Understand & explore various categories of education loan options for abroad studies with minimal interest rates. We will cover the top lenders, eligibility, documents, and the application process in this page.
What is an Education Loan?
Education loans are a form of financial aid that helps students study without worrying about the associated costs. There are different education loans available in the lending marketplace, and students can explore the options to find the most suitable option for their profile. Education loans. are also known as Student Loans.
In the study abroad space, education loans financially empower students to explore great opportunities in foreign universities. While the cost of studying abroad can be hefty for the average student from an ordinary, middle-class family, an education loan helps the student study in top-tier universities and explore better academic and professional opportunities.
Unlike in the past, education loan options are broadened today, catering to the needs of students from different financial backgrounds. We, at Dreamamabassadors, attempt to bridge the gap by offering expert guidance and tailored solutions for your educational needs.
Among Unsecured education loans, there are different categories that cater to diverse needs such as-
- Education loans without collateral or co-borrower: Education loans without collateral or co-borrower are offered by international lenders.
Note that your university of admission must be listed by the lenders for you to be eligible for such loans. - Education loans with a co-borrower in the US: An education loan can be availed from prominent banks in the US if you have a US citizen or permanent resident in the US as the co-borrower. They are also called US Cosigner loans for convenience.
Lenders of Education Loans
There are mainly three types of lenders who offer education loans to study abroad – Banks, NBFCs, and International lenders.
- Banks: Banks have been the conventional resort for education loans for years since the establishment of education loans. In India, public and private banks offer secured and unsecured education loans to study abroad. Prominent banks in the US also offer student loans to international students.
- NBFCs: Non-Banking Financial Companies (NBFCs) offer education loans to needy students with affordable terms and conditions. Compared to banks, NBFCs have relaxed terms in accepting your loan application.
- International lenders: International lenders are financial institutions with capital in one country and operations in more countries. Unlike banks or NBFCs, they offer hassle-free education loans if your profile is eligible.
Top features of education loans for abroad studies
Features | US banks | Indian public banks | Indian private banks | Indian NBFCs | International lenders |
Maximum loan amount | “15,000 – 220,000 USD (INR 12.5 Lakh – 1.8 Cr Approx.)” | Up to INR 1.5 Cr | Up to INR 60 Lakh – 1 Cr Approx. | Up to INR 40 – 60 Lakh Approx. | 100,000 USD (INR 83 Lakh Approx.) |
Loan type | Unsecured | Secured & Unsecured | Secured & Unsecured | Unsecured | Unsecured |
Interest rates | 5.66% – 16.37% APR | 9.5% – 10% | 10.28% – 12.5% | 10.5% – 13.5% | 11% – 20% APR |
Processing fee | 0 | INR 10,000 | 1% of the loan amount | 1% of the loan amount | 5% of the loan amount |
Repayment tenure | Up to 15 years | Up to 15 years | Up to 15 years | Up to 15 years | Up to 10 – 20 years |
Grace period | 9 months | 6 – 12 months | 6 – 12 months | 6 – 12 months | 6 months |
Co-borrower requirement | A US citizen or a permanent US resident is required as the financial co-borrower | No financial co-borrower is mandatory for secured loans | A financial co-borrower with sufficient income is required | A financial co-borrower with sufficient income is required | No co-borrower is required |
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Documents required for education loans for abroad studies
Documents from the student:
- Duly filled loan application form
- Recently taken passport-size photographs
- KYC documents of the student and co-borrower – Aadhar, Driving license, passport, etc.
- Address proof
- Proof of admission or application
- Academic documents – undergraduate, +2, 10th certificates
- Entrance test results – IELTS, GRE, GMAT, TOEFL, etc.
- Bank statement of the last 6 months.
Documents from the co-borrower:
- KYC documents of the student and co-borrower – Aadhar, Driving license, passport, etc.
- Address proof
- Recent passport-size photographs
- Proof of income
- Bank account statement for the last 6 months
- Salary slips of the last 3 months
- IT Returns and other documents, if self-employed co-borrower
- Collateral documents if the loan is secured