Pursuing higher education overseas is considered to be one of the best ways to get ahead in an extremely competitive world. But with skyrocketing prices for quality education overseas, it is growing extremely difficult for parents to fund their children’s education by themselves. This has led to a near exponential increase in the number of individuals seeking education loans for overseas studies. Viewing the potential of this market, numerous leading banking institutions in India currently offer education loans to those pursuing various graduate and post graduate studies abroad.
Additionally, female students applying for an education loan in India have the additional benefit of being charged an interest rate which is 0.5% less than a similar loan granted to a male student. Education loan for overseas studies are granted only to those who have confirmed admission from a recognized institute. Courses for which loans are readily available include engineering, medical, law and management. Education loan may also be availed for other courses however, the list of such courses including vocational courses vary from one lender to another. The following are some leading lenders who provide educational loan for overseas studies to female students.
IDBI Bank Education Loan
Industrial Development Bank of India (IDBI Bank) is relatively new to the retail banking segment, therefore it is aggressively attempting to expand its current customer base. IDBI Bank allows female students to avail an education loan for specialized courses such as pilot training, shipping and aeronautics as well as other professional courses mentioned earlier.
Axis Bank Education Loan
Axis Bank is ranked as the third largest private bank in India and offers female students education loans for a wide range of graduate and post graduate studies. The typical processing time required by Axis Bank to decide if the loan will be provided is about 15 days. The quantum of loan may include tuition fees as well as cost of books and hostel charges.
Bank of Baroda’s Baroda Scholar Loan
Bank of Baroda’s offering for women students pursuing a graduate, post graduate or doctorate course abroad is marketed as Baroda Scholar. This unique product from Bank of Baroda also covers one-way travel expense to the overseas education destination. Additionally, during the moratorium period, the interest accrued is calculated as simple interest.
Credila Education Loan
Credila, is a HDFC Ltd. Company that provides education loans to women interested in pursuing higher education overseas. There is no maximum limit on the loan amount sanctioned for overseas higher studies. This lender also offers education loan products designed to support students interested in pursuing studies at specific overseas locations.
Table1. A Comparison of the above overseas education loan options across key criteria*
|
Comparison Criteria |
IDBI Bank Education Loan |
Axis Bank Education Loan |
Bank of Baroda’s Baroda Scholar Loan |
Credila Education Loan |
|
Max Loan Amount |
20 lakhs |
20 lakhs |
20 lakhs |
No upper limit |
|
Max Tenure |
15 years |
15 years |
15 years |
12 years |
|
Interest Discount for Girl Student |
0.5% |
0.5% |
0.5% |
0.5% |
|
Guarantor Requirement |
Parent/Guardian as co-applicant |
Parent/Guardian as co-applicant |
Parent/Guardian as co-applicant |
Parent/Guardian as co-applicant |
|
Maximum Percentage of education cost covered |
90% |
85% |
85% |
Up to 100% |
*The figures in the table are indicative and subject to change from time to time. Log on to Paisabazaar for updated information.
Collateral Requirement
It is important to keep in mind that for loan amounts that exceed Rs. 7.5 lakhs, the lender requires collateral to secure the loan. Examples of acceptable collateral include:
- Documentation for property such as residential flat/ house
- Non-Agricultural land documents
- A fixed deposit assigned in favor of the lender
- LIC Policy of the primary borrower.
So, ensure that you have such collateral handy when putting in your education loan application. For more tips regarding how to choose an education loan that suits your requirement, read Must Know Facts about Education Loan.