Studying abroad is a dream that most hope would be fulfilled one day. However the path is not as simple as it seems to be. You have to make a number of choices starting from selecting the country where you wish to go for further studies to choosing the right course and finally somewhere in the middle of all these decisions lies the most important of them all i.e. arranging the finance.
In order to make their dream of studying abroad come true, most students have to settle for a loan. Reasons for taking a loan vary from not being able to afford the exorbitant fees to facilitating visa documentation. Getting the loan cleared is a hurdle that is nearly impossible to avoid. What makes the going even tougher is the fact that there are only a few banks that offer educational loan. Government subsidies have kept interest rates on education loan in India relatively lower than other loans making the not-so-popular choice of private banks.
This narrows down the list of options even further. Thus you are left with only option that is to apply for education loan from a government bank as they are mandated by policy to provide these loans. Even though the interest rates on such loans are lower, bureaucratic practices and time constraints are a major obstacle on your way to realizing your dream.
Here is the list of few banks covering major aspect of applying for a Bank Loan.
Oriental Bank of Commerce
Eligibility for Loan: All Indian nationals who are below 45 years who have secured admission to a recognized course in an approved university are eligible.
Expenses Covered: The loan covers all expenses including tuition, books, airfare, study tours etc. For accommodation the amount is paid to the management of the boarding house.
Loan Upper limit: For students pursuing their education abroad, the loan amount is a 15 lakh. This is subject to a 5% margin, i.e. students have to put in this amount themselves.
Repayment Period: The student gets a holiday period for a year after they finish their course or six months after they find a job,. Following this the loan is to be paid over 84 EMI’s.
Security: Upto Rs 4 lakh-co-obligation of guardian is a must. Upto Rs 7.5 lakh a third party guarantee is also needed. Upto 15 lakh, security/assets equal to 100% loan amount.
Eligibility for Loan: Any student who is an Indian national, and a major, or represented by a guardian is eligible for the loan. The bank gives loans for all recognized institutes overseas.
Expenses Covered: The bank provides finance for tuition boarding, books and travel. However, no assistance is provided for capitation fees and coaching.
Loan Upper limit: For overseas education, the maximum loan amount is Rs. 15 lakh with a margin of 5 %i.e. students need to put in that amount themselves
Repayment Period: The amount has to be paid back in 5 to 7 years commencing one year after completion of the course or 6 months after securing the job whichever is earlier.
Security: Upto Rs 7.5 lakh, no security required. For over 7.5 lakh, collateral security equal to 100% of the loan amount with suitable margin and a third party guarantee is needed.
Bank of Baroda
Eligibility for Loan: The applicant should be a citizen of India and secured admission to the course. No minimum marks required and loans are provided for all recognized courses.
Expenses Covered: The loan covers all expenses incurred during the study period like tuition fees, boarding and lodging, books, study tours, laptops, travel or any other requirement.
Loan Upper limit: For studying abroad, the student gets a maximum loan of Rs 10 lakh for an UG course and 15 lakh for PG education. The margin money in this case is 15%
Repayment Period: It needs to be paid a year after the completion of the course or six months after finding a job, whichever is earlier. Then, the loan has to be paid back within a period of five years.
Security: Upto Rs 4 lakh no security is required. Between 4-7.5 lakh, a third party guarantee & assignment of future income is needed. Upto 15 lakh, 100% collateral security is mandated
State bank of India
Eligibility for Loan: The applicant should be an Indian national and have secured admission into any course that has employable prospects.
Expenses Covered: Expenses covered in the loan include tuition fees, travel, books, computer and even a two wheeler costing upto Rs 50,000.
Loan Upper limit: For studies abroad, the maximum loan amount is Rs 20 lakh and a margin of 15% is required if the loan amount is more than Rs 4 lakh
Repayment Period: Payment starts a year after the completion of the course or six months after finding a job. For a loan of less than 7.5 lakh the student has 5-7 years and for more than that 5-10 years.
Security: No security is required for a loan upto Rs 4 lakh. From 4-7.5 lakh a third party guarantee is required and for 7.5 and above, the bank needs collateral security for the full value of the loan.