Studying abroad is a dream for many. However, it comes with various expenses. To cover expenses for study abroad, a student usually requires financial assistance. According to the Bureau of Immigration, 7.6 lakh Indian students went to study abroad in 2023, and around 17.6 K Crore was disbursed by Indian banks for education loans.
Indian banks offer Secured as well as Unsecured education loans for abroad studies. Secured loans usually have lower interest rates than Unsecured loans. A secured loan is offered when the candidate offers a guarantee of collateral in the form of a plot, house, fixed deposit, or government bond. However, when a Candidate doesn’t have collateral or security, he is offered an Unsecured loan.
How do Indian Banks Impose Interest Rates?
The Reserve Bank of India (RBI) decides the interest rates. The Monetary Policy Committee of India (MPC) has announced the repo rate at 6.50% (increasing from 6.25%), while the reverse repo rate is 3.35%. The Bank Rate and the Marginal Standing Facility (MSF) rate is 6.75%, and the Standing Deposit Facility Rate is 6.25%.
Based on the mentioned percentage, the current education loan for study abroad is 8% - 12% for collateral (secured) loans in public and private banks. The interest rate may vary from 9% - 13% in public and private banks for no-collateral (unsecured) loans.
Repo Rate: RBI lends money to the banks based on the repo rate. A higher repo rate makes funds expensive for banks, so they charge higher rates from the borrowers.
Reverse Repo Rate: RBI borrows funds from commercial banks in exchange for government securities. A lower reverse repo rate usually results in lower interest rates.
How can you Secure Lower Interest Rates from Indian Banks?
A Co-signer with a strong financial profile, a high CIBIL score, and fewer existing debts can lead you to lower interest rates.
Provide high collateral security for secured loans as the interest rate is based on the security. The interest rate can be lower if the collateral you provide is higher.
A good academic record can lead to better interest benefits. Several banks offer special loans with lower interest rates for admission to top universities and institutions.
The Indian government offers tax benefits to students qualifying for study abroad. According to Section 80 E of the Income Tax Act, any student who has taken a secured education loan to study abroad can apply for tax concessions.
A Co-signer with a strong financial profile, a high CIBIL score, and fewer existing debts can lead you to lower interest rates.
Provide high collateral security for secured loans as the interest rate is based on the security. The interest rate can be lower if the collateral you provide is higher.
A good academic record can lead to better interest benefits. Several banks offer special loans with lower interest rates for admission to top universities and institutions.
The Indian government offers tax benefits to students qualifying for study abroad. According to Section 80 E of the Income Tax Act, any student who has taken a secured education loan to study abroad can apply for tax concessions.
Need Help Choosing the Right Loan?
Understanding the nuances of education loans for abroad studies can be tricky. This is where professional guidance plays a key role. If you're unsure about where to start or which loan suits you, working with Study Abroad Consultants can make the process seamless. Consultants can guide you through interest rates, lenders, and required eligibility criteria.
Study Abroad Loan Eligibility Checker
One crucial step before applying for an education loan is knowing whether you qualify. Using a Study Abroad Loan Eligibility Checker can save you time and effort by quickly determining the loans you're eligible for based on your academic background, financial profile, and preferred destination. Tools like this simplify your loan journey and ensure you connect with the right lender.
Why Choose Nomad Credit for Your Education Loan?
One-Step Solution: We offer personalized assistance and support at no cost. With our end-to-end support, you can be well-prepared for your loan process.
Expert Guidance: With the guidance of our top experts and counselors.
Multiple Lenders: We are well-interconnected with lenders that offer education loans, making the process easy for you.
Higher Chances of Approval: With our expert guidance and expertise in loans, we match your profile with the best lender for you, increasing your chances of approval.
One-Step Solution: We offer personalized assistance and support at no cost. With our end-to-end support, you can be well-prepared for your loan process.
Expert Guidance: With the guidance of our top experts and counselors.
Multiple Lenders: We are well-interconnected with lenders that offer education loans, making the process easy for you.
Higher Chances of Approval: With our expert guidance and expertise in loans, we match your profile with the best lender for you, increasing your chances of approval.
Nomad Credit ensures you secure the right education loan, guiding you every step of the way. Whether you're exploring education loans, consulting for study abroad services, or checking your loan eligibility, our team is here to assist you.
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