Know These Things Before Applying for a Study Abroad Loan

One of the primary reasons many students prefer an education loan is that it helps them have access to quality education in one of the top universities. Not only does a loan for studying abroad open doors to a host of opportunities by financing their education but also reduces the financial burden parents typically bear. 



Factors to Consider When Applying for a Loan for Studying Abroad

Processing Time

Loan processing time usually varies from lender to lender. It can be processed in as little as 3 days to 30 days. The decision may also vary for every borrower, depending on the borrowing amount, student academic records and the educational institution to they are applying for. 

Borrowing Limits

While education loans are a crutch for students who wish to pursue their higher education abroad, there is a limit to the amount that can be borrowed. This limit depends on different factors such as collateral (if any), co-borrower’s creditworthiness, lender’s loan limits, repayment terms, loan terms, currency exchange rates, and so on.

Interest Rates

Generally, the interest applicable on a study abroad loan depends on the CIBIL score of the borrower/ co-borrower, repayment capacity, loan amount, and the lender’s terms and conditions. While some lenders may offer fixed interest rates, others may have floating rates - these rates are tied to a fixed interest rate and are variable based on market conditions, SOFR reset date and the spread.

Repayment Terms

When it comes to repaying the loan, students can either pay as they study or take advantage of the moratorium period before they make their first loan payment. Before applying for a loan, understand the lender’s loan repayment terms. It will help you plan out your EMIs beforehand and have a successful loan-borrowing experience. An online education loan EMI calculator can help in estimating the applicable monthly instalments. 

Today, availing of an education loan is extremely convenient. They are offered by banks, and especially education-focused NBFCs at competitive terms. One such lending institutions, Avanse Financial Services, offer both collateral-based and non-collateral-based education loans that cover every aspect of educational expenses right from tuition fees to living and passage expenses, the purchase of books, computers and other learning materials.

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