Day: May 14, 2020

10 Scholarships for Masters Abroad You Cannot Miss!

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Top 10 Master’s Scholarships for Indian Students

As an Indian student planning to pursue your master’s abroad, you’ll be pleased to discover that there is a large list of scholarships for study abroad specifically aimed at you. These scholarships programs come from different providers: government grants, foundations, corporations, private organizations and universities. 

Searching through all scholarship programs you’re eligible for can be a tedious task. In this article we’ve put together a list of the top ten Indian student scholarships which can help you finance your overseas education to the greatest extent.

10 Best Scholarships for Study Abroad

1. National Overseas Scholarship Scheme

The National Overseas Scholarship Scheme is a Government of India run scholarship for study abroad which helps low-income Indian students pursue a higher educational degree overseas.

Expenses Covered: The scholarship covers full tuition, living costs, medical insurance, and air passage. Additionally, it also provides students with a sustenance grant and visa sponsorship.

Eligibility: To qualify for this scholarship, you must be below the age of 35 and belong to one of the following; Scheduled Castes, Denotified Nomadic and Semi-Nomadic Tribes, Landless Agricultural Laborers and Traditional Artisans. Additionally, you must also have completed your undergraduate degree with at least 55% marks, and have a combined family income less than Rs. 6, 00,000.

Areas of Study: The scholarship funds the following areas of study: Engineering, Management, Pure and Applied Sciences, Agricultural Science, Medicine, Commerce, Accounting, Finance, Humanities and Social Sciences.

Deadline: May 27th 2020

 

Website: National Overseas Scholarship Scheme

2. OPEC Fund For International Development Scholarship

OFID’s Scholarship Program sponsors outstanding young students from developing countries who wish to pursue a Master’s degree studies in a relevant field of development, from any recognized university/college in the world

Expenses Covered: The Award covers full tuition, including any supplementary fees. Funding is also provided for one round-trip flight between your home country and the university, health insurance, a relocation grant to help you cover additional costs of moving, and a monthly allowance for one year.

Eligibility: Applicants must be between the ages of 23-32 at the time of submitting his/her application, have a minimum 3.0 GPA on a scale of 4.0 from an accredited university, and enroll in a full-time Master’s program

Areas of Study: Master’s Degree studies related to development: economics of development (poverty reduction, energy and sustainable development), environment (desertification), or other related science and technology fields.

Deadline: April of every year (Applications currently closed)

Website: OFID’s Scholarship Program 

3. Erasmus Mundus Joint Master’s Degree Programs

The Erasmus Mundus Joint Master’s Degree is an integrated international study programme, jointly delivered by a group of international universities. The program is funded and run by the EU. It allows students to complete their master’s degree by studying and working in different countries throughout the duration of their program.

Expenses Covered: The award covers tuition, travelling, insurance and living expenses for selected students. Additionally, students are even exempted from tuition at their parent university if they stay a full academic year under an Erasmus scheme.

Eligibility: To qualify for the programme, you have to be registered at a higher education provider that is part of the programme, and enrolled in a course leading to a recognized degree.

Areas of Study: The Erasmus programme offers you the opportunity to choose from 130 degree options in a variety of fields. These include Engineering, Science, Mathematics, Humanities, Arts, Computing Social Sciences, Business, Law, Health, Welfare and Agriculture.

Deadline: The application period for the program is between October and January every year.

 

Website: Erasmus Mundus Joint Master’s Degree Program 

 

4. Commonwealth Scholarships and Fellowships

The Commonwealth Scholarship and Fellowship is an international programme under which member governments offer scholarships and fellowships to citizens of other Commonwealth countries. Through this program, an Indian student (that’s you!) can pursue a fully funded Master’s degree in any Commonwealth nation. It is one of the few full-ride scholarships for study abroad for Indian students. 

