How to choose the best student loans for studying abroad

The plan to pursue your further education abroad is a big step. Although exciting, there goes a lot of planning behind taking this decision. The first and biggest obstacle a student planning to go abroad for studies faces is the daunting task of arranging the funds.

It is certainly not easy as the amount will obviously be more than what is required to study in India. The most common way in this case is to take a student loan which will help cover all the expenses.

There are many options you can choose from when it comes to getting the best student loans for studying abroad, as there are many financial institutions that offer these loans which include various benefits. Also note, banks are not the only financial institutions you can choose from.

Non-Banking Financial Companies (NBFCs) offer great loan deals too, and you cannot look past these as their loan offers could be better than those of the banks.

Let us check the features of both the banks as well as the NBFCs to check which is worth going with:

Different Interest Rates

Interest rates are something that is applied on every student loan that is taken. But each lender will impose a different rate as per their terms and conditions. In the case of banks, they follow the marginal cost of funds-based lending rate (MCLR).

NBFCs however do not follow this, and have their own way of setting the interest rates on student loans. They set their interest rates based on how the current market and competition, along with the requirements of the funds.

Verification Process

This is quite varied, as both the financial institutions function in different ways and have different verification processes. Banks generally give out loans to the selected universities that are in their list.

But do not fret, as banks also consider university if the course that it offers has good value and generates good employment opportunities. The banks will obviously have their own terms and conditions for this too, so be sure to check those before deciding to take a student.

Various Repayment Methods

This is one aspect where both the banks as well as the NBFCs function on a similar pattern. Both these financial institutions give you the option of choosing the repayment plan of starting the EMIs only 6 months after completing their graduation.

This would give you ample amount of time to save funds and get a job to support in clearing off the loan. However, our suggestion would be to not wait for the moratorium period to end and start repaying the loan as soon as you can, as this will help clearing the loan faster, which would be less of a burden for you in the future.

Financial institutions are always coming up with new offers that students can benefit from, so always look to compare what each one is offering and then choose one that suits you best. This is a sure shot way of getting the best student loans for studying abroad.

We hope this article has been useful to you, all the best!