Studying the course of your choice in one of the best universities in the world gives you a strong foundation to build your career. When such best universities happen to be in another country, you have to bear the cost of education and living abroad. But how can an international student cater to such expenses abroad?
Did you know that education loans are a popular and convenient way to fund your education? Most international students prefer this funding method for various reasons. Thus to help you understand about education loans better, this blog will be your guide.
5 Benefits Of Applying For An Education Loan To Study Abroad
There are reasons why education loan has become a prominent choice for funding. We’ve listed below the benefits you can enjoy when you get an education loan to study abroad.
- You can keep your emergency funds safely to save you on a rainy day while utilizing the education loan facility to fund your education abroad.
- You have the authority to choose to avail loan for either full or partial amounts to cover your higher education cost.
- As an international student, you will have to show proof of funds to apply for a student visa. An education loan provides you with the necessary funds.
- You won’t have to worry about finances until the end of your course term because your education loan amount disbursed in your bank account will give you peace of mind.
- You or your co-applicant who is an eligible taxpayer, can claim tax exemption for the interest you pay on your education loan. Under Section 80E of the Income Tax Act of 1961, you can claim tax exemption for the amount equivalent to the interest paid for your education loan during the financial year.
Eligibility Criteria When Applying For Education Loan
Before beginning with the process to apply for an education loan be aware of the terms related to education loan. Banks and Non-Banking Financial Institutions (NBFCs) require you to meet specific eligibility criteria to apply for an education loan. Every lending institution has its own set of criteria based on the type of education loans it offers, but there are specific standard criteria that all lenders set. They are as follows –
- You must be a resident citizen of India. NRIs cannot obtain education loans.
- You must be over 18 years of age to apply for an education loan. In the case of minors, biological parents can apply for an education loan for their child.
- Proficient academic background is verified by valid certificates and mark sheets in all previous educational institutions.
- You must submit an application acceptance document or e-mail received from the university abroad at which you want to study.
- The course you apply for must be either professional or technical from the university abroad. This is to validate that you will be equipped to secure a high-paying job after your course to repay your education loan.
Documents Required When Applying For Education Loan
These are the supporting documents you will have to submit to your lending institution along with your application form to apply for an education loan.
- Duly filled education loan application form.
- Recent passport-size photographs of the primary applicant (either you or your parents – whoever is applying for the loan).
- Birth certificate of the student for whom the education loan is being applied.
- Proof of identity: A copy of PAN card/Passport/driving license.
- Proof of address: A copy of Aadhar Card, LPG connection, EB bill, rental agreement, and property deed.
- Admission letter from the university stating acceptance of an application.
- A copy of all education documents – mark sheets and certificates.
- A copy of the scorecard of entrance exams/English Language Tests – IELTS, GMAT, TOEFL, GRE, etc.
- Bank statement of last six months.
- Income proof of the applicant or co-applicant (whichever is applicable).
Note:
If you use collateral such as immovable property to obtain your education loan, the bank will require you to submit all the relevant property documents.
Top 3 Factors To Consider When Applying For Education Loan
Before you head to the bank to apply for an educational loan, here are the key points that you must consider prior:
- Take into consideration all the expenses you will incur when you stay abroad to pursue your education. It includes accommodation, transportation, food, books and stationery, equipment, and any other cost if your course includes training, internships and projects. After calculating the costs, decide on the appropriate amount to apply for your education loan to ensure that it will cover all your expenses throughout your stay overseas.
- Choose the loan repayment period based on your financial planning to repay your loan without any hassle.
- Though many banks promise 100% funding for the course, at the end of the process, up to 90% of the amount is disbursed after clearance of the application. Make sure you have sufficient funds to cover 10%-15% of your overall cost to study overseas.
Amongst several factors, gaining an admission letter from any top university abroad increases your chances of getting your education loan approved faster. Now that you have all the information to take the next step and apply for an education loan with Yocket with the lowest interest rates.