Expenses Covered: The scholarship covers tuition fee, return airfare and adequate maintenance and other allowances

Eligibility: You’re eligible to apply for the scholarship if you hold a recognized bachelor’s degree with grades above 65% (for natural sciences) or 60% (for social sciences). The Indian Ministry of Human Resource Development conducts a preliminary selection. Consequently, final selections are done through a process of shortlisting of applications, followed by personal interviews in New Delhi. 

Areas of Study: If selected, you can pursue programs related to science and tech for development, strengthening health systems, access inclusion and opportunity. The type of degree being offered may differ by country or university.

Deadline: Applications commence in August of every year for the next year.

 

Website: Commonwealth Scholarship and Fellowship

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5. Chevening India Scholarships

Chevening is the UK government’s international awards scheme aimed to attract the world’s best students. Chevening India programme is the world’s largest such division. It provides up to 65 fully funded scholarships for study abroad to Indian students for one year Master’s programs annually.

Expenses Covered: The scholarship covers all expenses

Eligibility: You’re eligible to apply provided you hold a recognized bachelor’s degree and have at least two years work experience. As a prospective scholar, you must apply to three different eligible UK university courses and receive an unconditional offer before 16th July 2020. Moreover, you are expected to return to India for two years after they finish their studies, if selected.

Areas of Study: You can pick any program of your choice from this list of eligible programs.

Deadline: 16th July 2020

 

Website: Chevening India Scholarships  

6. Inlaks Foundation Scholarship

The Inlaks Foundation Scholarship is a prestigious study grant awarded to promising young Indian students looking to pursue their higher education at top rated American, European and UK institutions for a full-time Masters, M.Phil or a Doctorate programme.

Expenses Covered: The maximum funding given by the Foundation is $100,000. Awardees are expected to meet remaining expenses on their own.

Eligibility: You’re eligible to apply if you’re an Indian citizen under the age of thirty and have graduated with a first class (>75%) undergraduate degree. Additionally, you must not already have completed a master’s/PhD or enrolled in one at the time of application. More details can be found here

Areas of Study: The Inlaks Foundation does not give scholarships for the following subjects: Engineering, Computer Science, Business Studies, Medicine, Dentistry and related therapies, Public Health, Fashion Design, Music, Film and Film Animation. However, scholarships for Engineering and Natural Science are given if you are admitted to Imperial College London.

Deadline: The Foundation won’t be awarding any scholarships this year, due to the current global situation. However, the usual application period runs from mid January through March.

 

Wesbite: Inlaks Foundation Scholarship

 

7. Heinrich Boll Foundation Scholarships

The Heinrich Böll Foundation awards some scholarships to international students who gained their university entrance qualification from a school outside of Germany who wish to study a Masters or PhD Degree in Germany.

Expenses Covered: €850 per month plus various individual allowances; tuition fees are in certain cases possible in Germany. The scholarship is awarded for the regular period of study, may be extended by one semester

Eligibility: The scholarship is open to all students with a recognized bachelor’s degree from outside Germany. You may apply before commencing your Masters programme or at any time up to the end of the first semester of the Masters programme. Applicants have to prove their proficiency in German. Good or very good knowledge of the German language is required (at least B2 Level or DSH2).

Areas of Study: The scholarships are towards Masters Degree or PhD Degree in all subjects offered at state or state-recognised universities in Germany.

Deadline: March every year

 

Website: Heinrich Boll Foundation Scholarships

8. The JN Tata Endowment for the Higher Education of Indians

The JN Tata Endowment is a philanthropic trust set up by the Tata Foundation to support Indian students who wish to pursue a postgraduate degree abroad.

Expenses Covered: The Endowment awards one time loan scholarships amount which ranges between Rs. 1,00,000 to 10,00,000. Upon recommendation and good performance after enrollment overseas, students can also be recommended for a gift scholarship for a maximum of Rs. 7,50,000. If you’re selected as a scholar, you may not necessarily qualify for the maximum amount.

