Education Loan Eligibility for Study Abroad- Academic & Financial eligibility

Education Loan Eligibility for Study Abroad– One of the main reasons for any student loan application to be rejected is eligibility criteria default. Student loans for study abroad require more verification and background check as compared to domestic education loans. The domestic education loan eligibility criteria are relatively flexible, which helps Indian students a lot. But, the uniform student loan eligibility criteria for national and international institutions makes it tough for study abroad aspirants to get education loan easily. Students should also consider that the eligibility criteria for education loan to study abroad depend on the type of education loan and the lending institution (NBFC, International Finance Institution, Govt. Bank, etc.). Sometimes, there are loan qualification norms which apply to banks but not to other education loan lenders. Here in this article, we have listed the various key points to remember about education loan eligibility for study abroad.

Education Loan Eligibility for Study Abroad – Key Categories

There is a common misconception between education loan eligibility and documents required for education loan to study abroad. Students often consider that if they have all the documents required than they have cleared the eligibility criteria. However, there are some eligibility conditions which require compliance not documents.

Case Study: The Curious Case of Cosigner Criteria for Eligibility

Application Requirement: The study abroad education loan eligibility criteria for International private lenders requiring students to apply with a cosigner is a condition for education loan procedures.

The Truth: There is no document required to fulfil this eligibility criterion for the student loan application.

The Exception: So, even if the student has got all the necessary documents required for student loan application but not the cosigner; he/she cannot apply for an international private student loan.

ALSO READ: EDUCATION LOAN FOR STUDY ABROAD-HOW TO APPLY?

In light of this information, students should know about education loan eligibility categories first and criteria later. Applicants need to present only proofs of academic status and financial status for any common education loan application. Since education loan for study abroad includes extra verification and vetting, there are additional norms. These loan eligibility norms include visa application, admission acceptance eligibility, and forex criteria as well.

Following is a list of education loan for study abroad eligibility categories. As a cautionary note, a student must keep in mind that not all of these categories apply to every type of loan and thus, an applicant does not need to fulfil all these criteria. Selected categories of eligibility are followed by the various lender based on the loan type and lender type.

Education Loan Eligibility Categories

Academic Eligibility Criteria:

To apply for a student loan to study abroad, students need to have a strong academic background. Banking and non-banking institutions prefer candidates who have a creditworthy qualification and a post-qualification financial viability. These factors are decided from the merit of the course that students wish to apply for and the institution where they are applying for admission. Students with International Scholarships and Fellowships are preferred under this eligibility criteria. The major factors included in this education loan eligibility criteria are:-

Academic Institution

Depends on QS ranking
Or on Average Course Rating which ranges from AAAA+ to A
Special eligibility: Partner colleges/universities of respective banks

Academic Course

Depends on the current trends of post-qualification job probability
Courses are also range from AAAA+ to A rating
Influences the student loan rate of interest against the loan amount borrowed

Financial Eligibility Criteria:

Student loan applications are reviewed on the basis of both collateral/guarantee value and availability of funds/source of funds to repay the education loan for study abroad in due time. Not all lenders emphasize on financial basis of education loan eligibility in the same way. Some require collateral to be submitted for the study abroad loan, while some require a credit-worthy cosigner only.

Following are the common factors checked for financial eligibility criteria of student loan.

Collateral based financial eligibility criteria

Availability of immovable or security-based assets against a percentage or complete value of the loan amount
Influences the cumulative amount of student loan which can be sanctioned

Security based financial eligibility criteria

Can be satisfied with the availability of a credit worthy-cosigner for International Private Student Loans. A creditworthy cosigner is defined as:-
- Direct/Indirect relation or acquaintance from the country where the applicant wishes to pursue education with student loan
- Cosigner must have valid citizenship or registered alien records from the country’s central government
- Cosigner must have a valid taxation record and permanent job/business related income flow
Can be satisfied by a third-party guarantee from the personal banking institution of the applicant. No requirement or partial requirement of collateral in such cases.
Influences the amount of loan and refinancing possibilities for a student loan applicant
Some exclusive organisations also provide student loans for international students without cosigner. Such lenders have case based eligibility criteria for student loans.

