Categories: Scholarships

How to use education loan to study abroad?

The frequency of Indian students opting to study abroad is growing exponentially every year. The key reasons are exposure to internationally acclaimed education platform, better opportunities to learn while exploring a different culture, improved career opportunities, and amazing life experiences. No matter why you want to pursue your education abroad, the major concern that arises is how to manage the cost of education there.

Of course, as compared to education in India, the cost of education in countries such as US, UK, Canada, Australia is higher, that can even burn a hole in your pocket. In this scenario, a scholarship or an education loan can turn out to be a great help to students who really want to go ahead in their career. Since most of the internationally known universities offer a limited number of scholarships for students getting an admission there, many students have to rely on the option of education loan for pursuing their studies abroad.

Getting an education loan

Most of the financial institutions available in India offer education loans not only to study in India but also outside. Being a student, you need to know about all the possible aspects of study abroad education loans including the application process, the list of documents to be submitted, the rate of interest, the leading institutions offering education loan to study abroad and more.

Once you are aware of everything about the education loan, you can pursue your dream career abroad of your choice without any financial constraint. Here’s what you can do to get an education loan –

  • Make sure you have a confirmed offer of admission to study at the University you want to study in.
  • Consult the banking institution offering the lowest rate of interest for education loan application.
  • Be prepared with all the supporting documents to ensure hassle-free loan application.
  • Wait for the banks/financial institutions to process your application. Ideally, the processing time may range from 1 week to 2 weeks.

Also Read: How to Apply for an Education Loan: All you need to know

What does it cover?

An education loan to study abroad prominently covers the following:

  • Tuition fees of the course opted for
  • The cost of hostel, accommodation, laboratory, library, and examination
  • The cost of purchasing uniform, instruments, equipment, and books
  • Travel expenses (not necessarily)
  • Project work, exchange programs, and study tours

Also Read: Top banks offering education loans

Essential considerations

Before you head on to apply for a study loan to acquire an education abroad, you need to ascertain that you have sufficient funds or resources to repay the loan as well. Of course, every financial institution which lends an education loan expects that all the borrowers are capable of repaying the loan with interest on time. Also, they approve a loan only if they find the applicant competent enough for the repayment.

In this scenario, here are the few considerations that you need to make –

  • You have a strong co-applicant who is capable of repaying your loan. The co-applicant can be a sibling, parents or a spouse.
  • If the loan amount is between INR 4 Lac to INR 7.5 Lac, you need to a third-party guarantor for approval.
  • For loans above INR 7.5 Lac, the students need to provide collaterals too.

Also Read: How to repay your education loan? 

Since the education loan covers most of your expenses abroad, you just need to carry all your belonging with you to pursue your aspirations. Having said that, it is advisable for you to make prior arrangements before taking off to a new destination.

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