6 FAQs on Education Loan for Study Abroad – Answered

In the last few years, education loans have become more accessible than ever. Thanks to multiple banks and NBFCs offering education loans at affordable rates, students can now avail higher studies at foreign universities with the help of adequate funding. Still, a large number of students and guardians are sceptical about taking an education loan for study abroad. This is partly due to the absence of proper information.

In this article, we attempt to provide correct information by answering some FAQs about education loans.

1. Is it true that education loans have very high interest rates?

Education loans do not have high interest rates. The current interest rate for an education loan for study abroad is around 10-16.50%. Ideally, you should opt for a lender that offers competitive interest rates. Also bear in mind that the interest rate offered to you would depend on several factors related to your academics and career amongst other things.

2.  Are unsecured education loan options available?

Yes, there are many lenders, especially in the NBFC category that have the option of an unsecured education loan for study abroad. Keeping their precious assets and property with the lender may not sit well with many students and their families. Such students can avail themselves of the unsecured loan option through NBFCs.

3. What is the minimum and maximum loan amount one can avail of?

The minimum loan amount for an education loan for study abroad would generally be around Rs 1 lakh. As for the maximum amount limit, some lenders do not have one. They have not set an upper limit on the loan amount, as they realize that abroad education rates can reach quite high.

4. What costs would an education loan generally cover?

A good education loan for study abroad would cover several expenses relating to your academics as well as your stay at the study destination. So, your academic fees will be covered of course. Apart from that, your travel fare, accommodation costs, laptop and other study materials, and so on would also be covered.

Moreover, you can also avail of an education loan for study abroad that covers your pre-admission expenses as well. These expenses may include admission application fees, consultation charges, entrance exam fees, and so on.

5. Can a student get an education loan if they have not scored top marks throughout their academics?

Yes. Your eligibility for an education loan for study abroad will be determined by several factors, out of which your past academic record is one. Your willingness to study and passion for the course you are applying for will be a stronger factor in determining your eligibility for the loan.

6. What is the repayment process of education loans?

Ideally, the repayment tenure of an education loan for study abroad can extend from 12 months to 10 years. This repayment tenure is enough for most borrowers to repay their loans easily. If you wish to make prepayments or part-payments, you can do that as well. But be aware of the charges that will be applicable for both. It is always advisable to opt for a lender that offers flexible repayment options.

Do remember that the features of various education loans will differ as per the lender. Kindly read the loan documents carefully before signing.