There are many institutions that grant overseas education loans including nationalized banks, private banks, and non-banking financial institutions. Students and parents are not aware of what each institution has to offer and the differences between them.

Here we seek to throw light on all the essential aspects of the financial institutions granting Education Loan For Abroad Studies. A comparison is given below wherein we have considered all factors involved while granting study-abroad loans:

Margin money
Most of the Public sector banks do not provide a 100% disbursal of the loan amount and have fixed margin money. Some banks like the Bank of Baroda do grant 100% disbursal but only for those institutions which are listed in their preference list. The amounts that are generally disbursed are in the range of 80 to 90%. The remaining amount needs to be managed from the student’s side.
In contrast, many of the private banks and NBFCs grant 100% disbursement of education loans, although they do have some minimum criteria about the institute to which the student is applying to.

Post Application Waiting Time
All banks nowadays employ an online system for accepting applications. However, the waiting time after the application has been submitted varies across each institution. Generally, the waiting time is attributed to the profile verification and collateral valuation process. This time is significantly more in the case of public sector banks while the private banks and NBFCs make sure that the loan application is approved as soon as possible, provided the applicant’s documents are in order and readily verifiable. Besides, the public sector banks generally have a more stringent set of rules and criteria for granting loans.

Collateral Requirement
Depending on the availability of collateral, there are 2 Kinds of Overseas Education Loans; secured and unsecured. Loans granted against collateral are secured loans and those in which there is no collateral involved are unsecured loans. The public sector banks readily provide secured loans even for amounts as high as INR 1.5 Cr. However, they either don’t grant unsecured loans or have a very low cap such as INR 7.5 lakhs while granting unsecured loans.

Country-specific Requirements
Countries like the UK, Australia, and New Zealand have specific requirements when it comes to the kind of loans taken for overseas education. Unsecured loans from private banks or NBFCs are not acceptable as per study visa requirements of these countries. Hence it is always advisable when pursuing higher education in these countries to get secured loans from public sector banks.
However, when it comes to countries like the US, unsecured loans are often preferred by those who are unable to provide collateral.

Keeping in mind the large number of banks to choose from, and the country-specific requirements, finding the Best Bank for Overseas Education Loan can be quite difficult. In such cases, it is advised to consult an education loan adviser to streamline the entire process for you.

Read more:
Funding options for Indian students to study overseas

Author's Bio: 

I am an Overseas Education Loan Advisors working with the leading Study Abroad Consultant. We help all the student to plan their higher studies abroad along with the details of funding options for overseas education loan.