EDUCATION LOAN SELF-FUNDING TO STUDY ABROAD

2. Funding for overseas education may at times be a daunting experience. Every year thousands
of students from India apply in various universities for higher education and puts in serious
efforts to arrange for its funds either from banking institutions or credit companies, or
arranging all by self. Though it is not a very serious challenge for those gaining entry into
best universities, even then there is a left a huge untapped market comprising of candidates
who will either have to procure for funds from both external sources and internal alike. We
are coming up with few insights into the subject of finance and ways to maintain financial
due diligence, so the entire study abroad experience runs smooth and rewarding.
FOR THOSE WHO SEEK EDUCATION LOAN FACILITY FROM BANKS
The best and the safest way to arrange finance for study abroad is to seek assistance from
public sector banks. The minimum loan amount granted by a public sector bank is Rupees 15
lakhs and may go up to Rupees 30 lakhs. The interest rate charged is generally between 9%
and 14% respectively, depending on the base lending rates of banks. An additional 1 to 1.5%
of loan amount could be charged as processing fee. The best part of such loans is that herein,
the payment process starts 6 months or a year after the completion of the course program or
on getting a job, whichever is earlier. As such students can fully focus on their studies
without worrying about other liabilities. The repayment tenure generally is 5 to 7 years post
completion of the program. Big players include SBI, Punjab National Bank, HDFC, ICICI, and

3. Eligible Courses
 All recognized courses having employment prospects
 Graduate/Postgraduate/Professional/Diploma
 Eligibility for Candidates
 Applicant must be an Indian national
 He or she should have secured admission in a foreign academic/professional college
 He or she should be at least 18 years of age
 Loan Amount
 For study abroad, the maximum loan amount is Rupees 20 lakhs by nationalised banks
 Above 20 lakhs loans may be sanctioned by NBFCs
 Secured/Unsecured Loans
 Up to Rupees 4 lakhs – no collateral required
 Between Rupees 4 lakhs and Rupees 7.5 lakhs – collateral in form of 3rd party guarantee
 Rupees 7.5 lakhs and above – Co-obligation of parents/guardian together with tangible collateral security value
along with assignment of future income of the student for payment of instalments
 Collateral
 Residential/Commercial Property
 FD of the loan value
 NSC/KVP/LIC policies/Stocks/Gold
 Tenure
 Repayment period 5-10 years
 Repayment of principal to commence 6 months/12 months post completion of the program or job, whichever is
earlier
 Margin Requirements
 15% of the loan amount for loans above Rupees 4 lakhs
 Tax Deductions
 Eligible for tax deduction under section 80E of the Income Tax Act

4. LOAN FROM NBFCS (NON-BANKING FINANCIAL COMPANIES)
 Apart from the nationalised banks, student loans can also be availed from non-banking
financial companies/institutions (NBFCs). Non-banking institutions can provide complete loan
facility ranging from Rupees 7.5 lakhs to Rupees 50 lakhs without any collateral. Prominent
players include Incred, Avanse, Credila, Auxilo. The interest generally ranges in between 10.5%
and 13.5%.
SELF FUNDING FOR STUDY ABROAD
 If you happen to arrange on your own for overseas education, you’ll have to plan well in
advance. For that we offer 5 valuable suggestions to plan on your own and arrange funds
accordingly:
 Create a Sinking Fund account 5 years prior to study abroad: Sinking fund method is a way to
arrange funds for the future in a way that sums to amount required in the future. Let us suppose
if you require a sum of Rupees 10 Lakhs in 5 years, you should start making the minimum
deposit per month which after compounding for 5 years will sum to that figure at a fixed rate of
interest.
 Select the country with the most affordable tuitions and accommodation charges: Countries may
include Poland, Singapore, and Germany to offer the best deal in terms of quality and economy.
 Seek information on scholarships: There are scholarships out there for serious candidates.
Keeping an eye on these scholarships may benefit you in the long run during times of need.
 Start working early in life: Going for masters after some work experience is always better than
pursuing a professional course without any real-world application. As such it is better to seek
work early both for arranging funds and gathering valuable experience.
 Seek information on part-time work opportunities: There are countries those allow part-time
work opportunities and many students work both to arrange funds for courses and manage
their lifestyle once they are abroad.