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Education Loans for Study MBBS Abroad
Studying MBBS abroad is be a life-changing decision and, this isn’t tough these days. Those who want to pursue MBBS abroad, but finding it difficult to arrange for funds, now have the option to make arrangements for funding their education. In this page, we will cover each and every detail like the process to apply for a loan, eligibility, documents required etc. We will also cover various other aspects related to student loans like the Indian banks giving student loans or the role of a guarantor. We will cover each and every aspect for all those who are looking for an education loan for studying MBBS abroad.
Eligibility criteria to apply for the education loan
The most important thing is to check if you are eligible to apply for an education loan or not. Below are the usual criteria which Indian banks follow for checking the eligibility of the loan applicant is:
- The applicant should be a citizen of India.
- The applicant must have attained the age of 18 else his/her parents will have to take the loan.
- The applicant must have a good academic background.
- The applicant must have secured MBBS admission in a recognized foreign university/institution/college.
- The desired course which the applicant is going to study must be a technical or professional one, as banks give preference to job-oriented courses.
Documents needed to apply for Education Loan to Study MBBS Abroad?
Following documents are required to apply for an education loan for studying MBBS abroad:
- Filled application form
- Photographs: Passport size photographs of the applicant and the co-applicant
- Photo ID: Photo ID of the applicant and the co-applicant. It can be a PAN card, driving license, Voter ID card, Aadhar Card, or Passport.
- Residence proof: Resident proof of the applicant and the co-applicant
- Academic documents:
- Mark sheet and certificates of the applicant
- Mark sheet (Score Report) of NEET.
- Admission proof: Admission letter shared by the university or college.
- Bank statements: Last six months bank statements of the co-applicant
- Income proof: Income proof of the co-applicant
- In case of collateral (immovable property), it can be flat, home, or non-agriculture land the following documents are required:
- Property title deed
- Building approved plan
- NOC for a mortgage from builder or society
Technical Documentation
Apart from the above-mentioned documents, aspirants also need to have some other technical documents to avail a student loan.
- Title deed (all the pages to be attached)
- Copy of approved layout plan and permissions case specific
- Revenue document (Khata / Patta)
- Non-Encumbrance certificate
- Possession Certificate (In case the flat is taken from a builder)
- Latest Property tax receipt
- Copy of Prior sale deeds
- Conversion certificate
- Urban clearance certificate (Case-specific)
- BDA ALLOTMENT -NOC AND ALLOTMENT LETTER (Case-specific)
Legal documentation
In addition to the standard and technical documents, aspirants also need to have a list of legal documents for getting an education loan
- Sale /gift/partition deed in favour of customer – Minimum 13 years
- Khata / Patta Certificate and extract in the name of the current owner
- Encumbrance certificate – Minimum 13 years reflecting all sale transactions
- Latest Property tax receipt
What is the procedure for getting an education loan for Studying MBBS Abroad?
From loan application to approval and disbursement, the entire loan process is time taking, so it is always advisable to apply for a loan a little early. Follow these steps for applying for a student loan:
- Check the course in which you are going to study is recognized by the banks or not
- Figure out how much loan amount you require and how much you are going to arrange on your own
- Compare the student loan provided by different banks for studying abroad and go for the one which caters best to your needs.
- After finalizing the bank and the loan amount, fill out the loan application form and approach your bank.
- As soon as your loan is approved, the bank will issue a loan document that includes various elements of the loan
- After signing the loan document, the bank will disburse the amount in instalments or as asked by the university
Top Education Loans Providers in India for Studying MBBS Abroad HDFC Bank
HDFC Bank is one of the largest private banks offering education loans abroad. The maximum loan amount offered by the bank it up to INR 20 lakhs. In order to avoid the last-minute rush, the bank offers study loans abroad even before the student has secured admission at the university.
State Bank of India
SBI offers a maximum amount of INR 30 lakhs as an education loan for studying abroad with a loan margin of 15%. The Interest rate charged on the loan amount is up to 2% on the current base rate of SBI. Further, the loan repayment tenure can be 1 year to 15 years.
