Finance your overseas education with the right loan

Quality education and skill-building are non-negotiable for personal and professional growth. As global opportunities expand, students must increase their knowledge and gain exposure beyond borders.

Travelling and studying abroad at an early age broadens students' perspectives, enhances their adaptability, and opens doors to diverse career paths. While determination, hard work, and zeal are the biggest contributors to acquiring knowledge, a lack of financial support often deprives bright students of the opportunity to reach their full potential. This is where education loans come in, enabling students to study abroad, pursue world-class education, and have international experiences without financial constraints.

This article explains how to apply for education loans for studying abroad and what factors to consider before applying.

Here’s why you should consider an education loan
 

An education loan for studying abroad makes it easier for students to fulfil their career dreams without financial stress. With flexible repayment options, competitive interest rates, and easy application processes, these loans ensure education is the first and only thing on their mind. They help cover tuition fees, living expenses, and sometimes even travel costs.

This also gives you the chance to explore beyond education. Diverse cultures, landscapes, interactions, and experiences become a part of your life.

With the right loan, students can immerse themselves in a foreign lifestyle, gain global exposure, and build a strong career. Many lenders also offer a moratorium period so that students can focus on their studies without immediate repayment worries. Moreover, taking a loan instead of relying entirely on family support instils a sense of financial responsibility, helping students become more independent and better prepared for the future.

Let’s understand education loans in detail, starting with the types of education loans available to you.

What type of education loans are available for you?
 

While there are many options available in the market, they will fall under these major categories -

1. Secured loans - Secured loans are offered against collateral. These collaterals can range from fixed deposits (FDs) to bonds, debentures, insurance policies, and even property. Since the bank is offered a security, you enjoy -

• Lower interest rates
• Higher loan amounts
• Longer repayment tenures
• Better chances of approval for study abroad programs

2. Unsecured loans - Unsecured loans are available to students who do not have enough or any assets to provide as collateral. These loans give students a chance to grow beyond constraints, live up to their potential, and even adopt a foreign lifestyle. As good as this option is, it comes with strict regulations -

• Higher interest rates
• Limited loan amounts
• Strict eligibility criteria (academic record, future earning potential, co-applicant’s income)
• Shorter repayment periods

Did you know that besides secured and unsecured loans, students can opt for government-sponsored loans with lower interest rates? However, availing this is highly dependent on academic excellence.

Are you getting the right loan?
 

There are several factors one should consider before applying for a study loan for education abroad. The wrong kind of loan application can either result in rejection or financial burden.

1. Type of loan - As previously discussed, one must decide between secured and unsecured loans. A secured loan requires collateral (property, FDs, etc.) and usually offers lower interest rates and higher loan amounts. In contrast, an unsecured loan does not require collateral but comes with higher interest rates and stricter eligibility criteria.
   
   
2. Loan amount - The amount of loan you avail decides the quality of education, the foreign lifestyle, the amount of time spent to study abroad, financial responsibility and burdens, etc.
   
   
3. Interest amount - Compare several options available before you settle on the loan you want. This ensures you get the right interest amount and reduces your financial burden.
   
   
4. Loan tenure - Long tenures reduce EMI amounts but increase the total interest paid, whereas shorter tenures clear the debt faster. Choose a tenure that aligns with your repayment capacity.
   
   
5. Co-applicant - Most lenders require a co-applicant (parent or guardian) with a stable financial background. Their financial stability, credit score, and income improve loan approval chances, secure better interest rates, and act as a repayment backup.
   
   
6. Processing time and fees - Different lenders have varying processing times and charges. Understanding these ensures timely access to funds without unexpected expenses.

Another major factor to consider is where you get your loan. A reliable lender/bank ensures ease of access and peace of mind, allowing you to focus on your studies.

Common mistakes to avoid when considering an education loan
 

Avoiding these common mistakes while availing of loans can help avoid borrowing the wrong type of loan, financial burden, and related problems. These mistakes include -

1. Not researching multiple lenders for better interest rates and loan terms
2. Not planning the repayment process in advance, falling into a debt trap, or facing financial burdens later
3. Ignoring the impact of credit score, which affects loan approval and interest rates
4. Overlooking loan eligibility criteria, leading to unnecessary rejections
5. Choosing the wrong co-applicant without a stable financial background
6. Not checking if the loan covers all expenses like tuition, accommodation, and living costs
7. Misjudging or misunderstanding the terms, conditions, fees, and charges properly
8. Opting for a loan to study abroad without considering currency exchange fluctuations
9. Relying entirely on loans without exploring scholarships or part-time work options

Where can you get a reliable education loan?
 

The process of getting a reliable loan involves thorough research and compatibility with your financial capacity. And IDFC FIRST Bank understands that. With IDFC FIRST Bank Education Loan, you get -

1. Lower interest rates - Interest rates start at just 9.5%, allowing students to focus on their careers without worrying about finances.
   
   
2. Higher loan amounts - A gateway to bigger opportunities, better education, travel, cultural experiences, and more come with higher loan amounts. You get loans of up to ₹1.5 crore with collateral when you apply with IDFC FIRST Bank.
   
   
3. A chance to build your career without collateral - Financial constraints should not deter bright students from studying abroad.  IDFC FIRST Bank also offers funds of up to ₹75 lakhs without collateral.
   
   
4. Guaranteed financial support - If you clear all eligibility criteria and show the potential to excel, your loans will get approved even before you get an admission confirmation.
   
   
5. Flexible repayment and loan tenures - With flexible repayment options and flexible loan tenure of up to 15 years, one can focus on both studying and building their finances as they repay the loan.
   
   
6. Tax benefits - Under Section 80E, one can deduct the interest paid from taxable income. This benefit applies for up to 8 years, reducing the financial burden while repaying the education loan for studying abroad.

Along with these benefits, IDFC FIRST Bank also funds additional expenses like travel, purchase of laptops, books, uniforms, insurance plans etc., along with the college-related expenses.

But to ensure you get a loan from a reliable place, ensure that your preparation and application processes are error-free.

Documents required
 

Keeping the right documentation ready makes the process hassle-free. The documents needed by -

A stress-free education awaits you
 

A world-class education shapes not just your career but also your personal growth, independence, and financial responsibility. Studying abroad offers invaluable exposure, new perspectives, and the chance to build a strong foundation for your future. With IDFC FIRST Bank’s education loan for studying abroad, you can focus on learning, exploring, and growing—without financial stress. Take the next step today and turn your overseas education dreams into reality.Apply today.