How Indian students can select the best education loan to study abroad

If you are an Indian student aspiring to study at your dream overseas university, then chances are you are looking for an easy way to finance your education. Students can finance their education abroad in cost-effective ways through education loans and scholarships.  

When looking for financial aid and deciding which loan is right for you, it’s important to consider and compare the following features: 

• The loan amount limit 

• The interest rate offered by the lender  

• Repayment during the study period  

• Administrative charges/processing fees 

• Loan tenure  

• Prepayment penalty 

• Tax benefits 

Let’s take a closer look at how you can ensure you select the best education loan for your study abroad experience. 

Before you start exploring study abroad education loans and lenders to finance your higher education, research the job market for your target course. Taking an education loan is an investment in your future that should pay off with a high-paying job in a field with upscaling opportunities.  

In most cases, lenders evaluate your future earning potential and employability prospects in your chosen field before approving the loan.  

Before applying for the loan, make a list of expenses you are likely to incur, such as fees, accommodation, meal plan or feed, health insurance, internet and phone bills, travel and personal care expenses. Some overhead expenses like entertainment, vacation travel, eating out are discretionary expenditures.  

Next, make a separate list for the annual budget, including family contributions, loans, external scholarships, financial aid from the university and income that you may generate through part-time jobs. Figure out how much of these expenses you can manage through your pocket and apply for an education loan for the remaining amount.  

Most students overlook currency fluctuations while planning their education abroad. A mistake they pay heavily for, quite literally. So, figure it in when devising your budget.  

Different lenders offer different types of education loans. For example, public sector banks offer education loans with collateral that supports the loan amount you want to borrow. Private banks and lenders offer loans with and without collateral. Then some international lenders offer education loans exclusively on students’ loan applications.  

• If you can pledge collateral, it is best to opt for public sector banks.  

• If you cannot pledge collateral, arrange an earning co-applicant, and opt for private banks and lenders.  

• Do not have collateral and no eligible co-applicant? International lenders are the best option.