There has been a recent trend towards students opting for studying in foreign countries. Generally, it’s because it improve the student’s employment prospects. But like all things in foreign, even the cost of education is also very high. But that doesn’t meant that you cannot have access to these courses abroad. Most lenders look at education loans as investments in potential customers having higher repayment capacity in future.

A course might cost you Rs 30 lac to Rs 50 lac depending on the country in question. But if the course for which loan is being taken enables better earnings then it may more than justify the loan.

Make sure to check the placement record of the institution and have a rough idea about the expected monthly income you are likely to draw after course completion.

Education

With regulatory restriction in place, lenders have upper limits on the amount they can lend. For most lenders, this limit is about Rs 20 lacs. Now the amount of loan you should take depends on the course fees and your capacity to make down payment (within the upper limit). For courses abroad, lenders want applicants to pitch in with about 15% of the required amount.

But it’s worth nothing that even if you are eligible for uppermost loan limit, you should not take the full amount if you can avoid doing that. Lower the money borrowed, lesser will have to be repaid.

Generally, the education loan repayment period is between 5 to 7 years and starts from 1 year after course completion or 6 months after securing a job, whichever is earlier. Education loan interest rate varies from bank to bank and can be between 11% and 15%.

If you are looking to take an education loan for studying abroad, the best way is to first approach the bank with which you or your parents already have an existing relationship. Also check if the institute you have applied has any tie-up with banks for education loans. This can significantly expedite the loan processing.

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