Choosing an education loan does not mean straining yourself financially; indirectly, when you opt for a study loan, you invest in your dream of studying abroad at your dream university. It also provides a financial lifeline to overseas aspirants and their families, who thought that international education was not possible if one did not have enough funds or assets.
As much as international educational loan facilitates things for those without a substantial financial backup, there are multiple reasons why it is a wise choice for even those who can afford to pay the cost of education upfront.
This article highlights the ways foreign education loans provide financial support for overseas learning. Let us get going!
Top Benefits of Taking an Overseas Education Loan
- Education Loan Helps to Save the Existing Funds
When planning to send their child to study abroad, the first thought of parents is to sell valuable assets to finance education. However, doing so has a negative influence on both purchasing power and long-term financial planning. When they go for a study loan, banks undertake the liquid assets such as Fixed Deposits or Government Bonds for collateral and sanction the loan without any hassles. - Provides Loan Without Collateral
Without collateral, an international education loan is possible where the applicant is not required to back up the loan amount with any security. Education loans for abroad studies without collateral are offered by some financial institutions such as private banks, non-banking finance corporations (NBFCs), and international lenders. Even though loans without collateral are sanctioned with a slightly higher interest rate, it allows applicants from varied backgrounds to fund their overseas education. - Covers more than Tuition Fee
Some people have a misconception that international education loans only cover the tuition fees of students. On the other hand, an education loan for studying abroad covers almost every necessary expense that international students would require when studying and living in a foreign country. Apart from the tuition fee, the loan covers other necessary expenses such as airfare, house rent, food, study material, and other utilities that one needs in their academic period. - Offers Low-Interest Rates
Be it collateral or non collateral education for abroad studies; the interest rates are low compared to personal loans. The facility to pay less interest rate over the tenure helps international study aspirants and their families finance foreign education without worrying about paying more interest. Some of the top public banks, such as State Bank of India (SBI), Bank of Baroda (BOB), and Bank of India (BOI), offer competitive interest rates ranging from 9% to 11% to facilitate the studying abroad process of Indian students considering studying abroad. - Comes with a Moratorium Period
The moratorium period is one of the primary benefits of foreign education loans. Unlike personal loans, which compel borrowers to begin paying EMIs immediately, education loan plans provide a moratorium period during which students are not obligated to pay EMIs to the financial institution until they have completed their studies. Some banks even provide an additional 6 to 12 months after graduation to relieve students of the burden of repaying loans right away.
These are some ways an international study loan benefits applicants and their families. It not only takes the financial burden off parent’s shoulders but also helps teach financial discipline among students from an early age, as they are required to start paying back without delay after the moratorium period ends.
Not just that, the regular repayment of the education loan helps build a good CIBIL that results in an easily sanctioned loan in the future for personal endeavours such as when buying a new home, car, or any other tangible or non-tangible assets.
For additional information about study abroad loans, you can contact overseas education loan advisors, who identify practical loan solutions and strategies to meet your study abroad ambitions.