ALSO READ: EDUCATION LOAN: EVERYTHING YOU /NEED TO KNOW

Identification and Personal Eligibility Criteria

Student loan applicants sometimes face the criteria of identification required for determining the viability of loan. This means that in some cases of nationality, region and identity-based conditions, the students may not be able to apply for loans or might get additional benefits against their application. These education loan eligibility criteria based on student identity include:

Nationality based education loan eligibility

Indian Banks only provide study abroad education loan to permanent Indian nationals
Foreign Federal Loans for Education commonly referred to as FAFSA can be availed by PIOs and applicants who fall under the category of ‘Eligible Non-citizens’

DACA based international eligibility

Students who are of Indian origin but have been victims of illegal immigration or similar circumstances can also apply for foreign student loans outside the country
Might only apply to the USA or some EU nations

Employee/Non-Employee Education Loan Eligibility

Some banking organizations do not provide education loans for study abroad to direct or indirect relatives of bank employees
Eligibility undertaking has to be signed in such cases that the applicant does not falls under this category

Institutional Eligibility Criteria

One distinct feature of international student loans provided by any kind of lender (domestic/private, bank/non-bank finance, secure/unsecure education loans) is that they need additional institutional sanctions. The details of education loan eligibility based on institutions are:-

Student Acceptance Eligibility

This is proof of the applicant being accepted by the foreign institution as an immigrant student under approved conditions
Generally includes I-20 Form for USA Institutions, CAS Letter for EU institutions, CoE for Australian institutions, etc.
Scholars with International Scholarships for Study Abroad must show requisite proofs under this eligibility criteria
Common education loan eligibility calculators do not account for this condition

VISA Acceptance eligibility

Most banks lead to a successful student loan agreement only upon submission of VISA acceptance proofs
Also helps in availing post-visa, in-flight expenses loans

Student Loan Subsidy eligibility

Not all students are aware about the study abroad education loan subsidies; which makes them lose the opportunity to save extra interest expense. The banking institutions provide both education loan subsidies under government schemes and their organizational offers. Here are the details about education loan eligibility for subsidies.

Religion/Caste based subsidy eligibility: allows a specific section of society to be subsidized for payments against education loan in various modes
Economic Level based subsidy eligibility: allows economically weaker sections (as defined by the lender) to get concessions on installments or international student loan interest rates
Gender based eligibility for student loan subsidy: some banks provide subsidies to female applicants for study abroad education loan. Some banks also have provisions of subsidies for transgender applicants as well.
Merit based eligibility for education loan subsidy to study abroad: students who continue to perform better or have shown extra-curricular excellence are also provided a subsidy. This factor varies from bank to bank and is not mandatory for the lenders of education loan.

ALSO READ: EDUCATION LOAN SUBSIDY: COMPLETE GUIDE

Student Loan Eligibility for Various Lending Institutions

All these education loan eligibility criteria do not apply to all lending institutions. Most Indian banks have relatively stringent eligibility conditions for education loan to study abroad, while non-banking financial corporations like Auxilo and HDFC Credila have relatively relaxed norms.

Here we have listed the eligibility criteria of student loans based on the kind of lenders opted by the applicant.

Education Loan for Study Abroad Eligibility Criteria for National Banks/Private Banks (Domestic) and Non-Banking Financial Companies (NBFCs)

Private Banks and National Banks like SBI, Punjab National Bank, HDFC, Bank of Baroda provide secured loans to students for study abroad.

Benefits of secured education loans include reduced international student loan interest rates, longer student loan repayment periods and quick turn-around-time for disbursements to educational institutions. Unsecured student loans do not come with the obligation of collateral and are, thus, considered risk based loans.