Eligibility: The scholarship is open to any Indian citizen below the age of 45, with a recognized bachelor’s degree and a minimum score of 60% in their last academic examination. The scholarship is also open to you if you’re just beginning the second year of a two year postgraduate course.

Areas of Study: You can apply for this scholarship to pursue a broad range of subjects..

Deadline: Application period for the scholarship is between December and March every year.

 

Website: JN Tata Endowment

 

9. Orange Tulip Scholarship

The Orange Tulip Scholarship Programme (OTS) provides talented Indian students scholarships to study abroad at select Dutch universities. The scholarship is funded by the Dutch government and is delivered in collaboration with educational institutions and multinationals.

Expenses Covered: The amount of scholarship offered can differ based on the partner university. While some universities offer anywhere around 25% scholarship, others may offer upto 100% towards tuition.

Eligibility: You’re eligible to apply for this scholarship if you’re an Indian citizen and have been offered a place at a partner institution. You’re also eligible to apply if you’re planning to send an application to a partner university.

Areas of Study: While study programs are limited to participating universities, they still span a broad range of fields.

Deadline: Partner universities have different deadlines which span between January and June. You can check the deadlines here.

 

Website: Orange Tulip Scholarship

 

10. Campus France Charpak Scholarship

The Charpak Scholarship is offered by the French Government to help Indian nationals pursue a Master’s degree at a French higher educational institute.

Expenses Covered: The scholarship provides a living allowance of 700 Euros, social security, tuition fee waiver up to 5000 Euros and a one-way airfare between France and India. Moreover, scholars are also assisted in finding affordable student accommodation, when they arrive in France.

Eligibility: The scholarship is open to any Indian citizen under the age of 30 who intends to pursue a postgraduate degree in France. There is no specified grade cut-off as applications are evaluated for their overall quality.

Areas of Study: Applications to pursue a master’s degree in all streams and fields of study are welcome

Deadline: 28th May, 2020

 

Website: Charpak Scholarship

 

This list aims to introduce you to the bigger, more substantial scholarships which can help you fund your masters abroad. But, you should NOT ignore other scholarship options. Many universities in virtually every popular international student destination offer substantial scholarships for study abroad for Indian students. The list includes multiple institutions in the US, UK, Canada, Australia, Germany, among others. Some select universities like the Ivies even help international graduate students fund their masters abroad with need-based air and grants.

 

SelectRight is a data-driven platform which provides you personalized universities for your master’s. Through data analytics, it helps predict your chances of admission, return on investment and even provides comprehensive details such as the list of scholarships you may be eligible for. Sign up today and compare your options!

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Collateral v/s Non-Collateral Student Loan

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Education Loan for Study Abroad: Collateral v/s non-collateral loans

“To Collateral Or Not To Collateral?” This might literally be the question on your mind if you’re searching for an education loan to fund your graduate studies abroad. Should you secure an education loan for abroad studies without collateral, or with collateral? This guide answers. 

Education loans, like most other loans, come in two options: secured and unsecured i.e. loans with and without collateral. You may already be familiar with the common definitions of ‘secured’ and ‘unsecured’ loans. However, before you proceed to consider your loan offers, it becomes really important for you to be aware of the subtle differences between either type of loan option.

Collateral vs. Non-collateral

What are secured or collateral-based education loans for abroad studies? 

This type of loan requires you to pledge something valuable to your lender as security. Such valuable items would generally include property, fixed deposits, stocks, bonds, but can even include things like insurance policies and expensive items (for instance, an original Infinity Gauntlet prop or signed cricket jersey, if you own one) at times.

 If you or your co-signer is unable to pay the loan, the lender reserves the right to seize your collateral and sell it to recover their income. In other words, you lose your gauntlet!

What are unsecured or collateral-free education loans for study abroad?

This type of loan does not require you to pledge an asset as security to the lender. Here, the lender assesses you based on your academic profile & the financial capability plus creditworthiness of your cosigner (if required).

