Education loans make studying abroad possible for many Indian students, helping them manage the high costs of tuition, living expenses, travel, and other fees.
With proper financial planning, students can pursue their dreams without financial stress.
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Higher education abroad provides better learning, career opportunities, and global exposure.
However, studying at international universities can be expensive. Student loans help cover these costs, allowing students to focus on their studies.
Types of Student Loans
Education loans for studying abroad are mainly of two types:
Secured Loans: Require collateral like property or fixed deposits. These loans have lower interest rates and flexible repayment options.
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Unsecured Loans: Do not require collateral but have higher interest rates and shorter repayment periods. Loan approval depends on the student’s academic record, future earning potential, and co-applicant’s financial status.
Key Features of Student Loans
What It Covers: Loans cover tuition fees, living expenses, travel, health insurance, and study-related costs.
Loan Amount: Banks and financial institutions offer loans from Rs 10 lakh to Rs1.5 crore, depending on the university, course, and country.
Interest Rates: Vary between 8% and 15% per year, with public banks offering lower rates than private lenders.
Repayment Period: Includes a moratorium period (grace period) of course duration plus 6-12 months before EMI payments start. The total repayment tenure can be 10 to 15 years.
Eligibility: Students must have admission to a recognized foreign university. Loan approval depends on the student’s academic record and the co-applicant’s financial background.
Processing Time: Loan approval and disbursal take 2-4 weeks, depending on the lender and required documents.
Documents Needed for a Student Loan
To apply for a loan, students need:
1.Admission proof (offer letter from the university)
2. KYC documents (passport, Aadhaar, PAN card, etc.)
3. Academic records (mark sheets, degree certificates)
4. Co-applicant’s income proof (salary slips, tax returns, bank statements)
5. Collateral documents (for secured loans)
6. Estimated cost of education (provided by university or consultants)
Loan Repayment & Tax Benefits
EMI payments start after the moratorium period ends.
Some lenders allow early repayment without extra charges.
Tax benefits: Under Section 80E of the Income Tax Act, students can claim tax deductions on interest paid for up to eight years.
Taking an education loans is an investment in your future. With careful planning and the right financial support, students can study abroad without financial stress.
It is important to compare loan options, understand repayment terms, and check for scholarships before making a decision.
By choosing the right loan, students can take a confident step toward their academic and career goals.