Embarking on the journey of education often comes with financial considerations, and for many, loans become a crucial resource. In this blog, we explore the diverse landscape of education loan providers, delving into the types of lenders that play pivotal roles in shaping the academic pursuits of students. From traditional banks to specialized financial institutions, understanding the array of options available can empower students to make informed decisions about their educational financing. Join to navigate through the nuances of different lenders, shedding light on the unique features and benefits they bring to the realm of education loans.
What is an education loan?
Education loans are like a helping hand for students who want to study abroad. Banks and other money-related companies offer these loans at good interest rates, making it easier for students to afford quality education.
Studying at famous universities, especially in another country, can open up many opportunities. But, it can also cost a lot of money. That’s where education loans for studying abroad become really helpful. They make it possible for students from different backgrounds to follow their dreams and study at top-notch universities around the world.
Choosing the right education loan from the many options offered by different banks and lenders can be confusing. This is where GyanDhan comes in to help. We assist students in finding the best education loan for studying abroad. We make sure it fits their unique needs, making the loan approval process easy and stress-free.
Types of lenders providing education loans for abroad
There are basically 4 types of lenders that can provide you with an abroad education loan in India. These lenders are –
- Public Banks
- Private Banks
- NBFCs
- International Lenders
Abroad education loan from public bank
Public-sector banks or government banks in India provide education loans to study abroad aspirants majorly on the basis of collateral pledged as a security. Students can get unsecured loans starting from INR 7.5 Lakh to INR 1.5 Cr. Applicants need to provide collateral as a security in order to get education loans from public banks. Public-sector banks offer better interest rates than private lenders. Education loans from government banks provide tax benefits under Section 80E. Some of the major public-sector banks offering abroad education loans are:
- State Bank of India
- Union Bank of India
Abroad education loan from private bank
Private banks in India extend both secured and unsecured loans to students aspiring to pursue studies abroad. The sanctioned loan amount is contingent upon diverse factors including the chosen country, course, the applicant’s profile, and the financial standing of the cosigner. While private-sector banks generally impose higher interest rates compared to government banks, they prove more competitive than Non-Banking Financial Companies (NBFCs) and international lenders. The Rate of Interest (ROI) typically commences at 11% per annum. Notably, education loans from private banks qualify for tax benefits under Section 80E. Processing times for these loans are typically swifter than those of government banks. Leading private-sector banks in this domain include:
- ICICI Bank
- Axis Bank
- IDFC FIRST Bank
Abroad education loan from NBFC
Non-Banking Financial Companies (NBFCs) extend both secured and unsecured education loans for those pursuing studies abroad. The sanctioned loan amount is contingent upon several factors, including the selected country, course, the applicant’s profile, and the financial standing of the co-applicant. Notably, interest rates on NBFC education loans tend to be higher compared to private and government banks, typically ranging from 11.50% to 13.75% per annum. Unlike education loans from private banks, NBFC loans do not offer tax benefits under Section 80E. The processing time for education loans from NBFCs is generally shorter than that of government banks and private banks. Some prominent NBFCs in this sector include:
- HDFC Credila
- Avanse
- InCred
- Auxilo
Abroad education loans from international lenders
Certain international lenders provide education loans for Indian students pursuing studies abroad. There can be a scenario where you do not have collateral and thus you move to private banks or NBFCs. But in case you do not have a co-applicant then a question will for sure arise in your mind – Which bank gives education loan without co applicant in India?
To answer this question of yours, there are no Indian lenders that can provide you with an education loan without a co-applicant. International lenders like MPOWER Financing and Prodigy Finance are common names that can help you get an education loan without a co-applicant. Â However, the scope of eligible colleges and countries is constrained. International lenders disburse loan amounts in foreign currencies, contingent upon the applicant’s chosen study destination. Noteworthy is the fact that these loans cater to a specific list of colleges and countries. Key international lenders facilitating financial support for foreign studies encompass:
- MPOWER Financing
- Prodigy Finance
Now equipped with insights into various education loan providers, the key lies in making a discerning choice that aligns with your specific needs. Several pivotal factors come into play during this decision-making process. The maximum loan amount becomes crucial for comprehensive coverage of educational expenses, while attention to interest rates and their types significantly impacts long-term financial dynamics. Evaluating margin money terms, processing times, and repayment structures further refine your decision.
In navigating this financial landscape, judicious consideration of these factors ensures not only the acquisition of necessary funds for your education but also empowers you to embark on your academic journey with financial prudence. Thus, by weighing these elements thoughtfully, you can make an informed and wise choice of a lender tailored to your educational aspirations.