How to choose between an education loan for abroad studies without collateral or with collateral?

Taking the decision to expand your horizons by studying abroad is a great one. However, taking the right loan to fund your studies is equally, if not more important. Because everyone has different circumstances and needs, it becomes a futile exercise to provide a one-stop solution to choose between collateral and non-collateral loans. In this article, we present a few evaluation criteria which you can apply while choosing between a secured and unsecured loan:

1. Loan Amount Covered

The total amount covered by your lender depends heavily on what kind of loan you have taken.

Universally, secured loans have higher total amounts than unsecured loans because of the added security of collateral. The difference can be huge. For instance, most secured loans tend to offer up to 1.5 Crores (or 90% of your collateral’s value). 

On the other hand, unsecured loans offer up to 50 lakhs. The maximum amount offered differs between lenders and you should try approaching as many lenders as possible to get the amount that fulfills your specific needs.

While considering what loan amount you can avail, you should also know how you can use the total amount. Your loan may only cover certain expenses like tuition and ignore others like rent. If you spend on something not covered from your total amount, you may be asked to pay a penalty. Always ask the lender what you can and can’t use the loan amount for.

2. Visa Acceptance

It can be a huge advantage to pick one loan option over others when it comes to matters like Visa acceptance. Because of their country’s guidelines, visa officers at consulates prefer to approve documentation for students who they think have ‘proper’ funding. They do this to avoid the risk of students staying back in their country illegally after the visa has expired.

 Secured loans are generally looked at as being more visa friendly especially if you’re heading to the UK, Australia, or New Zealand. 

But, unsecured loans are perfectly fine for more popular destinations like the US/UK.

While these are general trends, it is important to keep in mind that it is still possible for you to apply for a student visa and get approved regardless of what kind of loan you have taken.

3. Interest Rate

Since they are protected by the security of collateral, secured loans are generally cheaper than unsecured loans. This is because their interest rate remains lower (at around 8.5% to 9%).

On the other hand, unsecured loans come with much higher interest rates starting at 11.55% and going up to 15% (depending on the type of lender)

However, you should never compare loans based on just the interest rate. The total cost of either type of loan may still differ, because of other fees involved. Therefore, it is advisable to do a thorough check on all the fees involved and see which loan is cheaper.

4. Turnaround times and Moratorium

Turn Around Time is the time it takes from your application until the final disbursal of the loan amount to you. The moratorium period is the time you get before you have to start paying back your loan amount with interest.

Secured loans have higher turn around-times & lengthy documentation for evaluation of the collateral. This documentation involves checking the value of your collateral and sometimes even its legality (not every lender knows how valuable an original Infinity Gauntlet prop is xD). Also, secured loans tend to have longer moratoriums (When a lender finds out how valuable your collateral is, they’ll be very willing to give you time to pay back).

In turn, it takes less time to process unsecured loans because the paperwork is minimal. If you’re looking for a loan without documentation, an unsecured loan is the closest you can get! But unfortunately, unsecured loans don’t give you longer moratorium periods to pay back.

 

Education loan for abroad studies without collateral or with: How to decide?

Neither collateral-based nor collateral-free loans are good or bad. They are just different. With an education loan for study abroad without collateral, you don’t pledge any assets, and that’s a relief for many. In any case, choosing between collateral and non collateral loan for study abroad demands research and in most cases, expert advice. Acting on this need, at GradRight, we’ve created an online platform for students to connect with multiple lenders in one go! You just create your profile on gradright.com and ask all lenders to communicate their offers online. Try it now instead of inquiring with 36 banks.

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How to Avoid Hidden Costs of Student Loan?

