The importance of educational loans for studying abroad

The students of the current generation are keen to pursue higher studies from a prestigious university. However, most of the prestigious universities are located out of India; thus, students have to travel to a foreign country to attain education of their choice. But there are many meritorious students who are unable to obtain higher education, due to the exponential costs of educational fees. Now, there are a lot of banks and NBFCs (non-banking financial companies) which have started offering educational loans for studying abroad. The students can make use of these loans and pursue their dream of obtaining higher education.

Why are education loans important for studying abroad?

The education loans take care of all the expenses you incur while pursuing higher education. The various expenses covered by the education loans range from the costs of tuition fees, college fees, travel expenses to the residential expenses, costs of study material, etc. The education loans also cover the miscellaneous costs that you incur while completing your course.

The benefits of educational loans:

• The interest rates charged by banks and NBFCs (non-banking financial companies) charge lower rates when compared with traditional financiers’ interest rates. Thus, you can now avail

educational loans for studying abroad at lower interest rates.

• You get the option of flexible repayments in the form of installments. Thus, you can make use of this and plan out your future repayments in advance. The financial institutions also offer a moratorium period for students. You can make use of this period to search for a job. This period is around 6 months. You cannot repay the principal amount but you can repay the interest rates and lessen the burden.
• There is an array of study courses covered by these educational loans for studying abroad. Thus, you get a choice to choose from arts, science, commerce, MBA (masters of business administration), mass media, engineering, medicine, etc.

What is the collateral required for these loans?

You need a minimum amount of collateral to obtain an education loan. The collateral that you need to avail an education can be your residential property, any of your non-agricultural assets, fixed deposits, life insurance policy. You can even keep your previously mortgaged house as security on a second charge basis.

Who all are eligible for this loan?

The students need to fulfill the following eligibility criteria to become eligible for the loan amount:

• You need to be an Indian citizen to become eligible for the loan amount. Students in the age group of 18 to 35 years can apply for educational loans for studying abroad.
• An earning Indian citizen should be willing to co-sign and become a co-borrower for the loan amount. This co-borrower shall be the primary debtor for the loan amount.
• The co-borrower should have a good source of income and a great credit history.
• Your student loan eligibility is also determined by your educational background. Thus, you need to have cleared all the pre-requisite exams.
• Make sure that you are in possession of all the required documents.

An personal loan would be the first financial help for your family in your absence.