How To Get A Personal Loan For Abroad Studies

A borrower can use a personal loan to pay for any family member’s education. Read on to know how to apply for a personal loan for abroad studies.

10 Oct,2022 12:23 IST 132
How To Get A Personal Loan For Abroad Studies

Education courses abroad have become a favourite with students in India. These courses, however, are costly, leading to most parents seeking education loans for their wards.

Education loans have the advantage of lower interest rates and the repayments start a few months after the completion of the course for which the debt was taken. The caveat is that these loans are not so easy to get and funding foreign education through savings may not be easy either.

But there are ways to still fund foreign education without breaking the fixed deposits or selling family silver. Personal loans can help give wings to your dream of foreign education. On the flip side, personal loans will have higher interest rates than education loans and the repayment will start almost immediately, but they do have a few advantages.

Collateral-Free:

Personal loans usually are collateral-free, making them easier to get for a person who doesn’t have assets such as property or gold.

Freedom Of End Use:

Education loans can only be used to pay fees for the course and may not include expenses such as food, stay, air travels etc. With personal loans one can cover all these and in proportion that they desire.

Education And Job:

Many students have to come back after study if they don’t find a job and don’t have means to sustain abroad after completing their courses. Education loans don’t cover these stay-overs. With personal loans one can stay back and find a job at their own pace.

Faster Approval And Disbursement:

Personal loans can be availed within days and with minimal documentation, helping a student get a jumpstart into their foreign courses.

Co-Funding:

Most education loans require students to cover a part of their fees. However, in personal loans there is no such criteria and one can cover not just the full fees but other allied expenses, too. Many lenders in India offer a personal loan for studies in a range of Rs 25-50 lakh. The applicant's age, income, employment status, repayment history, and credit score are examined by the lenders for the loan amount.

The principal, interest rate, and length of loan repayment all play a role in determining the equated monthly installments (EMI). Following factors need to be taken into account when one avails a personal loan for studies abroad:

Interest rate:

Approach as many lenders as possible and take the loan from the one giving the most favourable interest rate and repayment terms. In case of a personal loan for studying abroad it is advisable to have a longer repayment tenure so that you can help with EMIs after getting a job.

Amount:

Applicants must accurately estimate all expenses, including those for travel, stay, coaching, and study materials, etc. It is advised to do the calculation based on the cost of living in that nation. Also, borrowers must take into account the average inflation in the country of study so that more loans are not needed.

Conclusion

While an education loan will offer a lower interest rate for studying abroad, it may elude a student or parents due to a low credit score, need for collateral and higher scrutiny of documentation.

Personal loans, on the other hand, will be easier to take out and offer ease of end use as well as flexible repayment options.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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