Education Loan for Studies Abroad: Eligibility Criteria and Benefits
In today’s competitive world, pursuing studies abroad in a good academic institution offering the best academic and research programmes has become essential. Studying from top universities around the world opens up a plethora of opportunities that is enriching and transformative for students. This can be undoubtedly exciting, but expensive too! Fortunately, financing education for studying abroad is possible due to various options available such as education loans.
How can I Get Education Loan for Studies Abroad?
The process of applying for an education loan to pursue studies abroad can be complicated but is quite similar to other loans.
1. Research
The first step in the process is research. Yes, there are numerous lenders offering education loans which makes the process of selecting a tough one. This makes it important to research the various lenders and identify those offering education loans for studies abroad. Make an informed decision by comparing various interest rates offered, eligibility criteria, repayment terms, etc., of different lenders.
2. Documentation
Once the lender has been shortlisted, collect and arrange all the documents required by the lender - proof of income, proof of admission to a foreign university, academic records, etc.
3. Apply for a Loan
The next step would be filing the loan application form. This could be done online or at the branch depending on the lender. The application form must be filled out accurately and all the required details must be provided.
4. Review and Disbursement
Once the application is submitted, it will be reviewed by the lender and any additional requirements will be informed to the student. If the application and documents are in accordance with the lender's requirements, the application will be approved and the loan amount gets disbursed to the university.
Eligibility Requirements
To be eligible for an education loan for studies abroad, there are specific eligibility criteria that have to be met. The criteria will differ from lender to lender.
1. The borrower has to be an Indian citizen.
2. The co-applicant/s must also be an Indian citizen.
3. Ability to give collateral (specific cases).
4. Admission must be secured to any professional/technical course before disbursement of the loan.
5. The course and institution must be recognised.
Benefits of Education Loan for Studies Abroad
Education loans offer a lot of benefits to students. Let’s have a look.
1. Financial Resources
An education loan will take care of the university tuition fees, travel and living expenses. It reduces the financial burden as there is no need to liquidate any investment. Federal Bank's Special Vidya loan offers education loans up to ₹20 lakhs for education abroad.
2. Tax Benefit
The education loan is eligible for tax benefits. Under section 80E of the Income Tax Act (1961), interest on the education loan is eligible for a tax rebate.
3. Repayment Post Education
The education loan EMIs (Equated Monthly Instalments) begin only post-completion of the course. The student can focus completely on their studies and need not worry about the repayment during the course. Flexible options for repayment are also offered by many lenders which makes the repayment process stress-free.
4. Credit History
By repaying the loan on time, students can build up a good credit history. This will help obtain any financial products like loans, credit cards, etc., in the future.
Conclusion
Applying for an education loan for pursuing studies abroad is a great way of financing higher education. With the right lender and proper financial planning, students can take advantage of the benefits of education loans and achieve their academic and career goals.