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Hidden Fees and Costs of Student Loans

How to avoid hidden costs in student loans

Student loans often come with multiple hidden costs which trouble borrowers over the years. In uncertain times such as these, navigating graduate school applications and a search for loans can get overwhelming. As a result, it’s crucial that you make wise and well-informed decisions. This can help you stay aware of, and avoid hidden costs. Here, we’ve put together a list of certain hidden costs that you should keep an eye out for, as you evaluate your loan offers. These include:

 

Processing Fees

Often, education loans come with a baggage of extra fees that the lender charges you. These include the lender’s servicing charges (usually 1%-5% of loan amount) and statutory charges. Additionally, these also include like stamp duties, charges for duplicate copies and other documentation charges which help the lender facilitate your loan.

 It might not be possible for you to remove the cost of processing fess from your loan. But there are ways through which you can minimize them. For instance, if you take a student loan online, you end up avoiding significant paperwork-related charges!

Loan Modifications

Change is constant! After you take your loan, you may want to make changes, like converting the interest rate, rescheduling your payments or swapping one co-signer for another. These changes depend on your personal circumstances and preferences; perhaps your co-signer relocated and is no longer eligible by law to fulfill that duty or you want to convert to a fixed interest rate to make stable payments and save to buy something.

But, most lenders aren’t very welcoming of such changes and charge a fee for all of these.

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Penalties

A penalty is a ‘punishment’ imposed for breaking a law, rule or contract. When you sign your loan agreement, you become party to a legal contract, which requires you to make regular payments. Naturally, when you break such a contract by making a late payment (maybe you forgot to pay the bill), the lender penalizes you with an extra charge.

However, lenders don’t just impose penalties when you aren’t able to pay on time. They are also imposed when you want to cancel your loan (usually 2% of loan amount charged) or if your check bounces due to lack of funds (maybe you spent a little more on coffee the previous month).

Pre-payment Charges

Planning to end your loan by paying off early? Lenders are really shrewd because they even charge you when you’re too good of a customer. In some cases, it might cost you more to end your loan earlier than you planned! That’s because some lenders hit you with a pre-payment penalty, to discourage you from paying back early. Why do they do this? Because this way, they don’t lose income from interest you pay.

Payment Loopholes

You should be extra careful at the time of signing the loan documents and watch out for loopholes. Examples of loopholes can include a lender combining processing fees with loan amount, so you are forced to pay more interest or clauses which prevent you from shifting to a different interest model.

Make sure to read the documents in detail multiple times and double check on the terms and conditions of your loan.

The true cost of your education loan can get confusing and expensive. While researching your options thoroughly and comparing offers from multiple lenders can get painful, it can help you uncover ‘hidden’ costs and pick out a great loan offer. With good research and sagacious decision-making, no cost is hidden.

 At GradRight, we recognize that your loan’s liability should not outweigh your education’s value. Our student loan bidding platform brings you well-researched and personalized loan offers from 35+ domestic and international lenders and provides you with expert advice on picking the best one. It’s completely online. Sign up today and get offers within 24 hours!

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Domestic vs International Education Loan Providers

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Indian Education Loans v/s International lender: which one should you pick?

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Global aspirations have become a reality for many middle class Indians in recent times. With over 750,000 Indian students studying abroad in 2020 (up from 66,000 in 2000), it has also resulted in a boom for education loan providers. 

Thanks to this healthy competition between Indian education loans (regulated by RBI) and loans from international lenders (regulated by foreign entities/benchmarks like LIBOR) for providing good student loans, it has become really difficult to choose between either one. Careful consideration and analysis is essential for making the right choice. After extensive market research, our team at GradRight came up with a list of criteria that you should consider before deciding to go with either Indian education loans or international education loans:

Interest Rate Parity

International lenders tend to keep their interest rates between 6-11%, Meanwhile, domestic lenders provide higher interest rates at 9-14%. Additionally, Indian education loans come with floating interest rates which generally increase with time, while international lenders offer an option of choosing between fixed or variable rates.

