses can be covered under this loan facility. Here are the expenses that can be covered under this loan facility. 

• This loan covers your tuition fee or university fees.

• It also covers the cost of your flight ticket.

• Expenses related to study, such as textbooks and examination fees, are also covered under this loan. 

• This loan also covers the expenses of all study materials.

• Library charges and health insurance also come under this loan facility. 

Also Read : Education Loan for Medical Studies Abroad

Best Collateral-Based Education Loan Providers in India

The following are some of the top Indian banks that provide education loans.

Name of The Bank	Loan Amount	Repayment Tenure
ICICI	Maximum 2 Crore	14 years
HDFC Credila	More than 1 Crore	12 Years
Yes Bank	40 Lakh	15 Years
Avanse	Above 1 Lakh	15 years

Interest Rates of Different Banks for Education Loan Abroad

The interest rates for this type of loan can vary from bank to bank. However, ideally, the current range of interest rates may vary from 6.85% to 9.50%. Sometimes, interest rates also depend upon the loan provider’s policies and the applicant’s profile.  

Tax Benefits on Education Loan

If you are going to apply for an education loan that too with collateral, you must know that it can have tax benefits as well. Under section 80E of the Indian Income Tax Act, it can reduce the cost of education loans if they come under collateral. 

What is an Education Loan EMI Calculator

Calculating your EMI can be a daunting task, and during the repayment process, it is possible that sometimes you may forget to pay your EMI on time as well. To eradicate all these issues, it can be beneficial to use an Education loan calculator. It is an online EMI calculating tool that can help you easily calculate your monthly EMI. 

Education Loan Repayment Process

Once you obtain an education loan, the repayment process usually starts after 1 year of completion of your studies. In some cases, it can also start after six months of employment. Different loan providers have their different monthly repayment periods, you can also repay your loan amount through EMIs.  Here, we have mentioned several repayment processes that are available:

• You can pay the lender directly through Internet banking. 

• A payment can be made through a cheque as well.

• You can also set an EMI date, and the amount will be directly deducted from your bank account. 

• You can also pay it through a demand draft. 

How to Apply for an Education Loan With Collateral in 2024

To apply for an education loans with collateral to study abroad in 2024, it is essential to follow these steps:

• First of all, compare all the offers you have from loan providers and choose one with extensive benefits. 

• Second most important step is to evaluate the value of your collateral.

• Fill out the application form with all the essential details.

• Submit all the required documents related to the student and the co-applicant.

Get an Education Loan for Abroad Studies with HiwiPay

HiwiPay offers specialized loans for students studying abroad. It helps you to understand the loans feature competitive interest rates and provides comprehensive support throughout the loan process. 

Conclusion

If you are going to apply for an education loans with collateral to study abroad, it is vital to know every aspect of this loan. This type of loan can be obtained easily if you are planning to study abroad. Easy repayments and a streamlined documentation process are the backbone of this loan application. 

FAQ for Education Loans With Collateral to Study Abroad