Is it money that stands between you and your dream of earning a foreign degree? The easiest available solution for this problem is bank loans. These days, most students who plan to study abroad depend on bank loans to meet the cost. Considering the fact that a foreign degree is a great investment for the student’s future, depending on education loan for abroad studies is not a bad idea either. But there are certain matters and facts you have to keep in mind before going ahead with obtaining education loans for overseas education. This blog will help you to get a basic idea about availing education loan for abroad studies.
While selecting the loan scheme, you must also check the eligibility criteria for availing education loan for abroad studies set by different banks. Check if you can avail education loan for the course you have chosen. The banks usually check the reputation of the educational institution you have chosen and whether the course is short term or long term. So, it is better to have a clear idea about the requirements for applying for education loan for abroad studies.
Read documents thoroughly
Before signing the agreement for education loan for abroad studies, you must read it thoroughly in order to avoid future regrets. You must have clearly understood the interest structure, conditions for pre-payment or extending in case you didn’t get placed soon after the studies. You should clear all your doubts regarding various clauses of the loan agreement before signing the agreement.
Co-applicant and payback time
Usually, if you are availing an education loan above Rs 5 lakh, you will need a co-applicant or co-signer. The co-applicant or co-signer, mostly a parent, will sign the loan agreement. He/she will be responsible to repay the loan amount if you fail to do so. Normally, banks give a period of five to seven years to pay back the loan after one year of studies or six months of getting employed.
- Educational loan for abroad studies may cover:
- Tuition fees
- Room and board fees
- Health insurance fees
- Charges for examination, library, laboratory and hostel
- Cost of purchasing books, equipment, instruments and uniform
- Travel expenses including flight ticket
- Caution money, refundable deposit, etc.
- Study tours, exchange programs and project work
In order to apply for education loans for abroad studies, you will need documents including:
- ID and Residence proof of the applicant and co-applicant
- Offer letter or proof of admission to the study program
- Passport size photographs
- Bank account statement
- Telephone bill/water bill/electricity bill
- Signature proof
- Passport copy
- Scholarship documents, if any
- Estimation of expenditure during the entire period of study
- Documents for collateral security if needed