Given the obvious advantages of a lower and fixed interest rate, it immediately makes more sense to choose an international lender. However, you must consider interest rate parity. Despite a lower interest rate, you might still end up paying more for an international loan because of currency value fluctuations. It might also cost you more to pay back an international loan if you choose to return back to pursue a career in India (foregoing a relatively higher salary) or are unable to secure a job overseas.   

So, before taking on an Indian education loan or international loan, it is advisable that you consider your future plans and account for possibilities like currency fluctuations.

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Co-signer/Collateral Requirement

Cosigner/Collateral requirement is a prominent feature of most education loans. A co-signer is someone who agrees to pay back the loan on your behalf if you are unable to do so. On the other hand, collateral is something of value that you pledge to the lender as security. In the event that you are unable to pay back, the lender has the right to seize your collateral. 

While all domestic lenders require you to fulfil either of the two conditions mandatorily, most international lenders don’t. International lenders, in fact, don’t require you to pledge collateral at all. However, pledging collateral (for Indian education loans) and having a co-signer (for international lenders) can help you get better terms.

Processing Fees

Indian education loans are available for between 0.2% – 1.5% of loan amount as processing fees. On the other hand, international ones charge 2% – 5%.

Because of all the additional fees (including the processing fee) you pay, your loan can still burn a hole in your pocket if you’re not careful. Therefore, when choosing between loan offers, it’s best to pick the one which levies the most lenient charges on you.

Application Process and Eligibility Criteria

Domestic lenders tend not to have very strict eligibility criteria. They usually only require you to meet strict criteria of a valid collateral or co-signer, and don’t have a specific list of approved programs. Because of their non-uniform evaluation processes, domestic lenders might take three days to a month to process your application.

International lenders, on the other hand, have very strict eligibility criteria. Most of them tend to have a definite list of approved schools and programs. Documentation is very minimal with them so long as you match the criteria. The entire process is digital and takes about a week to complete.

Tax Breaks and Other Benefits

With all Indian education loans and a few private lenders, you may be able to avail a tax benefit under Section 80(E) of the Income Tax Act 1961 for 8 years. The deduction involved is only applied on the interest paid.

Unfortunately, you will not be able to avail any such benefits with an international lender.

In another time, taking a loan was as simple as going down to your neighborhood bank, looking at your options and finalizing the paperwork. But now, because you have a multitude of education loan providers to choose from, the probability of picking a bad loan has also increased. So it becomes really important to assess all your options (domestic or international) carefully and then pick one which is fulfils your needs and is affordable for you and your family. At GradRight, we’ve recognized the need to enable students to make an informed choice when considering their education and financial future. Our online platform allows students to connect with and compare personalized offers from multiple lenders. It’s simple, easy to use and free to try!  

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Profile Assessment for Education Loan

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How Lenders Assess Your Profile for a Student Loan?

In simple terms, lenders invest in you, the student, when they fund your higher education. But investment comes with risk. As of March 31, 2019, the number of students able to secure loans fell to 2.5 lakh from 3.34 lakh students four years earlier. In the same period, the percentage of defaults on education loans rose to about 9% as of March 2018 from 7.3% in March 2016 (data courtesy CRIF High Mark, IBA).

Because of the sheer amount of applications they get and to mitigate risks of non-payment, lenders have to be extra careful before sanctioning a loan. Hence, they scrutinize each loan application and subject it to stringent measures before making a final decision.

It is important to remember that each student has a unique profile and each lender has its own measures of evaluating a loan application. Some offers may only be made to a particular student by a particular lender. As a result, it becomes incredibly important for you to assess as many options as possible.

While lenders may offer you terms based on your specific circumstances and unique profile, there are some common factors they consider before sanctioning a student loan. These include:

 

Academics

Great test scores don’t just help you get into grad school; they also help you get through it. They indicate your commitment and effort.