Axis Bank
Axis bank offers study loans abroad at competitive interest rates. A margin of 15% has to be arranged by the borrower if the loan amount exceeds INR 4 lakhs. The bank offers a maximum of INR 20 lakhs and covers different costs like tuition, accommodation, and books.
Punjab National Bank
PNB Udaan is the education loan scheme offered by the Punjab National Bank to students going to study abroad. The bank offers foreign education loans for students going to pursue graduate, post-graduate, job-oriented professional and technical courses. The borrower needs to show a loan margin of 15% for the loan amount of above INR 4 lakhs. Also, the bank offers the base rate as the interest rate on loans taken for pursuing an education at the top 200 universities across the world.
Study Abroad Education Loan from NBFCs (Non-banking financial companies)
Apart from the nationalized banks, student loans can also be availed from non-banking financial companies/institutions (NBFCs). Non-banking institutions offer complete tuition fees to the students. Borrowers need to provide collateral as security to the banks as the loan amount is generally more than INR 7.5 Lacs. Students looking for education loan for abroad studies can now have the option to secure a loan from NBFCs. Some of the NBFCs options are:
Credila: Credila is part of the renowned HDFC bank and provides loans to Indian students wishing to study abroad. The loans are given at a competitive floating rate of interest and can be repaid within a period of 10 years.
Avanse: Part of the DHFL group, it is considered as one of the most popular non-banking financial institutions in India. Student loans from Avanse cover tuition fees up to 100% and other expenses. Apart from this, the interest rates are floating and the processing fee can go up to 1 to 2 percent of the loan amount.
International Student Loan Program (ISLP): This program is specially designed for international students who want to study in the US. Through this program, students can borrow an amount as little as $1500 and can extend the repayment period up to 25 years. The loan disbursed under this program covers tuition fees and other expenses.
Global Student Loan Corporation (GSLC):
Credila: The GSLC offers loans to international students to pursue their higher studies in the US without the requirement of any co-signer.
Some of the loan schemes offered by Indian banks for Studying Abroad
SBI Student Loan Scheme: This scheme can be availed by Indian students who have secured admission in any institute in India or abroad. A maximum of INR 20 lacs can be availed at a nominal interest rate and it has to be repaid within 15 years. Also, if the loan amount is more than INR 7.5 Lacs, then borrowers need to furnish collateral as security. The repayment starts after one year of completion of the course.
SBI Global ED-VANTAGE Scheme: This loan can be availed by Indian students who wish to pursue a full-time course abroad. Students can avail of a loan of up to INR 1.5 crore and have to repay it within a period of 15 years. The borrowers need to provide collateral to secure this loan and will have to start repayment after 6 months of completion of the course.
HDFC Bank Education Loan for Foreign Education: This loan scheme can be availed by Indian students who wish to pursue studies abroad. The maximum amount available in this scheme is INR 20 lacs at a nominal rate of interest. Also, it offers tax benefits to the borrower and it can be sanctioned before admission as well.
Oriental Bank of Commerce Education Loan for Study in India and Abroad: This loan scheme is offered to students who wish to pursue their higher studies in India or abroad. If the student wishes to pursue his studies in the US, then the amount of the loan will depend on the fee structure of the institute they have applied to. The highlight of this scheme is that it does not charge a prepayment penalty from the borrowers and also give insurance coverage as well. The margin for the loan amount exceeding INR 4 Lacs is 15% on the loans taken for studying abroad.
Things to remember when taking an Education Loan for Studying MBBS Abroad
Moratorium period: This is the time period during which the borrower need not make any repayment to the bank. This period varies from bank to bank and could last up to sometime after completion of the course.
Loan Margin: Usually, banks do not provide the complete amount i.e. 100 percent money needed to fund the education. The majority of the public sector banks issue 90% of the total amount, the remaining 10% has to be arranged by the aspirant himself.
