Availing study abroad education loan can help you with some of the major benefits like not ripping you off your savings entirely, getting better tax benefits, building a respectable credit score, getting an edge of moratorium period, easy and faster visa approval and helping in getting large amounts of funds upfront, among others. With all these benefits, study loan for abroad seems to be a good decision if you wish to pursue your career in a foreign destination. In this blog, we shall be discussing by and large, the types of study abroad loans that are made available at your disposal.
Unsecured education loan
As the name suggests, this is the kind of study abroad education loan where a borrower need not pledge or surrender a security of any kind. In banking terms, it is known as collateral security. This kind of loan is suited for those students who do not any collateral security for offering. While, this kind of education loan seems easier, it has much higher interest rate, which is why it is expensive. Also, it is not approved easily. The repayment time duration is lesser and some of these repayment EMIs need to be done while you are still studying. For availing unsecured student education loan, you must also show minimum parental income.
Here are your options for unsecured education loan-
| Basis | Private Banks | Public Banks | Non-Banking Financial Companies |
| Maximum Amount | Rs. 40 Lakhs | Up to Rs. 7.5 Lakhs | Rs. 25 Lakhs |
| Interest Rate | 11.25-13% | N.A. | 12-14% |
| Processing Charges | No charge for more than Rs. 20 lakhs.Rs.750 on each lakh above Rs. 20 lakhs loan | N.A. | 1% to 2% |
| Colleges that are supported | 200+ | No unsecured loans offered for higher education fee. | 500+ |
Secured Student Loan
This is another kind of study loan for abroad where a borrower offers intangible or tangible security. This security can be present in the form of immovable property, LIC insurance, land or fixed deposits. Banks take longer time for approving these loans due to inspection and document verification. However, there are some clear cut benefits of secured study abroad education loans, which include no repayment while you are still in student phase. Additionally, these loans have longer repayment durations, lesser rate of interest and are therefore, cheaper. Parental income does not become a decider in getting this loan approved.
Here are your options for secured education loan-
| Basis | Private Banks | Public Banks | Non-Banking Financial Companies |
| Maximum Amount | Up to Rs. 60 Lakhs | Up to Rs. 1.5 crores | Up to Rs. 50 Lakhs |
| Interest Rate | 11-13% | 8.85-10.25% | 12-14% |
| Processing Charges | No charge for more than Rs. 20 lakhs.Rs.750 on each lakh above Rs. 20 lakhs loan | INR 10,000 | 1% to 2% |
| Payment to be made while studying | Simple Interest | None | Simple Interest |
Unsecured non-Consignor loan
Another kind of study loan for abroad is provided by international funds such as prodigy, Mpower, and leap -finance. These lenders are very choosy about the profile of the students we cater to and generally offer loans to only students looking to study in Top global universities. They are generally more expensive than secured and unsecured loans and are provided in US dollars in the range of 8% to 12%. However for a student who does not have a collateral and his parents are retired this is the best option available for him to get an education loan.
Conclusion
Eduloans can suggest you what kind of study loan for abroad is ideally suited for you. While, there may be chances of loan rejection if you go without help, Eduloans can act as the perfect bridge between you and banks. Your chances of approval become better with us. Edu loans is a study abroad loan specialist with trend known councillors for you to get the best education loan available based on eligibility, cost and convenience. Reach out to us and you would not have a problem like the other 12,000+ on our platform.