Like universities, lenders also recognize effort. Hence, they tend to offer loans with better terms (like a lower interest rate or higher loan amount) to students with higher GRE/GMAT and language test scores or higher percentage/GPA in their Bachelor’s degree. The higher your scores, the better your chances of getting good terms.

 

School Reputation

When you search for universities, you probably don’t just look at academics. You also pay attention to past placement history, average salaries, and industry connections. Lenders do the same.

For lenders too, an offer from a reputed graduate school serves as a strong indicator of your earning potential and future career success as a professional. As a result, they favor students holding offers from institutions they feel are better. Interestingly, each lender prefers a different set of institutions – sometimes they are disclosed on their website and sometimes they aren’t. 

 

Program Type

We’re living through a new industrial revolution, where automation is already a norm, and super-specialization is steadily gaining relevance among graduates. Naturally, certain fields have become more popular than others and in today’s job market, seemingly provide a more stable guarantee of a good career.

Just as they estimate your potential for success based on your institution, lenders also analyze whether you will be able to pay off your loan based on what benefits you get from your program and whether the specialization you have chosen will stay in demand in the near future. As a means of avoiding risk, lenders assess your program’s learning outcomes and relevance in the near future to predict your Return on Investment (ROI) i.e. your ability to pay back. Not all banks are well equipped to differentiate profiles based on this factor yet. 

 

Creditworthiness

This is perhaps the most important factor of all for a majority of the lenders. Lenders pay special attention to your and your co-signer’s (if available) financial capacity and intention to repay. Creditworthiness is determined by looking at credit history reports and job profiles (if applicable) of either the applicant or the co-signer. Nearly all public sector banks and some private sector banks & NBFCs will only give you a loan based on whether collateral is being offered. But ultimately, a good credit history translates to better loan terms.

 

Finding a loan with good terms is hard, but not impossible. It is merely a matchmaking process. Lenders want to invest in good students. Hence, it is very important to ask as many of them if you suit their criteria. Acting on this need, at GradRight, we’ve created an online platform for students to connect with multiple lenders in one go! It’s as simple You just create your profile on gradright.com and ask all lenders to communicate their offers online. Try it now instead of inquiring with 36 banks.

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Education Loans for Study Abroad

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The Ultimate Guide to Find Great Student Loans

Your primer on education loans for study abroad

education loans for study abroad

Because of the exponentially rising cost of higher education and unpredictable currency fluctuations, most Indian students going abroad are compelled to take an education loan to fund their degree and living costs. But finding affordable education loans for study abroad has proven difficult for them. In the past year, roughly 750,000 Indian students were pursuing a higher education degree overseas. Unfortunately, around 80% of those students missed out on savings because of bad loans.

With inputs from experts in higher-ed and loan financing, this short guide helps you select a student loan which minimizes your future debt and maximizes your return on investment.

 

Education Loans for Study Abroad: Introduction, How to choose?

For most traditional personal loans, the amount is secured against what you borrow it for. For example, the security for a loan you take to buy a car is the car itself. If you are unable to pay back what you owe your lender, they can take your car away to cover the loss.

But, when you approach a lender to avail education loans for study abroad, you’re essentially pitching yourself and your future success to them. If the lender deems you ‘worthy’ of the loan, they ‘invest’ in your future, with an agreement to reap the rewards of your income through the interest you pay.

Understand that the risk is high for these ‘investors’. In the event that you are unable to pay back your loan, lenders come after what was promised to them: a share of the money you earn. Hence you should always borrow wisely.

 

Where Do You Get Student Loans?

Student loans are provided by a range of lenders with different lending criteria and governing rules of regulation. The types of lenders include traditional banks (eg. State Bank of India), Non-Banking Financial Companies (eg. HDFC Credila), and private fin-tech companies (eg. Prodigy Finance).