The key education loan eligibility requirements from domestic banks are:

Eligibility Criteria of Student Loans obtained from Banks (National or Private)
Type of Eligibility↓	Details of Education Loan Eligibility
Academic Eligibility	Private and national banks only provide student loans to study abroad for AAAA+ to AAA institutions Each Bank has its own list of approved institutions Education Loan eligibility courses include professional degree studies like Engineering, Medicine, Management, Law, etc., which are eligible for international loans Academic Courses like literature, liberal arts, archeology, etc., are not eligible baring some special circumstances No banks offer exam preparation loans so students should have passed their previous qualifying examination (12^th, Graduation, Post-Graduation)
Financial Eligibility	Banks only provide secure loans so, collateral in form of immovable asset (non-agricultural land, residential, commercial property, flat, etc.) Movable assets in form of liquid investments (equity, shares, FDs, RDs, Bullion bonds, Govt. Bonds etc.) are eligible for student loans to study abroad Some banks allow third party guarantee in special cases Proven tax records or bank statements to showcase education loan repaying capability also fall under critical education loan eligibility criteria
Identification Eligibility	Banks require students to be permanent Indian citizens It is mandatory to have a credit-worthy co-applicant for Indian Banks to get a student loan General KYC eligibility applies to all banking institutions for all student loans
Institutional Eligibility	Banks in India require an unconditional admission offer letter* to proceed with education loan Applicants are must prove visa acceptability to be eligible for a student loan from banks
Subsidy Eligibility	Based on Government schemes for minorities and Economically Weaker Section (EWS) applicants Minority based subsidy requires students to submit the relevant proofs Gender based internal subsidies require students to submit relevant proofs

*Unconditional Offer Letter

Unconditional Offer Letter is a document from the admission office (or relevant authority) of the respective international institution/college/university stating that the student has got a confirmed seat for higher education course. Most institutions require students to pay a standard admission fees which is a portion of tuition fees to confirm the admission. But some institutions provide these documents without paying any fees as well. However, in either situations it is necessary that the student completes all the other admission formalities like visa/immigration, health insurance, admission acceptance (I-20, CAS, or equivalent) etc.

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Similarly the key study abroad education loan eligibility requirements for approval from NBFCs in India are:-

Eligibility Criteria of Student Loans obtained from Non-Banking Financial Companies (NBFCs)
Type of Eligibility↓	Details of Education Loan Eligibility
Academic Eligibility	NBFCs may provide student loans to AAAA+ to AA institutions Education loan eligibility courses are based on post-qualification income potential. Thus some courses which are not eligible for Banks are eligible for NBFCs like Nursing, Aviation, Literature, etc. NBFCs may provide pre-admission student loans and exam preparation student loans. So students do not need to clear the last qualifying examination for student loans from NBFCs. However they do check past academic records to verify the credibility of such loan
Financial Eligibility	NBFCs provide unsecured loans as well, so no necessity of collateral NBFCs have country specific collateral requirements as well. Applicants may or may not be asked for collaterals depending on the country where they wish to study.
Identification Eligibility	NBFCs require co-applicants for education loan to study abroad Co-applicants for student loans can only be Primary or Secondary Direct Relatives^# Co-applicants must also be Indian Citizens General KYC requirements apply to both applicant and co-applicant of student loans to study abroad
Institutional Eligibility	Students can also apply for NBFC Loans for Study Abroad with a ‘conditional offer of admission*’ as well NBFCs offer Pre-visa student loans to students who have unconditional offer of admission from ranking universities
Subsidy Eligibility	With NBFCs, students cannot apply for central government or state government schemes of education loan subsidy for study abroad like the Padho Pardesh Scheme For internal subsidies students need to follow the requisite gender or economically weaker section criteria

#Primary Relatives: Parents, Brother and Sister

#Secondary Relatives: Spouse, Parents-in-law

*Conditional Offer of Admission:

Students applying for admissions to international universities may get a conditional offer of admission which declares that your profile has been accepted for admission, under consideration that you complete all the other mandatory admission processes like fees payment, student insurance, visa approvals, etc. The conditional offer letter may or may not be provided before giving proof of funds or paying the standard admission fees (which is a part of actual tuition fees). Some institutes help students in getting education loan and visa by providing them with the conditional offer letter before any other verification while some have relatively tough rules.

