Almost all Indian students aspiring to study abroad scour for affordable education loans as a means to fund their long-cherished dream of acquiring that coveted foreign degree.
That said, getting an education loan – which, by default, happens to be the first step in this long process, is not an easy task to accomplish. To begin with, banks and other lending institutions, as the first elimination criteria, always check the institution where you are securing admission. Second, they consider the amount of loan you are seeking.
Banks always look at the employability of the students after the course is completed and, therefore, the first criteria they seek is how well-known the institute is and how well-placed its alumni are.
But there could be other problems, too. Not every branch could be having the authority to extend an education loan for studying abroad.
Say, for instance, you have secured an admission for some course in France. First, that institution may not be in the list of approved educational institutes for which public banks would be willing to extend a loan. Let’s suppose you find some bank, which agrees to provide the loan, then the branch in your city or hometown may not have the authority to extend such kind of education loan. In that case, you might have to go to the nearest big city or metro, and do the entire paperwork for securing the loan.
Non-banking finance companies (NBFCs) might provide you the option of getting a loan without much paperwork, but there could arise chances of being refused a loan due to one or a combination of several factors – the country, the university, the course, and/or the loan amount. Unless you tick all the parameters, a loan could be off-limits.
Let’s suppose you finally manage to secure a loan for studying abroad. Then the next problem that most students face is that the loan could possibly cover only the tuition expenses, and in some cases, the boarding or living expenses. Beyond that, you will have to arrange your own finances for everything else.
Sometimes, banks or other lending institutions could demand additional documents, including those from the university where you are seeking admission, with details of cost and other expenses before granting you a loan.
Most often, public banks will seek a collateral security before extending an education loan for studying abroad. This could be either in the form of an immovable property, provident fund or security deposit.
Lastly, the rate of interest could be as high as 12.5 per cent for public banks and 13 per cent for private banks.
But don’t despair, you can always secure an education loan to study abroad and fulfil your long-cherished desire of acquiring a foreign degree.