High tuition fees make studying abroad a dream for many international students. However, education loans act as an important help to turn students’ dreams into reality. This guide will help you understand the loan process in detail and enable you to easily finance your academic journey abroad.
Why is an education loan important?
Overcome financial hurdles: With the help of an education loan, financial constraints no longer will be able to hold you back. These loans help the most capable and deserving students balance their savings and academic expenses overseas.
Ensure visa approval: Having sufficient funds in your bank account is essential for visa applications. Education loans provide you with a legal source of funding that boosts your prospects of visa approval to study abroad.
Understand the loan process
Calculate your needs: Before submitting your loan request, carefully calculate all your expenses to study abroad. Some of these expenses will include tuition fees, living costs, travel and various other expenses. Basis your expenses, decide the total loan amount that you need.
Explore loan options: Each bank has its own loan structures, interest rates and terms of repayment. Research deeply and compare all the options available from public sector banks, private banks and other Non Banking Financial Companies (NBFCs).
Public Sector Banks: With lower interest rates, their terms and conditions are generally stricter and they require a lot of documentation to approve loans.
Private Banks: These banks are more flexible when it comes to loan approvals. They offer unsecured loans as well but at relatively higher interest rates.
Prepare a list of mandatory documents: Banks evaluate your loan eligibility based on your academic results and financial status. Make sure you have the following documents available to apply for an education loan:
Personal identification documents
- Passport-sized photograph
- PAN Card
- Aadhaar Card
- Address Proof
- Passport
Academic credentials
- Offer letter or I-20 form
- Academic transcripts from class 10 onwards
- Standardized test scores (GRE/TOEFL/IELTS/PTE)
Other documents
Depending on your situation, you might as well need to produce work experience certificates, extracurricular activity certificates and Statement of Purpose (SOP).
Choose the right kind of loan
Secured Loans: These loans are sanctioned based on collateral (like property). Such loans often carry lower interest rates.
Unsecured Loans: Sanctioned exclusively on your creditworthiness, such loans generally carry higher interest rates.
Select a convenient repayment plan
Opt for an EMI (Equated Monthly Instalment) schedule that you can decide basis your future career prospects. Don’t load your initial years of earning with a high repayment plan.
Education loans are helpful in empowering international students to fulfil their academic goals by financing their education overseas. By complete planning, understanding all the loan options available and choosing the right kind of loan, you can ensure a hassle free academic journey abroad.