Overseas education loan without collateral security

Any individual aged between 18 and 35 years can avail an education loan to pursue studies at an approved university abroad. Students can procure education loans for management courses, engineering courses, medicine, and graduate and post-graduate degrees, arts, architecture, pure science, hotel management, etc.

No security has to be submitted for education loans taken up to Rs. 4 lakhs. Third party guarantee has to be furnished for loans between Rs. 4 lakhs and Rs. 7.5 lakhs and tangible collateral security are required for loans above Rs. 7.5 lakhs.

Banks will sanction a maximum of Rs. 20 lakhs with the moratorium period and up to a maximum of Rs. 10 lakhs for loans without a moratorium period.

The Central Government has also introduced an interest rate subsidy scheme for repayments done during the moratorium period for the benefit of the weaker section of the society.

5% to 15% Intrest Rates

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 Eligibility criteria to apply for the education loan

The first and foremost thing is to check whether you are eligible to apply for an education loan or not. Below provided is the usual criteria which Indian banks follow for checking the eligibility of the loan applicant is:

The applicant should be a citizen of India.

The applicant must have attained the age of 18 else his/her parents will have to take the loan.

The applicant must have a good academic background.

The applicant must have secured admission at a recognized foreign university/institution/college.

The desired course which the applicant is going to study must be a technical or professional one, as banks give preference to job oriented courses.

Before applying for an education loan, the applicant must be completely aware of the documents required to apply for a student loan. Following documents are required to apply for an education loan:

 Filled application form Photographs: Passport size photographs of the applicant and the co-applicant. Photo ID: Photo ID of the applicant and the co-applicant. It can be a PAN card, driving license, Voter ID card, Aadhar card, or Passport. Residence proof: Resident proof of the applicant and the co-applicant Academic documents:

o   Mark sheet and certificates of the applicant

o   Mark sheet (Score Report) of GRE, GMAT, TOEFL, IELTS etc. whichever is applicable

Admission proof: Admission letter shared by the university or college.

 Bank statements: Last six months bank statements of the co-applicant

 Income proof: Income proof of the co-applicant

In the case of collateral (immovable property), it can be flat, home, or non-agriculture land the following documents are required:

o   Property title deed

o   Building approved plan

o   NOC for a mortgage from builder or society

Things to Remember

Moratorium period: This is the time period during which the borrower need not make any repayment to the bank. This period varies from bank to bank and could last up to sometime after completion of the course.

 Loan Margin: Usually, banks do not provide the complete amount i.e. 100 percent money needed to fund the education. Majority of the public sector banks issue 90% of the total amount, the remaining 10% has to be arranged by the aspirant himself.

 Effect of Exchange Rate: Always calculate the amount which you will be receiving at the time of disbursement, as any change in the exchange rate can affect the amount you will be receiving.

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