Education Loan Eligibility Criteria for International Private Student Loan Providers

Finance options for Indian students are not just limited to Indian banks and non-banking institutions. International lenders provide non-native students (Indians) with education loan for abroad studies without collateral and other obligations. Such student loans have multiple benefits like helping one create an international credit score, and escaping the forex commissions for fees submission.

The eligibility of these student loans is more-or-less the same as domestic bank norms with some exceptions. We have listed below the distinctive eligibility points to consider before applying for a private international student loan from a foreign lender.

Eligibility Criteria of Student Loans obtained from Non-Banking Financial Companies (NBFCs)
Type of Eligibility↓	Details of Education Loan Eligibility
Academic Eligibility	Eligible for all courses offered by any international universities/colleges/institutions No pre-visa, pre-admission student loans available; but students who have secured admissions are eligible for foreign remittance loans, and in-flight loans
Financial Eligibility	No collateral required, thus any student accepted at a foreign institution can apply for a student loan No-third party guarantee required unless the applicant is requesting to refinance international student loan Refinancing student loan requires co-applicant, third-party guarantee (which can be in the form of previous lender’s consent)
Identification Eligibility	A native co-signer is mandatory for the application with a private international student loan lender Co-signer must be a permanent resident of the country where the applicant wishes to study with the loan amount Student loan co-signer must be a creditworthy taxpayer (as per bank records and tax receipts) General KYC conditions also apply for these loans Some international private student loans without co-signer options are also available for Indian studaent, the eligibility criteria for these differ on case-by-case basis.
Institutional Eligibility	Students can get loan approval with/without conditional/unconditional admission offer letter for study abroad Students are eligible for a loan only after they have complete visa approvals and immigration approvals (I-20, CAS, etc.)
Subsidy Eligibility	Students are not eligible for any Indian, foreign or private subsidy with these lenders

Education Loan for Study Abroad Eligibility Criteria: Federal Loans (FAFSA) and other International Govt. Student Finance Aid

Indian students are also eligible for federal student aid provided by the USA Department of Education and other financial aid programs offered by countries like Australia under special conditions. Such programs offer comparatively easier student loan repayment norms. Students in India applying for international admissions in U.S.A are often requested to fill FAFSA® (Free Application for Federal Student Aid) even if they are not eligible for any such aid. Following are the special education loan eligibility criteria under which students from India may apply for FAFSA and other international federal or government aid programs for higher education.

Students registered as ‘Eligible Non-Citizens’ (in the U.S.A) or equivalent (in other nations) may apply for government education loans
Eligible non-Citizens category in U.S.A includes Indians with Permanent Resident Card I-551, or Conditional Green Card I-551C
Other countries allow Indian students to pursue government education loan facilities against permanent or conditional resident status commonly known as a green card or PIO (Person of Indian Origin) or OCI (Overseas Citizenship of India) status in India
Eligibility applies to any educational institution and all courses of the foreign country
Victims of Violence Against Women Act (VAWA) or their descendants, commonly resulting from an inter-nationality marriages are also eligible for federal education loan facilities in the U.S.A.
Students falling under Deferred Action for Childhood Arrivals (DACA) category may not be able to apply for Federal Student Aid but they may apply for State and College Aid programs offered in the U.S.A.

Even the best education loan eligibility calculators cannot assist students with their DACA or I-551 eligibility. That is why aspirants prefer to apply for study abroad student loans with the help of education loan experts.

Student Loans Provided by Study Abroad Admission Experts

Apart from all these options of getting a student loan, applicants can approach various study abroad experts to get customized services. Financial aid provided by these organizations are personalized as per student requirements. These lending institutions do not have variable criteria of eligibility for education loan to study abroad. Students at any academic stage (12^th pass, graduation or post-graduation) may avail the services of Study Abroad Admission experts. Students can apply with or without collateral, co-applicant, co-signer for education loan as these experienced organizations negotiate terms with various lenders on behalf of the applicant. Indian students can find lower education loan for abroad studies interest rates and even scholarship adjustable loans with such service providers. Study abroad scholarships for international students help aspirants adjust payment towards installment of education loans.