5 Factors to consider while applying for foreign education loan

According to a study, India was ranked as the second-highest country in sending students overseas for studies. This comes although India has some top-notch universities and educational institutes. Globalisation, ease of payment, and availability of quality universities get attributed to the migration of students from India.

What is foreign education loan about, and how does it help students as well as parents in financing studies in an international country? Some of the reasons to opt for abroad studies are –

Ease of admission process

Availability of options

Quality and level of education are higher overseas than India

Flexibility to tailor courses

Although there are plenty of positives, one of the negatives here is finance. Only a handful an afford the same. Some universities offer scholarships and other financial aids, but only a few can benefit from the same. This is where education loan for abroad studies enters the picture.

Nowadays, every reputed lender offers such loans. These are inclusive of the course fees, hostel expenses, book costs, laptop and other equipment, location of the school, study tours, project work, etc.

But there are specific aspects to remember before opting for education loan for abroad. They are as follows –

Eligibility criteria

Check if the selected course or program is part of the eligible courses offered by the lender. The lenders, who provide such loans, have a list of courses which get covered under the scope of loan. Mostly, long-term courses from reputed universities get included in the eligibility list.

Interest rates

Read the terms and conditions thoroughly before understanding the overall interest rates charged by the lenders. Usually, the interest rates offered by public lenders are lower as opposed to the private ones. The latter ones, on the other hand, have a lesser cumbersome process. You should weigh these factors before opting for the right lender.

Margin requirements

None of the financial institutes, who offer such a loan, finance the entire amount. They only pay for a part of the expense, and the rest gets funded by the students. The balance amount is called a margin amount.

Collateral needed

The foreign education loan is of two kinds – secured and unsecured. Most of the lenders provide secured loans which involve security. This happens if the loan amount crosses a specific limit. It is necessary to understand these clauses for deciding an excellent source of the loan.

Repayment period

These loans have a unique concept of moratorium period where you need not repay the loan for at least six months. The repayment tenure for these loans varies from one university to the other. You should analyse the clause and other financial commitments before opting for the credit.

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