By Gaurav Goenka
Important Features of Educational Loans offered to Study Abroad in India
Loan disbursal and processing
The loan may be disbursed to your bank account or directly to the educational institution. You are required to submit a few essential documents along with the loan application form filled properly to get the desired education loan amount.
Interest Rate on Education Loans
The education loan amount generally covers up the study expenses like tuition fee, study materials fee, semester exam fee, etc. It comes with a lower rate of interest and later, you can get the paid interest back in the form of a tax deduction.
Under Section 80E of the Income Tax Act, tax deduction can be claimed by borrowers over the interest they pay for each financial year. However, this deduction is available for a maximum of 8 years or till the interest is repaid, whichever is earlier.
Repayment of the Borrowed Amount
The education loan amount can be paid in installments for up to 15 years. For borrower’s advantage, the repayment starts after an interim period of 6 months post the course completion or getting a job, whichever is earlier.
Best Education Loans Providing Banks in India for Studying Abroad
HDFC Bank, one of the leading private banks offers a maximum loan amount up to INR 20 lakhs for studying abroad. For the convenience of students, the bank offers study loans abroad even before they take admission at the university.
State Bank of India
SBI offers a maximum education loan amount of INR 30 lakhs for studying abroad with a loan margin of 15%. A student can repay the loan up to 15 years.
Study Abroad Education Loan from NBFCs (Non-banking financial companies)
Non-banking institutions offer entire tuition fees to the students. Loan takers/borrowers are required to provide collateral as security to the banks since the loan amount is usually more than INR 7.5 Lakhs. Some of the NBFCs options available for student loans are:
Credila: Credila, a part of the HDFC bank provides education loans to Indian students who are aspiring to study abroad. The loans are given at a competitive floating rate of interest and can be repaid within 10 years.
Incred: Benefits offered by Incred, an NBFC are numerous. The best benefit that it caters to is that the company is willing to offer the total cost of education including tuition fees, living expenses, books, laptop and insurance. It also offers a Pre Visa Disbursal for USA, Germany & other European countries if circumstances demand. It can offer non-collateral loan up to 40-45 Lakhs. Unsecured loans are considered based on the student’s profile, their competitive exam scores, Cibil Report and so on.
About the Author
Mr. GAURAV GOENKA is the Chief Advisor for Consult To Invest. One of the oldest in the team, he has over 5 years of rich experience in the financial services industry. He is known for his deep understanding of the distribution practices and its challenges.