How to Choose Your Bank for Education Loan to Study Abroad
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To cover the expenses of studying abroad, students borrow education loans from banks and NBFCs. You must select the right education loan scheme with the conditions that suit you. Research different banks and compare their interest rates, and understand different fees & moratorium periods.
Education loan plays a pivotal role in the lives of meritorious students who aspire to study at a premier institute but lack the required financial resources. With education loan, it has become easier for parents to send their children abroad for higher education. Competitive interest rates, longer moratorium periods and flexible repayment terms also enable the students to take responsibility of their higher education.
Choosing the right course and university that best fits your interest area and career goals, similarly, choosing a bank/financial institution for education loan also requires extensive research and deep analysis of your financial standing and requirements. In India, many banks and financial institutions extend financial aid to students aiming for higher education in India and abroad. However, the set of features and services associated with every lender are different. The interest rates, processing fees, moratorium period, prepayment terms, tax benefits, repayment tenure and conditions vary largely among banks. It is, thus, advised to compare and then opt for a package that is aligned with your needs.
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Note: Don't let finances become a hindrance in your dream of studying abroad. Students, who wish to study abroad, may contact India’s leading education loan providers through Shiksha Study Abroad
Things You Should Consider Before Choosing a Bank for Education Loan
- Interest Rate: Interest rate remains the most important factor to be considered while selecting a bank for an education loan since even a small difference can help you save a significant amount of money. Understand the difference between fixed and floating rates of interest, compare interest rates offered by various banks and financial institutions and opt for the most cost-effective option.
- Tax Benefits: Education loans taken from scheduled Indian banks and gazetted financial institutions are eligible for tax deductions on the interest part of the loan under Section 80E of the Income Tax Act of India, 1961. Tax deductions can be availed for a total of 8 consecutive years – the year in which the loan is taken and 7 consecutive years or till the interest part of the loan is completely paid off, whichever occurs earlier.
- Eligibility for Study Loan: Most banks and financial institutions have an evaluation process to determine your education loan eligibility. The process includes a thorough review of your academic background, creditworthiness, co-applicant details, family income etc. The amount of loan disbursed also depends on the nature, of the course, you have applied for, the reputation of the college/university and the employment probability post-course completion. Also, not all lenders extend financial aid for all courses so it is recommended to check your eligibility in advance.
- Education Loan Documents: It is also advised to get the list of required documents ed from the bank to give you ample time to gather missing documents and begin the loan application process in time. Most banks usually ask for address proofs, a copy of mark sheets of previous education and entrance exams, passport-size photos, co-applicants' income proof, etc. While some lenders also ask for a confirmed admission letter from your university, some lender approves education loans even before confirmed admission.
- Costs Covered: The amount of education loan disbursed depends on a lot of factors like academic background, the reputation of the college/university, the co-applicant’s credit history etc. While some banks cover the complete cost of education, some banks cover only a part of it. Make sure you ask your education loan provider about the costs covered in your loan. These costs are tuition fees, lab and equipment charges, library and examination fees, personal expenses and travel fares in case of overseas education.
- Moratorium Extension: Lending banks and financial institutions give a grace period of six months to one year after the completion of the course before the prepayment starts which is known as the moratorium. This is done to give students time to acquire a job and gain financial stability before they begin to repay their education loans. In some cases, however, it may be required to extend the moratorium period due to the unavailability of a job or an unexpected financial obligation. Ask your lender about their policies and charges, if any, for an extension of the moratorium period.
- Prepayment Terms: The sooner you pay back the loan, the more you save on interest that accumulates on your principal amount. Ask if your lender will charge a penalty on prepayment. Accordingly, you can devise a strategy for getting a job to repay the loan as soon as you can. Get details on the pre-payment terms and conditions from various lenders to reach a decision. Check tips to know how to repay student loans faster?
- Loan Processing Time: While applying to foreign universities, meeting deadline is crucial. The loan sanction letter is an important document that is needed to be shown as proof of financial resources at time of university and Student visa application. It is important to ask the loan processing time of various lenders to help you plan your complete application process accordingly.
- Total Cost over EMI: Education loan is repaid in EMIs that are distributed evenly through the loan tenure. Some people prefer longer loan tenures to bring down the amount of the monthly installment. While this may seem convenient in short term, the total cost of your loan will climb higher with each year that is extended on the loan tenure. Go with the lender who offers you the best interest rate during a loan tenure that makes your package cost-effective. Use the Education loan calculator to understand your EMI for study loan.
- Service Charges: Besides the loan amount, there are many charges that are applicable to your education loan. These include, but are not limited to, loan processing fee, moratorium extension fee, prepayment charges, etc. Ask about all these charges beforehand to make sure there are no surprises.
A large number of banks and financial institutions provide education loans to students aspiring for higher education in India and abroad and each lender offers a diverse set of services and benefits. In addition to taking advice from previous borrowers, it is advised to analyse and compare different products to find one that best suits your unique financial requirements.
Related Articles:
- Know the A to Z of Study Abroad Loans: All Terms and Their Definitions
- Step by Step Guide to Education Loans
- Education Loan Vs. Self Funding to Study Abroad
- Collateral for Education Loan: Everything You Need to Know
- Everything You Need to Know About Education Loan
About the Author
Q: Â Is university of West of Scotland good for international students?
Q: Â What rank is Wolverhampton University in UK?
The University of Wolverhampton is one of the best universities in the United Kingdom. The university is consistently ranked among the best universities nationally and globally. For nearly 200 years, the University of Wolverhampton has been consistently providing a quality of education to students and producing highly skilled graduates. The national rankings of the University of Wolverhampton are given below:
| Ranking Body | Ranking |
|---|---|
| The Guardian University Guide 2024 | #101 |
| The Complete University Guide 2024 | #117 |
Q: Â Does the University of Essex require IELTS?
