Key Things to Check Before Applying for an Education Loan for Abroad Studies

Higher education costs and a limited budget are two major hurdles for students planning to study abroad. This is where a study loan can help aspirants afford their higher education in a foreign university. An education loan will help students manage their college expenses and build a foundation for a successful career in the future. Those who are eligible can apply for the loan for themselves, their children, or their spouse. Also, parents and legal guardians of a student can take a loan to fund their child’s studies. However, different banks and NBFCs have diverse terms and conditions regarding the loan amount, loan tenure, interest rate, etc. Here are some important things to check before applying for an education loan for abroad studies. 

Loan Amount

Before checking loan providers, you first need to assess your requirements and be certain about the course you want to enrol in. The cost evaluated should cover all major expenses, including course fees, college and hostel charges, and the cost of books, laptops, and other equipment. Most financial institutions provide loans between 10 to 25 lakh for both domestic and international colleges. However, you should compare the loan amount offered by various lenders in the market.

Interest Rate

When applying for an education loan for studying abroad, the interest rate should be a major consideration, as it will impact the total amount you repay to the lender. The interest rate of student loans can vary from bank to bank, depending on students’ eligibility, loan amount, and tenure. Students should select the lowest interest rate possible since it will determine their financial responsibility for the specified years.

Eligibility Criteria

Remember, abroad education loan eligibility varies in all banks and NBFCS. So, it's vital to check all your options and loan eligibility before choosing the best loan for you. For students, eligibility criteria for a loan depend on various aspects, such as the loan type, accreditation of the selected course, financial institution, future earning potential, and academic profile of students. If a student applies for a higher loan, they need to pay a margin amount to the bank upfront. Please ensure you are informed about the margin charges prior to applying for a loan.

Repayment Period

Most loan providers offer multiple repayment options and diverse loan tenure, allowing students to choose one as per their convenience. You can start repaying the loan amount from the time you are in college through a part-time job, or once you complete the course and get a job. Select a lender that provides you with proper time to repay the amount. Also, look for a financial company that allows students to repay the amount without forex conversion cost in case of a loan for studies abroad.

These are some of the most important things to check when applying for an education loan. Make sure to research, compare and select the best student loan with an attractive interest rate to avoid any extra financial burden in the future.