The lenders who provide education loans for study abroad can broadly be classified into two types: public and private lenders. Depending on their location, private and public lenders follow either the domestic or international banking regulations to decide loan terms like interest rate. If a lender (public or private) is located in India, it follows the RBI’s regulations (eg. ICICI, SBI). Whereas, if the lender is located outside India, it follows either the local banking regulations or international regulations like LIBOR.

The option to choose between domestic, international, public or private lender depends entirely on your personal requirements and preferences. To make a truly informed choice, you must carefully consider the pros and cons of all the options on your table.

You can find more information about different types of lenders and their pros and cons in the article here. 

 

What Should You Consider Before Taking an education loan for study abroad?

The true bearings of a great student loan lie in the details. It is important to look at all the facts and figures going into a student loan to spot one which fits all your needs and is affordable.

Because there are so many different types of lenders following differing regulations, lending criteria and terms tend to vary a lot. But as a rule of thumb, there still remains a list of general details that you must not ignore while evaluating student loans:

Interest Rate:

The interest rate of your loan is how much it costs you to borrow it as a percentage of the total amount sanctioned.

 

Type:

 Student loans, like many other loans, are either secured or unsecured. A secured loan is one in which you have to provide collateral as security (which can be seized in case you’re unable to pay). On the other hand, an unsecured loan is one where you aren’t required to provide any collateral. You can learn more about the differences between unsecured and secured loans in detail here.

Processing Fees:

Processing fees is essentially a servicing fee you pay the bank for processing your loan amount. It is usually a small percentage of the total sanctioned amount you get, and tends to vary between different types of lenders.

 

Total Coverage:

Some lenders give you loan offers which only cover a certain set of expenses such as tuition. Your loan offers may also come with strict disbursement policies. Arrangements like these may restrict your ability to utilize the loan amount per your convenience, hence it’s important that you only choose those loan offers which meet your needs and fit your preferences.

 

Repayment Policy:

The repayment policy of your loan determines how you will be returning the amount you’d borrowed. Most loans come with a grace period (called a moratorium) of 6 months to a year, during which you’re not required to make any payments. The repayment policy differs between lenders and is something you should always compare among loans.

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So, What Does It Take To Find Great Education Loans for Study Abroad?

Finding a good student loan can be hard, but it isn’t impossible by any means. Searching for an affordable loan can be thought of as a three step process. The key to being successful in your search is to ask yourself “Have I done enough of this?” at every stage.

 

Step 1: Plan ahead and anticipate your expenses

While student loans are often called ‘good debt’, they’re still debt. And taking on debt is a huge responsibility which comes with its own pressures. When you set out to find a loan to fund your studies, you should plan and account for all sorts of costs that you may incur apart from tuition. These costs differ from student to student due to personal circumstances. Make sure you consider your specific requirements, anticipate what you may have to pay and then embark on your loan search.

 

Step 2: Research your options

The Greek philosopher Aristotle once famously said “The more you know, the more you’ll realize you don’t know”. As you research your options, you’ll come across many different ones you were never familiar with. With good research, there’s no guarantee that you’ll find a loan which magically fits all your requirements. But you’ll definitely get close to discovering loan options which fulfill most of your needs at an affordable cost.

 

Step 3: Consult professionals and trusted sources

Despite all your planning and research, you can still fall short and choose an offer which doesn’t suit your particular circumstances. This probably won’t happen the next time. But with loans, there isn’t a ‘next’ time. Given how high the stakes are, you should definitely consult professionals and trusted advisors before committing to a loan that can possibly dictate your financial future.

 

Conclusion

If you’ve made it this far in the guide, you’ve already started on the right way of going about selecting the right education loans for study abroad, by future-proofing yourself! Searching for the right education loan for study abroad is quite literally a ‘taxing’ experience. However, it can be made quicker and easier if you rely on data analysis and expert advice.

FundRight is the world’s first student loan bidding platform, through which students send their profile to all lenders who do student loans and receive personalized loan offers within hours. Sign up today to save time and up to 23 lakhs on your student loan!

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