Know all about the dos and do not of education loans for studying abroad.
Education loans for studying abroad has evolved significantly since the initiation by the State Bank of India in 1995. The Reserve Bank of India’s Educational Loan Scheme, established in 2001 and subsequently updated, exemplifies the regulatory commitment to meeting the changing financial needs of students. According to data from public sector banks, over the last decade, 461,017 students have availed educational loans for studying abroad. Unicreds, a global student loan marketplace, alone processed nearly 80,000 applications in the current year, achieving a 40% success rate post-documentation. Unicreds has strategically partnered with 15+ financial institutions, has a presence in over 20 countries and has so far facilitated 5,000+ loans with a total disbursement of over ?800 crores.
Who are the best education loan providers in India?
There are several banks and non-banking financial companies offering students loans, some of the notable ones are: ICICI Bank, Union Bank, IDFC First Bank, Bank of Baroda, Axis Bank, HDFC Credila, Avanse, Auxilo Finserv, InCred Education loan and Mpower financing.
What is the average rate of interest & tenure?
As a general guideline
Banks: Interest rates between 8.55% and 15%, Loan tenure can extend up to 15 years.
NBFCs: Interest rates between 10% and 15%, Longer loan tenures of up to 20 years are often available.
Things to keep in mind while applying for a loan
• Borrow Wisely Borrow within your means without compromising financial goals. Monitor your loan-to-income ratio for a manageable amount.
• Monitor Your Credit Score Maintain a credit score above 650 for better options.
• Compare Loan Rates Before Committing Research and compare interest rates among institutions.
What is the usual grace period?
The moratorium period for educational loans, lasting up to 6 months post-course completion, allows borrowers time to secure employment or make preparations for repayment without mandatory instalments. Interest accrual during this period varies based on loan terms.