FAQ

For an Education loan typically followings are considered as eligibility criterias -
a. Indian Citizen or NRI
b. Student previous academic performance
c. Student test scores i.e. GRE, GMAT, IELTS, TOFEL, Duolingo, etc
d. Aspired university and the program
e. Co-borrower’s income
f. Credit score

Secured/Collateral Loans: These loans require collateral such as property, fixed deposits, or other assets. In this students have to pledge the collateral for getting the loan amount.
Unsecured/Non-collateral Loans: These loans do not require collateral. In this lenders offer loans based on Student’s academic profile and Co-borrower’s financial profile.

Education loans typically cover total tuition fees, examination fees, hostel expenses, travel expenses, and purchase of books, equipment, and instruments.
The loan amount can vary depending on the course, institution, and lender policies. Generally, banks offer Non-collateral loans up to a certain limit for studies abroad.

a. Student Docs
i. Education mark sheets and certificates- 10th, 12th, Degree
ii. Proof of admission for the course**
iii. Entrance exam scorecard
iv. KYC docs - PAN, Aadhar, Passport
v. Proof of residential address - Utility bills i.e. electricity, water, etc

b. Co-borrower Docs
i. KYC docs - PAN, Aadhar, Passport
ii. Proof of residential address - Utility bills i.e. electricity, water, etc
iii. Income docs
● For Salaried - Salary slips, ITR and Bank statements
● For Self Employed - ITR, Bank statements, Business proof, GST registration, etc
● Farmer - Agriculture Income Certificate, Bank statements, Pattadar Passbook

Yes, students can apply for an education loan even without any co-borrower. International Lenders provide loans without considering any co-borrower and only based on student profile.
Students have to choose Universities and Programs which are listed with the International Lenders to get an education loan.

Fixed Interest Rate: A fixed interest rate remains the same for the entire duration of the loan or a specified period. This means that the interest rate does not change regardless of changes in the economic environment or fluctuations in Repo Rates, MCLR, etc.

Floating (or Variable) Interest Rate: A floating or variable interest rate can change periodically based on fluctuations in market interest rates or benchmark rates. Typically, the interest rate is tied to an index, such as the Repo Rate, MCLR, LIBOR (London Interbank Offered Rate), SOFR, or another benchmark rate.

Typically, when you apply for an education loan, the bank or financial institution disburses the Tuition Fee directly to the educational institution (university or college) where you have secured admission. This process ensures that the funds are used specifically for educational expenses. However, Living Expenses and Misc is disbursed in the local bank account which can belong to either student or co-borrower.

This needs to be completed - shiva@fundabroad.comSonika Rani

In Education loan moratorium period is provided which is also called as holiday period. It is usually course duration + 1 year after which repayment of the loans starts.

Students can start the loan repayment immediately after getting a job post course completion or even prior to that. Part payments are acceptable in education loans and in fact pre-closure is also permissible.

a. Under section 80E of the Income Tax Act 1961 the complete interest amount of a student loan can be claimed as a tax-free expense
b. Under section 80C of the Income Tax Act 1961 an individual can claim an interest portion of up to 1.5 lacs from the total taxable income.
c. TCS on foreign remittance: When you send money abroad, you need to pay TCS on foreign remittance. TCS is 20% if you are sending money from your account and it is 0.5% only if money is coming through an education loan, so there is a saving of 19.5% on foreign remittances.

The repayment period can vary but is usually between 10 to 15 years, depending on the loan amount and the terms agreed upon with the lender. Lenders offer a period of additional 1 year after course completion as a moratorium period after course completion.

Credit score or CIBIL score is the measure of the financial credibility of any individual. A person with a good CIBIL score which is usually 600+ has a greater chance of getting a student loan faster.

Range of CIBIL score -
a. 300-599:
If your credit score is in the range of 300-590 it is very difficult to get an education loan from any lender.
b. 600-749:
For credit scores between 600-749, you will qualify for an education loan.
c. 750-900:
A credit score of 750 and above is highly favourable and can lead to instant loan approval with good loan terms and conditions.

Score above 750 is considered a good CIBIL score.