Pursuing higher education abroad is a dream for many Indian students seeking global exposure and specialized learning opportunities. However, the cost of studying abroad can be a significant financial burden for most families. In such cases, education loans become an essential means to bridge the gap between aspirations and affordability.
Fortunately, there are several reliable education loan providers in India that offer financial assistance to students aspiring to study abroad. In this article, we will explore some of the top education loan providers in India, along with their key features and benefits.
Best education Loan providers in India
State Bank of India (SBI)
The State Bank of India is one of India’s largest and most trusted public sector banks. SBI offers various education loan schemes specifically designed for students pursuing higher education abroad. The bank provides loans for tuition fees, examination fees, and other related expenses. The interest rates are competitive, and repayment options are flexible, allowing students to start repaying the loan after completing their studies.
HDFC Credila is a subsidiary of HDFC Ltd., India’s leading private sector bank. It is a specialized education loan provider that focuses solely on financing education. HDFC Credila offers tailor-made loan solutions for studying abroad, covering tuition fees, living expenses, travel costs, and more. The loan approval process is quick and hassle-free, making it a popular choice among students.
Axis Bank is another major private sector bank in India that offers education loans for studying abroad. Their loans cover a wide range of courses and institutions across the globe. Students can avail loans for undergraduate and postgraduate programs with attractive interest rates and flexible repayment options. The bank also provides pre-visa disbursals for eligible courses and countries.
Avanse Financial Services
Avanse Financial Services is a non-banking finance company that specializes in providing education loans for students pursuing higher education abroad. They offer loans for a diverse range of courses and countries. Avanse provides unique features like 100% coverage of the cost of education and customized repayment plans to suit the student’s financial capabilities.
Punjab National Bank (PNB)
Punjab National Bank, a leading public sector bank in India, offers education loans for Indian students aspiring to study abroad. PNB’s education loan covers a wide range of expenses, including tuition fees, accommodation, and travel costs. The bank also offers competitive interest rates and flexible repayment options to ease the financial burden on students and their families.
InCred is a new-age digital financial services company that offers education loans to students seeking overseas education. The company provides loans for various courses and institutions across countries. InCred’s education loan process is quick and can be completed online, making it convenient for students and their parents.
Canara Bank is a well-known public sector bank in India that provides education loans for studying abroad. Their loans cover diverse courses and countries, and the bank offers competitive interest rates and relaxed collateral requirements. Canara Bank also provides support services for students through tie-ups with reputed coaching institutes for various entrance exams.
Top 11 factors to consider before taking an education loan
Getting a loan for study, especially for higher education abroad, requires careful planning and research. Here are some steps to increase your chances of getting a study loan:
Research Loan Options: Explore various loan providers, including banks, financial institutions, and specialized education loan providers. Compare interest rates, repayment terms, and loan amounts offered by different lenders. Look for loans specifically tailored for students studying abroad.
Check Eligibility Criteria: Review the eligibility criteria of the loan providers you are interested in. Typically, lenders consider factors like academic performance, admission to a recognized institution, co-applicant’s income or collateral, and your chosen course of study.
Apply with a Co-Applicant: If you have a family member with a stable income or good credit history, consider applying for the loan with them as a co-applicant. This can increase your chances of approval and may lead to better loan terms.
Prepare Required Documents: Gather all the necessary documents, such as academic transcripts, admission letters, income proof, identity and address proofs, and any other documents requested by the lender.
Build a Good Credit History: Having a positive credit history improves your chances of loan approval. If you don’t have a credit history, consider applying for a credit card or small personal loan to establish credit.
Research Collateral Requirements: Some lenders may require collateral for larger loan amounts. If you have valuable assets like property or fixed deposits, it could strengthen your loan application.
Apply for Scholarships and Grants: Before taking out a loan, explore scholarship and grant opportunities. Scholarships and grants do not need to be repaid, reducing the overall financial burden.
Understand the Terms and Conditions: Read and understand all the terms and conditions of the loan before signing any agreement. Pay attention to interest rates, repayment schedules, and any hidden charges.
Apply Early: Begin the loan application process as soon as possible to allow sufficient time for processing. Some loan providers may take several weeks to approve and disburse the loan.
Seek Professional Advice: If you are unsure about the loan process, consider seeking advice from a financial advisor. They can guide you on the best options based on your individual circumstances.
Maintain Communication: Stay in touch with the loan provider during the application process. Promptly respond to any queries they may have to avoid delays.
Remember, taking out a loan is a significant financial commitment, so carefully assess your ability to repay the loan after completing your studies. Consider all options and choose a loan that best suits your needs and financial situation. With proper planning and research, you can secure the financial support needed to pursue your educational aspirations.
Frequently Asked Questions (FAQ)
What is a study loan?
A study loan, also known as an education loan, is a financial assistance program designed to help students finance their higher education expenses, including tuition fees, living costs, travel expenses, and other educational-related costs.
Who is eligible for a study loan?
Eligibility criteria vary depending on the loan provider. Generally, students with a good academic record who have secured admission to a recognized institution for higher studies are eligible. Some lenders may require a co-applicant, such as a parent or guardian, with a stable income or collateral.
What can study loans be used for?
Study loans can be used to cover a wide range of educational expenses, including tuition fees, accommodation, books, equipment, travel costs, and other related expenses.
Can I get a study loan for studying abroad?
Yes, many lenders offer study loans specifically for students pursuing higher education abroad. These loans may have additional features like forex facilities and pre-visa disbursals.
Do I need collateral for a study loan?
The need for collateral depends on the loan amount and the lender’s policies. Some loans, especially for larger amounts, may require collateral, while others may be offered without collateral for smaller amounts.
What is the interest rate on study loans?
Interest rates on study loans vary depending on the lender and the loan amount. It is essential to compare interest rates and choose the most competitive option.
When do I start repaying the study loan?
Repayment typically starts after the completion of the course or after a specified moratorium period. Some lenders may allow interest-only payments during the study period.
Can I get a study loan with no credit history?
Having no credit history may make it challenging to secure a loan, especially from traditional banks. However, some specialized education loan providers offer loans to students with no or limited credit history.
Are there any tax benefits for study loan borrowers?
In India, tax benefits may be available under Section 80E of the Income Tax Act for the interest paid on education loans. Borrowers can claim deductions on the interest paid during the repayment period.
Can I apply for multiple study loans at once?
Yes, you can apply for study loans from different lenders simultaneously. However, it is essential to manage your loan commitments responsibly and borrow only what you need.
What happens if I face difficulty in loan repayment after graduation?
If you face financial challenges after graduation, contact your loan provider immediately. Some lenders offer repayment assistance or restructuring options to help borrowers during difficult times.
Should I explore scholarship options before applying for a study loan?
Yes, it is advisable to explore scholarship and grant opportunities before opting for a study loan. Scholarships and grants do not require repayment and can significantly reduce the overall financial burden.
Before applying for a study loan, thoroughly research different loan providers, understand their terms and conditions, and consider your financial capacity to repay the loan after completing your studies. Seek professional advice if needed to make an informed decision about funding your education.
Studying abroad opens up a world of opportunities for Indian students, and education loans play a crucial role in making this dream a reality. The top education loan providers in India mentioned in this article offer reliable financial support, ensuring that deserving students can pursue their higher education aspirations without financial constraints.