For many students, taking out an education loan is an important part of the process of pursuing higher education. While there are many factors that can impact the availability of education loans, one of the most significant is the choice of country and course.
In this article, we will explore how the country and course you choose can affect your education loan.
Country of Study
One of the most significant factors that can affect your education loan in India for study abroad is the country in which you choose to study. Banks and financial institutions assess the risk of providing education loans based on the economic and political conditions of the country.
- Stable Economies – Countries with stable economies such as the USA, Canada, UK, Australia, New Zealand, and European countries are considered to be low-risk options for education loans. Students planning to study in these countries have a higher chance of getting their loan applications approved.
- Developing Economies – Countries with developing economies are considered high-risk options. The risk factor can be due to political instability, fluctuations in exchange rates, and weak economies. As a result, students planning to study in these countries may face higher interest rates, more stringent eligibility criteria, and additional collateral requirements.
Course of Study
Another factor that can affect your education loan is the course you choose to study. Banks and financial institutions consider certain courses to be more marketable and employable compared to others. Therefore, the course of study can affect the loan amount, interest rates, and repayment tenure.
- Professional Courses – Courses that lead to professional degrees such as Engineering, Medicine, Law, Management, and Accounting are considered to be more employable and have a better chance of generating a good income. Students pursuing these courses are more likely to receive higher loan amounts and lower interest rates.
- Non-Professional Courses – Courses in the fields of arts, humanities, and social sciences are considered to be less marketable, which means that students pursuing these courses may face more stringent eligibility criteria and higher interest rates.
Loan Amount
The loan amount is one of the most important factors that determine the terms of your education loan. The amount of loan you can receive will depend on several factors such as your academic profile, the country and course of study, and the collateral you can offer.
- Academic Profile – Students with a good academic record are more likely to receive higher loan amounts. Good academic performance can include a high school GPA, entrance exam scores, and prior academic achievements.
- Country and Course of Study – As previously mentioned, the country and course of study can also impact the loan amount. Students planning to study in low-risk countries and professional courses can expect to receive higher loan amounts compared to students planning to study in high-risk countries and non-professional courses.
- Collateral – Providing collateral can increase your chances of getting a higher loan amount. Collateral can include property, gold, fixed deposits, and insurance policies. Offering collateral can help to reduce the risk for banks and financial institutions and therefore increase the chances of loan approval.
But looking at the demand for Overseas Education increasing day by day, year by year, many banks and financial institutions have eased up on their collateral criteria. Many top-tier and Best Bank for Overseas Education Loan offer collateral-free loans up to 40 Lakhs, and many NBFCs go beyond that number in terms of collateral-free loans.
In conclusion, the study abroad destination you choose and the course you take up has an immense impact on your loan requirement. As a financial institute does a thorough evaluation of your profile and only then do they decide on your loan application.
The question is, which bank is best for education loans for abroad? Well, get in touch with a loan advisor.
The Overseas Education Loan Consultants will not only help you choose the best financial institution, but they will also walk you through every step of the process of obtaining an education loan for international studies.