International students whose native language is not English must meet the University of Essex English language requirements to get admission. The university accepts IELTS scores as proof of English language proficiency. Mentioned below are the IELTS scores required for UG and PG admission at the university:
English Language Test | Score |
|---|---|
IELTS | Overall score of 5.5 to 8.0 with minimum of 5.5 to 7.5 in each section |
The university also accepts the score of other English language tests such as TOEFL and PTE for admission to undergraduate and graduate programs:
English Language Test | Score |
TOEFL iBT | Overall score of 72 to 114 |
PTE | Overall score of 59 to 84 with minimum of 59 to 80 in each section |
Also read: Required IELTS Score for UK Universities
Q: Â How can I get admission in the University of Manchester?
The application process at the University of Manchester may vary depending on the course and level of study. However, here is the application process for UG and PG courses:
The Undergraduate Application Process:
Step 1: You can apply through the UCAS common application portal.
Step 2: Go to the website and select the course you are interested in.
Step 3: Ensure you meet the Entry requirements (Academic qualifications, English proficiency, etc.
Step 4: Once you decide on the course, submit documents such as SOP, Transcripts and personal statements.
Check out: tips to improve your SOP.
Step 5: You can track the application's progress through your given credentials by UCAS.
Step 6: Once the applicant submits the application to UCAS, it forwards to the University, and the admission teams carefully analyse the application document.
Step 7: The university will send you an offer letter once selected. Hence keep checking your UCAS portal for your application status.
The Postgraduate application process:
Step 1: Select the postgraduate course you are interested in from the University of Manchester.\
Step 2: Ensure you meet the entry requirements for the chosen program, as they vary depending on the course.
Step 3: Complete the online application by providing your personal information.
Step 4: Upload the required documents, such as Academic transcripts and proof of English language proficiency ( TOEFL/ IELTS). experience in your fields and references (depending on the course). You also may require Two LORs depending on the course.
To make your admission better, check out the following: How Admission Officers Evaluate your application.
Step 5: If your application is successful, you will receive an offer from the University of Manchester.
Q: Â Is Hertfordshire University hard to get into?
With a 70% acceptance rate, the University of Hertfordshire is not hard to get into and follows easy selection criteria during admissions. This does not mean the university accepts all the students applying for different programs. The selection is based on academic performance, English language requirements, references, and many more. Some of the programs at Hertfordshire even demand an experience of 4-5 years. Students must fulfill the eligibility criteria to enroll in any programme at Hertfordshire University. In addition, students with average performance can showcase their relevant experience or extracurricular activities participation to increase their selection probability.
Q: Â How much IELTS score is required for Hertfordshire University?
International students coming from diverse backgrounds must prove their English language proficiency by submitting the scores of IELTS, PTE, and Duolingo at Hertfordshire University. The university demands an IELTS score of 6 from the students. Along with the IELTS scores, students can refer to the table below for all the required English proficiency score:
English language test | Minimum Score required UG | Minimum Score required PG |
|---|---|---|
6 or above | 6 or above | |
59 or above | 58 or above | |
105 or above | 120 or above |
Q: Â What is University of Wales, Trinity Saint famous for?
University of Wales, Trinity Saint (UWTSD) was founded in 2010, is a public institution for higher education and research at multiple locations. It was set up under the 1828 royal charter of Lampeter, the institution was the result of the merger between Trinity University College and the University of Wales. The institution merged with the Swansea Metropolitan University in 2013.
- Top Ranked University: The UWTSD is not ranked by any major ranking body, however as per the university ranking given on the official website of the university, it is ranked among:
- #1st in Wales and UK Top 5 Film Production and Photography
- #1st in Wales and UK Top 5 Fashion and Textiles
- #1st in Wales and UK Top 20 Graphic Design
- #1st in Wales and UK Top 5 Education
- #1st in Wales and UK Top 20 Sports Science
- #1st in Wales and UK Top 20 Mechanical Engineering
- #1st in Wales for Fine Arts
- Variety of Courses: UWTSD offers more than 300 programs at various levels including undergraduate, postgraduate degrees as well as multiple online courses.
- Highly distinguished and learned faculties: the faculty at UWTSD is highly learned and distinguished which enables students to be the best in their field of study.
- High Placements: According to Graduate Outcome data 2019-2020 quoted by the UWTSD, more than 95% of its graduates were found to be employed within 15 Months of graduation. The average salary of a graduate is not explicitly released by UWTSD, however, as per some unofficial sources the average salary of the graduates of UWTSD is approximately INR 30-35L. with the highest salary being reported as high as INR 66.5L for jobs in Financial Services.
Q: Â What is the ranking of NTU UK in terms of employability?
According to Uni Compare rankings 2024, NTU has been placed at #1 in the UK for employability. In addition to this, as per the details available on the web, some of the top companies where NTU UK alumni work are Deloitte, Microsoft, Tesco, Turner & Townsend, The Access Group, etc. Some of the industries where the alumni work are Operations, Business Development, Arts and Design, Sales, Marketing, IT, Engineering, Finance, Media & Communication, etc.
This account contains a repository of informative articles by external authors with domain expertise in various aspects of guiding students on how to go about pursuing their undergraduate and postgraduate studies ab... Read Full Bio
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The University of the West of Scotland has five modern and diverse campuses in United Kingdom. The University has welcomed more than 3,000 international students which are representing 1/3 of the globe. They also have 130 European partners who are actively in global study and exchange options through the Commonwealth universities programmes. The University also offers study abroad opportunities for UWS who are eligible for the same and also have more than 20 transnational education partners worldwide which helps them deliver UWS Bachelors and Masters Degrees around the world.