Student Loans to Study Abroad: Interest Rates, Documents, Eligibility and Process

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Pursuing higher education abroad is a thrilling opportunity for Indian students to gain world-class knowledge, broaden their horizons, and, of course, collect an enviable collection of fridge magnets. However, financing this global adventure can be as challenging as finding the perfect selfie spot on your first day of college. Fret not, for we have compiled a list of education loan options for Indian students, complete with all the essential details, so that you can focus on packing your bags and planning your itinerary.

In this blog:

1. Government and Private Banks
   1. State Bank of India (SBI)
   2. HDFC Bank
   3. Punjab National Bank (PNB)
2. Non-Banking Financial Institutions (NBFCs)
   1. Avanse Financial Services
   2. Prodigy Finance
   3. MPOWER Financing
   4. Paras Education Loan Foundation
   5. Other Options

Government and Private Banks

A. State Bank of India (SBI)

SBI Global Ed-Vantage scheme is like your academic fairy godmother, making your international education dreams come true. Covering tuition fees, accommodation, books, and even that occasional pizza party, this loan offers up to INR 1.5 crore with a repayment period of up to 15 years. Interest rates are competitive, and the moratorium period extends until the course duration plus six months. SBI requires a minimum of 15% margin from the student and collateral security. They even provide a loan sanction letter to support your visa application.

B. HDFC Bank

HDFC Credila Education Loan offers tailor-made financial solutions to transform you into a global scholar. With loan amounts up to INR 20 lakhs, flexible repayment options, and coverage of tuition, living expenses, and other related costs, you’ll feel like a VIP student. The moratorium period covers the course duration and six additional months. HDFC requires a co-applicant and collateral security, depending on the loan amount. A loan sanction letter is issued pre-visa to strengthen your application.

C. Punjab National Bank (PNB)

PNB Udaan Education Loan Scheme is like a financial trampoline, helping Indian students soar to new academic heights abroad. Offering loans up to INR 40 lakhs, repayment tenures of up to 15 years, and competitive interest rates, this loan ensures a smooth academic journey. The moratorium period is equal to the course duration plus one year. PNB requires collateral security and a 15% margin for loans above INR 4 lakhs. A loan sanction letter is provided for visa purposes.

Also read: How to get a loan with a low CIBIL score?

Non-Banking Financial Institutions (NBFCs)

A. Avanse Financial Services

Avanse Financial Services is the friendly next-door neighbor of the financial world, providing customized education loans for Indian students studying abroad. The loan covers tuition fees, living expenses, and other costs, with amounts up to INR 40 lakhs. The moratorium period includes the course duration and six additional months. Collateral security is required for loans above INR 7.5 lakhs, and a loan sanction letter is provided for visa applications.

B. Prodigy Finance

Prodigy Finance is like the superhero of international education loans, catering exclusively to Indian students pursuing postgraduate studies abroad. This unique platform offers loans based on your future earning potential rather than your current financial status. With coverage of tuition fees and living expenses, loans up to 100% of the cost of attendance, and a repayment period of up to 20 years, Prodigy Finance makes studying abroad a breeze. There is no collateral, co-applicant, or guarantor required, and they even issue a loan sanction letter for your visa application.

C. MPOWER Financing

MPOWER Financing is the friendly global mentor for Indian students seeking loans for undergraduate and graduate studies in the US and Canada. This innovative platform provides unsecured loans, meaning no collateral or co-signer is needed. Offering loans up to $50,000 (undergraduate) and $100,000 (graduate) per academic period, with competitive interest rates, MPOWER Financing supports tuition fees and living expenses. The repayment term extends up to 10 years, and a loan sanction letter is provided for visa purposes.

D. Paras Education Loan Foundation

Paras Education Loan Foundation is like a guiding star for Indian students seeking financial assistance to study abroad. This foundation provides interest-free loans to deserving students, making higher education more accessible. With a focus on funding undergraduate and postgraduate studies, the foundation offers loan amounts based on individual needs and circumstances. Collateral or co-applicants are not required, allowing students to pursue their academic dreams without the burden of high-interest loans.

E. Other Similar Options

Besides the aforementioned loan options, Indian students can explore various other financial institutions, non-profit organisations, and foundations that offer education loans for studying abroad. Some of these options include:

• Indian School of Business (ISB) Education Loan Foundation: Offers interest-free loans to students pursuing the PostGraduate Program in Management (PGP) at ISB.
• C. Mahindra Education Trust: Provides interest-free loans to deserving Indian students for postgraduate studies abroad.
• Narotam Sekhsaria Foundation: Offers interest-free loans for Indian students pursuing postgraduate studies in the fields of science, technology, engineering, and mathematics (STEM).
• JN Tata Endowment Loan Scholarship: This prestigious scholarship offers a one-time loan of INR 1 lakh to INR 10 lakhs at a 7.5% simple interest rate. Although it’s a loan, it carries the honor of a scholarship, making it a feather in your academic cap.

Also read: How to choose the right student loan for education abroad?

Loan Application Process and Processing Time

Applying for an education loan is simpler than decoding the campus map on your first day. Follow these steps to secure your education loan:

• Research: Begin by researching various loan options and identifying the one that best suits your needs.
• Collect Documents: Gather all necessary documents, such as academic transcripts, admission letters, income proofs, and identity proofs.
• Apply: Complete the loan application form and submit it along with the required documents.
• Verification and Approval: The lender will verify your documents, assess your eligibility, and approve the loan if all criteria are met.
• Disbursement: Once approved, the loan amount is disbursed directly to the institution or as per the specified schedule.

The average processing time for education loans ranges from 7 to 15 working days, depending on the lender and the completeness of your documentation. So, be prepared and apply well in advance to avoid any last-minute hiccups.

Before we conclude, let’s summarise the various loan options discussed above in a handy comparison table:

*Please note that interest rates and other loan terms may vary based on individual eligibility and market conditions. All the aforementioned student loan options offer competitive interest rates.

Also Read: Study abroad: Pre departure plan and checklist

In conclusion, embarking on an international educational journey might feel like scaling a mountain, but with the right information and a pinch of wit, you can turn that mountain into a molehill. As you choose from banks, NBFCs, scholarships, or innovative financing solutions like Prodigy Finance and MPOWER Financing, remember that you are investing in your future and the global citizen you will become.

The world is your oyster, and with the myriad of financing options available, you can pursue your dreams and make a mark on the global stage. So, take a deep breath, gather your courage, and embark on this adventure with determination and confidence, knowing that you have the support of numerous financial institutions to make your aspirations a reality. Now go forth, and conquer the world of international education. The experiences, knowledge, and friendships you gain will be priceless treasures that will last a lifetime. And don’t forget to collect those fridge magnets along the way!

Over the last 30 years, Jamboree Education has helped 170,000+ successful students reach their dream study abroad destinations by assisting them from test prep and college applications to student loans and visa applications. Connect with our student loan expert on 96431 33374 and speed up your loan application.

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