Education loan for study abroad is undoubtedly the most reliable source of education funding in current times. In the wake of numerous foreign impositions including student visa sanctions and control on diverse student intake, the buck really stops at student financing. All because it’s the easiest method to control aspirants to cross borders and attain worthy education. Increase in academic fees across the globe reflects on the annual intake of diversity students. But students still apply for international institutions and get help from banking institutions via Student Loans to continue their studies.
However, students applying for studies abroad remain more concerned about the operational and procedural parts of Student Loan Application as compared to the services offered by the Study Abroad Loan providers. Questions like what documents are required for study abroad loan application, what is the general study abroad education loan procedure, what is the disbursement process, what are the best sources to get student loans for study abroad, still remain partially answered.
Here we have provided you with a brief outline of the application process of study abroad education loan procedure. This would help you to plan, mitigate, optimise, prepare for and get your student loans in a faster and easier way.
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Study Abroad Education Loan Procedure: Basic information required before applying
Domestic Education Loan and Study Abroad Education loan are fundamentally the same in their basic outlay. It’s the operational details that differ for student loans for Indians. Contrary to the popular belief that getting an International Student Loan is not easy, with renewed policies of Indian Banking Institutions and provisions of Subsidy for Study Abroad Education Loan, students now get these services with far less effort compared to older times. Study abroad education loan procedure differs in the documentation process, loan security options and transaction values. Here we have explained in detail the key steps of study abroad education loan application process.
Study Abroad Education Loan Procedure: Key Application Steps
Student financing for study abroad starts with planning for the student loans and ends with the closure of the loan. Students need to acquire complete details of all expenses to be incurred during the complete tenure of their international education. Many nations have schemes like Federal student loans study abroad (USA), HECS-HELP Loans (Australia), BAföG- Federal Training Assistance Act (Germany), Pradhan Mantri Vidya Lakshmi Karyakram (India) which provide vital student financing aid to native students. In India, students can get secure education loans for study abroad (Govt. Banks, PSU-Banks, Private Banks) and unsecured loans (Non-banking Financial Corporations, Credila, Auxilo, Avanse, etc.).
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Confirming Eligibility for Study Abroad Education Loan
What students don’t realise is that some of the best international student loans can also be availed from foreign banking institutions which provide loans to non-native citizens for global education. However, applicants are generally unable to discover such services on their own. We’ll give details about this source of student financing later in this article. Each of the loan providers (secured, non-secured, private international education loan lenders) have unique student loan eligibility norms and study abroad education loan procedure which students need to confirm before even considering them. Here are the details about what are education loan for study abroad eligibility conditions.
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Institution of Foreign Education
Students need to confirm the status of their institution ranking to check the limit of education loan amount that they can avail, the details of interest rates for study abroad education loan and documentation required.
AAAA+ institutions like the University of Oxford, University of Berkeley, Harvard University, Nanyang Technological University (NTU) can get student loans of up to ₹1.5 Crores and USD 300,000 (from international institutions); while A+ institutions like College of Law and Business, Israel and Utah State University may fetch you a student loan of up to ₹35 Lakh and USD 20,000 (from international banking institutions).
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Study abroad course eligibility for education loan
Eligibility is not defined only in terms of an institution but also the course that you’re applying for. Many banks do not provide education loan for study abroad to comprehensive training courses. Though such courses might have greater professional and academic value, they don’t fall in standard acceptable courses’ list. Check your course eligibility to get a higher value student loan.
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Financial eligibility for student loans
You might also need to check the study abroad education loan procedure for financial eligibility. This includes confirming the requirements of ITR, bank balance, financial subsistence, the source of loan repayment, financial credibility of student loan cosigner, guarantor and/or co-applicant. International student loans without cosigner are relatively a newer concept and students should consider them as last options while applying for admission to study abroad courses.
Study Abroad Education Loan Procedure: Application Process
Education Loan for Study abroad application process involves strong coordination between academic authorities, student loan lenders, international scholarship providers and immigration offices. The application process involves three stages which an international student has to go through, pre-application approvals, post-application approvals, and student loan agreement confirmation. Each of these steps is mentioned in detail below.
Study abroad education loan procedure: Pre-application process
This process generally involves research for appropriate education loan provider and submission of basic documents for loan consideration. The key points to consider during this process are:-
- The study loan for abroad pre-application process intends at the submission of loan request with KYC documents and financial proofs. Banks also ask for academic documents (exam scores, admission application, VISA application, collateral proofs, co-applicant expression of interest) at this stage.
- This process should ideally be started the moment a student gets their admission letter or conditional acceptance letter for study abroad.
- Students who get scholarships for studies at foreign institutions, also need to submit the required documents to substantiate their requirement of funds.
- Students looking for secured study abroad education loans are required to submit their immovable property documents or liquid asset documents as applicable for the approval of the loan.
- This process is followed by legal (asset and personal records) and official (academic, professional and immigration records) verification which helps in timely delivery of student loan amount.
