Almost all Indian students aspiring to study abroad are looking for affordable education loans to fund their long-held dream of acquiring that coveted overseas degree.
That said, getting a student loan – which by default happens to be the first step in this long process – is no easy task. To begin with, banks and other lending institutions, as the first criterion for elimination, always check the institution where you gain admission. Second, they take into account the loan amount you are looking for.
Banks always look at the employability of students after the end of the course and therefore the first criterion they look for is the notoriety of the institute and the place of its alumni.
But there could also be other problems. Not every branch could have the authority to issue a student loan to study abroad.
Let’s say, for example, that you have obtained admission for a course in France. First, this institution may not be on the list of approved educational institutions for which public banks would be willing to lend. Suppose you find a bank that agrees to provide the loan, then the branch in your city or hometown may not have the authority to provide this type of education loan. In this case, you may need to go to the nearest big city or metro and do all the paperwork to get the loan.
Non-Banking Financial Companies (NBFCs) can offer you the opportunity to get a loan without too much paperwork, but there may be risks of being refused a loan due to one or a combination of several factors – country, university, course, and/or loan amount. Unless you tick all the parameters, a loan could be prohibited.
Suppose you finally manage to get a loan to study abroad. Then the next problem that most students face is that the loan might only cover tuition and in some cases board or living expenses. Beyond that, you’ll need to arrange your own finances for everything else.
Sometimes banks or other lending institutions may require additional documents, including those from the university where you wish to be admitted, with details of costs and other expenses before granting you a loan.
More often than not, public banks will seek collateral before granting a student loan to study abroad. This can take the form of real estate, a provident fund or a security deposit.
Finally, the interest rate can reach 12.5% for public banks and 13% for private banks.
But don’t despair, you can still get a student loan to study abroad and fulfill your long-held desire to acquire a foreign degree.