education loan

Tips for efficiently applying for education loan for abroad studies

Studying abroad is a great way to boost your career. It opens several opportunities for students with aspirations. However, your parents’ savings or your part-time job are insufficient to cover the soaring educational costs. Hence, taking an education loan for abroad studies becomes necessary. 

Getting your application approved depends on meeting the student loan eligibility criteria. Lenders use various parameters for this. It is essential to consider these aspects while applying for a foreign education loan. It facilitates your application and repayment journey. Here are some of the tips to consider: 

Loan technicalities: It is crucial to understand the different loan aspects. The major components affecting the loan cost are the education loan interest rates, principal amount, and loan tenure. There is a margin to the loan amount ranging from 5 to 15%. You get tax benefits on the interest payable. Lenders offer a moratorium period to repay the loan amount after course completion.  All these loan details help you make an informed decision.

Eligibility requirement: It is advisable to study the eligibility criteria thoroughly to get your loan approved. It varies across lenders based on their policies and offers. However, the standard parameters remain the same. They are your academic record, the course chosen, university reputation, citizenship, etc. It is best to check them on lenders’ websites to get an accurate idea.

Repayment terms: You receive a moratorium period from most lenders for repayment. It means that you start repaying after course completion. You get six months to one year after completing the study programme to find a job. After which, your repayment tenure starts that ranges between 10 to 15 years. Despite the grace period, it is best to pay during the moratorium to reduce loan interest and instalments. 

Documentation: Lenders verify your documents to check your study abroad loan eligibility. You should arrange them beforehand for hassle-free application. The paperwork includes the application form, identity proof, residence proof, academic certificates, admission letter, co-borrower’s credit report, income statements, etc. After the document authentication, your loan gets processed. 

Exchange rate: Most lenders disburse the loan amount directly to the selected university. As it gets remitted to a foreign university, the value gets affected by the exchange rate. It involves the overall loan amount sanctioned. The exchange rate keeps fluctuating, which, if higher, adds to the loan amount and interest rate. It thereby influences the loan cost. Hence, checking this with your lender is essential.

Course type & university: The course you select and the university reputation vastly affect your eligibility. Therefore, consider the career prospects related to your study programme. It is crucial to question the course scope in the country you want to study. It is best to understand the future opportunities available from the course and the university to ensure ease in repayment. 

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Christophe Rude

Christophe Rude

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