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As an outcome of this process, one gets a conditional offer of loan approval from the banking institution, which can be used as ‘Proof of Funds’ while applying for Student VISA at various International Immigration Offices. Some international scholarships also require these approvals as proof to continue partial tuition fee assistance to the applicant. Most of such scholarship programs are research fellowships and project-based fellowships.
Study Abroad Post-Application approvals
After getting a conditional student loan offer helps in getting numerous confirmations from both academic institution and immigration offices. Students need to go through the process of VISA application and admission confirmation now to get the education loan. This involves:-
- Getting an admission confirmation letter from the foreign academic institution
- Students getting study abroad financial aid, federal student aid, or any other scholarship/fellowship, need to get an award certificate/letter to proceed with loan approval
- Students now need to complete their VISA application process and submit their VISA approval forms to the bank
- They also require to complete the property inspection, asset validation and employer verification (if applicable for F-1, H1B and J-1 Visa applicants)
- At this juncture the cosigner, co-applicant plays an important role, when a formal and binding consent form is signed by him/her towards the loan security.
- For unsecured student loans, this process is wavered and replaced with mandatory (optional in some cases) Loan Insurance Application, which ensures that your loan gets repaid in any unintended circumstances.
As an outcome of this process, the student is able to get a Study Abroad Education Loan Approval which they can now practice to have their funds disbursed and submit to their academic institution for final verification/alignment of payment cycles.
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Study Abroad Education Loan Procedure- Loan Agreement Stage
This is the most swift step and yet most crucial step of the complete education loan for abroad application process. This key step involves:-
- Education Loan agreement countersigning, loan insurance countersigning (if applicable), and education loan sanction letter issue
- Declaration of loan repayment EMIs, submission of loan disbursal calendar, and coordination with school/college/university for scholarship-loan amount management
- Submission of ECS mandates for EMIs and lien (liability) declaration for applicant and co-applicant
- Submission of demand letters from college/university and receipts of academic fees submission
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Study Abroad Education Loan Procedure- After Application?
Now that you know how to get education loan for study abroad, you must beware that the application process does not end here. Study Abroad Education Loan subsidy applications and loan maintenance comes after these standard steps only.
Education Loan Maintenance
Education loan for study abroad maintenance is all about continuing to pay EMIs and maintaining academic value enough for the banking institutions to keep funding your academic fees requirements. This process involves little oversight from the loan applicant. The key points of education loan maintenance are:-
- Education Loan pre-payment/part-payment– Education Loan EMIs are fixed but students can choose to pre-pay their loans in advance if they gather consolidated funds. Some banks and private institutions charge a nominal fee for pre-payment or part-payment.
- Academic Maintenance- Every banking institution has certain academic requirements for students to get foreign enrolled loans. Students need to submit their scores regularly for continued financial aid.
- Education Loan Cosigner management/ refinancing/ consolidation: Students who wish to change or remove (if allowed by the bank) their cosigner undergo special processes to do so. Students who are unable to repay their education loan in time and wish to continue their education loan can have it refinanced or consolidated with other education loans for abroad options.
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Education Loan Subsidy Application
Indian students are provided education loan subsidy benefit by Indian Government bodies like the Ministry of Human Resource Department (MHRD), Ministry of Social Justice and Empowerment and Ministry of Minority Affairs (MOMA). Students can apply for these subsidies and avail student loans at reduced interest rates or paid interest compensations. Some popular schemes for Study Abroad Education Loan Subsidy are:-
Dr. Ambedkar Central Scheme of Interest Subsidy on Education Loan for Overseas studies for OBC & EBC
- For OBC students from economically weaker sections
- Provides compensation of interest paid towards education loan for overseas studies
Padho Pradesh Central Scheme of Interest Subsidy for Minorities
- For minority communities like Jain, Parsi, Muslim, etc., from economically weaker sections
- Provides compensation of interest paid towards study abroad education loan
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Education Loan for Study Abroad Experts and Scholarship Guidance
Students applying for studies at foreign institutions are always occupied in one or the other official tangle. In such situations, processes of education loan for study abroad invite undue stress. In such situations finding an institution that takes over the complete process and coordinates between departments become very necessary. Also, student loan experts provide students with required guidance and counselling to make the best out of this process.
Did you know that students can apply for scholarship adjustable education loans from Indian Education Loan Experts? Visit our website to know more about scholarships adjustments for loan repayment.
Buddy4Study Edu Loans collates the best of the services provided by multiple education loan lending organisations. This helps students to discover international student loans as bundled services of customized schemes. Students get to discover student loans and experience the low turn-around-time, interest rate negotiation, scholarship and application support to apply for elite institutions and achieve their study abroad dreams. In the next series of information articles, we’re going to provide you with more details about Study Abroad Education Loan Procedure, Step-by-Step Education Loan for Study Abroad guide and student financing options apart from loans. In the meanwhile, we wish you good luck for your exams, admission applications and scholarship applications. Happy Learning!