How to get student loans for studying abroad

In general, most Indian banks offer the IBA Student Loans for studying abroad scheme to help finance your higher studies. The IBA education loan model requires all student loans above INR 7,50,000 to be secured by collateral, such as a mortgage of similar value.

Additionally, many banks and financial institutions offer their own study abroad loans product with specific terms and conditions. Some also offer collateral-free options for students pursuing higher education in qualifying premier institutes abroad. When it comes to smaller amounts for the purpose foreign education bankers would often suggest to take a personal loan as it can be secured without a collateral, the downside is no moratorium period. Not ideal for students but if the family or sponsor can pay the interest and the student is wiling to pay the principal upon graduation with the help of post graduate employment, this can be an option for students wanting 10-15 lakhs INR and do not have any collateral to provide.  

The application requirements, processing fees, and repayment terms for student loans vary from one financial institution to another. Many of them require borrowers to contribute a margin (or a down payment) on a pro-rata basis - which can be covered by scholarships earned by the student. But there are also providers with no collateral or margin requirements, and instead evaluate your loan application based on future earning potential.

In most cases if the university has a good ranking and 85% coverage is easy to secure. This is not note here that no SEBI registered bank will cover 100% on a student load. Here again if a personal loan is to be taken the student can get 100% coverage as compared to student loans. 

The IBA scheme has no set minimum or maximum for student loans. However, individual bank policies can have loan ceilings according to their lending policy norms. Each bank has a system of measuring how good the college you are getting into is. 

The banks usually see for employability and use a matrix of a lot of factors to decide your student loan cap. It predominantly depends on your major, your grades and your university. These three factors can overpower financial factors. Banks are going to invest on a good student regardless, so if you do not have the best financial resources don't panic, just work hard academically and you will find a way to fulfil your dreams. Student loans are generally intended to cover the entire expenditure of the student while studying abroad.

Student loans for studying abroad are available for Indian students pursuing graduate and post-graduate programs, and technical courses in recognized universities and professional institutions overseas. These courses can include:

• Bachelor’s degree programs
• Master's degree programs
• Medicine
• Law
• Business and management programs such as MBAs
• Accounting courses such as CIMA-London or CPA-USA.
• Skill development training in performing arts, fashion, and design.
• Other Job-oriented professional or technical courses.

Many banks may also require an insurance policy to be in place to get a loan, with the ability to roll the premium into the loan cost.

Study abroad loans are available to finance university fees and educational expenses such as the cost of books and laboratory equipment. 

In addition, many providers also cover flight expenses for your travel to the foreign country, and everyday living expenses such as hostel accommodation.

Borrowers are eligible for the loans only after being accepted as a student at the university or institution. But you may be able to request a provisional loan sanction letter if you need to demonstrate any proof of funding before, such as with the I-20 form for universities in the US.

Note that the university fees are generally paid directly to the university while living and other expenses are credited to the student's account overseas.

 To manage your everyday expenses, opening your account is one of the first steps you’ll need to explore when you arrive abroad for your studies. 

Indian students exploring ways to finance their dream of studying abroad have several options for student loans. Students from low-income families and socially disadvantaged classes can benefit from government schemes. Many of India’s public and private sector banks offer student loans for students intending to pursue higher education abroad. There are also many private companies, within India and abroad, which cater to students from India. Some students may further consider personal loans, or take out a loan against property. The crux is that there's a loan out there for you, all you need to do is get in touch with experts like us and learn as much as you can about it. Once you have done your research the answer of which student loan is suited beat to you will automatically appear Infront of you. 

Each option has its own requirements and costs involved, and that, too, varies based on the provider. Here we’ll go over these options, and review some of the top providers under each category.

Indian students who have secured admission to a recognized study abroad program are eligible to apply for student loans from banks and other financial institutions. It is important to note that, in general, one's household income is not the primary factor that determines loan eligibility, except for certain government schemes. However, it is crucial to ensure that your overall application is strong, as this can impact the likelihood of loan approval and the interest rate offered. 

A student’s profile is one of the major factors in eligibility for a loan, whether at a bank or other financial institution. Loans qualifying for government subsidies and schemes have specific qualifying criteria depending on the specific scheme. Here is an overview of general eligibility criteria:

• Indian providers require that the student is an Indian national.
• You must have completed high school and meet any additional academic requirements based on the overseas education program you are interested in.
• Since most students will not be employed, loan applications may require a co-applicant who can be a family member with a regular income source.
• The student must have secured admission to the foreign university, college, or institution and cleared any qualifying examination required for the program.

Ones you clear this checklist you enter a pool of students who are all looking for study abroad loans, now the challenge is to secure one, as a decent number of students are left behind at times due to lack of planning and research.

We suggest that you as a student should plan ahead as lack of planning can postpone plan or worse, so many students fall prey to local loan sharks and end up owing a lot more. If you can not understand how to proceed or would like additional help on the topic contact the experts at Godwit International Vadodara. 

Since most student applicants may not have regular income sources, education loans typically require parents, guardians, or other family members to join as co-applicants or guarantors to the loan. Under such circumstances, banks can seek information about the co-signers or guarantors regarding their income, assets, liabilities, and credit rating. Some banks will insist on this person being unrelated to you by blood.

Another way providers reduce the risks of lending is by requiring collateral. Banks’ individual programs may have different requirements, but collateral can be accepted in the form of fixed deposits or property mortgages. Any asset that the bank and seize upon failure of payment and recover their loss can be considered a collateral or security. 

Generally, the applicant’s income is not a qualifying basis for an student loan; instead, banks look at the future earning potential of the student. This is why students enrolling in prestigious universities do not always need to provide collateral for loans.

For student loans up to INR 4,00,000, no down payment is usually required. However, if the loan amount is higher, a margin payment from the student may be necessary. This is usually 15% of the total ask. Scholarships can be factored into the margin calculation. Moreover, applicants have the option to pay the margin proportionally at the time of each disbursement. i.e. if the total margin amount is 1 lakh INR and the bank gives out the student loan in 4 disbursement, you can pay 25,000 INR at the time of each disbursement instead of 1,00,000 INR all at once. 

The processing fees for student loans depend on individual banks and financial institutions. For example, the loans under the IBA student loan scheme do not have any processing fees, but other loan programs from Indian banks have differing fee structures, depending on the lender, the loan amount, and the collateral value.

Additionally, applicants have to cover the costs of any collateral audit, which includes evaluating the property and verifying the title deeds.