Foreign education loans offer Indian students several benefits when pursuing higher education in the UK. These benefits include financial support, tax benefits, and flexibility. Education loans cover tuition, living expenses, and travel costs, reducing the financial strain on family expenses and enabling students to pursue their educational aspirations. By managing their own finances through education loans, students can learn about financial discipline and money management, which can be a source of pride for Indian parents. Under Section 80E of the Income Tax Act of India, students can receive tax exemption on the interest paid on an education loan, providing additional financial relief.
Education loans enable students to pursue globally recognized programs, enhance their career prospects, and gain access to diverse and acclaimed educational opportunities, fostering independence and personal growth. Some education loans offer flexible repayment options, smooth processing, and the possibility of applying without a co-signature applicant, providing convenience and financial flexibility. Certain education loans cover 100% of the cost of higher education, including tuition fees, living expenses, and other study-related costs, ensuring comprehensive financial support for students.
There are two types of education loans: secured and unsecured. Secured education loans require collateral such as property, fixed deposits, or other assets. They are easier to obtain due to the collateral and typically offer lower interest rates. Unsecured education loans do not require collateral, making them a good option for students who don't have any assets to pledge. Interest rates are generally higher compared to secured loans due to the lack of collateral. They are based on the borrower's creditworthiness and academic record and typically have a shorter repayment tenure.
To apply for an education loan in India to study in the UK, students need to provide essential documents such as a filled application form, passport-size photographs, photo ID, residence proof, academic documents, admission letter, bank statements, and income proof. The application process typically involves applying online, providing course and fee details, KYC and educational documents, and the co-borrower’s KYC and income details. The loan tenure for overseas education loans in India typically ranges from 5 to 15 years, depending on the lender and the loan amount. The interest rates for education loans start from 9% to 13% per annum, depending on the lender and the loan amount.
Top Overseas Education Loans: SBI Global Ed-Vantage Scheme, Union Education Loan Schemes, Baroda Scholar Scheme, Star Education Loan. Private banks : ICICI Bank, Axis Bank, IDFC First Bank. NBFCs: HDFC Credila, Avanse, Incred, Auxilo, Credenc. And international lenders: MPower Finance, Prodigy Finance, Leap Finance are prominent options.