Effect of Exchange Rate: Always calculate the amount which you will be receiving at the time of disbursement, as any change in the exchange rate can affect the amount you will be receiving.
Collateral Rules
What is Collateral?
Any property whether movable or immovable, which can be offered to a bank as a security for a loan is collateral. Most Indian banks demand collateral as security in order to reduce the risk involved in paying off the credit.
Which type of instruments are accepted as collateral?
Any type of liquid assets like bonds, FD, shares or any immovable property like the house, any commercial property or just land can be classified as collateral. One important point to keep in mind is that agricultural land is not accepted as collateral. Even shares, bonds, bank deposits, mutual fund units, gold, debentures, bank deposits, life insurance policy, and government securities, are also accepted as collateral.
How can I get an education loan to study abroad without collateral?
Education loan has come as a big relief to those who want to pursue quality education but face a big challenge while arranging the funds. Now students can avail of a loan of up to INR 4 lacs without collateral. For loans, up to INR 7.5 lacs, parents or guardians are made joint borrower and third party guarantee is obtained. For loan exceeding INR 7.5 lacs property or any other asset is required as collateral.
How much can you borrow against collateral?
If you want to take the loan with your immovable property as collateral, in that case, the bank’s representative will verify your property and prepare a report on whether it can be mortgaged or not.
Also, the bank’s representative will evaluate your property. Based on this report, the loan amount will be approved.
Read the agreement carefully
This is one of the most important aspects to look after while taking the loan. We always suggest you go through the terms and conditions of the loan carefully and then move ahead with it. This is one factor we really stress upon, as you should always be clear with all the conditions mentioned in the loan agreement. If you have any doubts regarding anything then always consult the experts apart from the bank representative.
FAQs for foreign education loan
What is the maximum loan amount you can get for studying MBBS abroad?
As such, there is no limit set by the banks for offering education loans to the students abroad. It depends on the bank to bank. The majority of the banks offer loans maximum up to INR 20-30 lakhs. Also, if the loan amount is more than INR 20 lakhs then the interest rate also increases.
For which type of courses, banks offer education loans for studying MBBS abroad?
Generally, banks and NBFCs prefer to give loans for undergraduate and postgraduate courses. Also, the majority of banks prefer to give education loans abroad for pursuing job oriented and professional courses.
NOTE: These requirements can vary as per the banks’ own regulations.
Full Scholarships for studying MBBS Abroad:
Most foreign universities these days are trying to encourage students from other countries to compete for the MBBS Scholarships to Study Abroad. They can be difficult to get but there are a lot of options to choose from. These scholarships are mainly based on merit. There are some scholarships that are meant for needy students as well. There are a lot of students who are capable to study medicine in foreign universities but cannot do so because of financial problems. The students can avail the Scholarships to Study Abroad and fulfil their dreams.
Every university have their own rules and regulations. The best way to know about each university is through some online research. You can get the details about the Scholarships for MBBS on offer and then short list the universities you want to apply to. Then you can apply for MBBS Scholarships. You will be required to fill in some forms and also attach the score cards and results from your secondary and higher secondary schools. Since these Full Scholarships are mostly based on merit, these marks matter a lot
Getting a full scholarship can be difficult as it is a very competitive line. But if you have an impeccable educational background then you can be relieved. Most of the top colleges in abroad, providing quality MBBS education look for students who have a strong educational background. You will be required to take some tests as well which will prove your grasp over the English language. These test scores of these exams matter a lot while applying for the scholarship. The higher the marks, the higher will be your chance to get a MBBS Scholarships.
Apart from such various universities that are offering Scholarships for MBBS, also there are various financial companies in India that help students to get scholarships. You can get the details from their websites and apply for these scholarships. There are some prestigious scholarships given by the Government of India as well. These are purely based on merit. There are many options to choose from while applying for full time scholarships. You need to fill in the forms of the various places and attach all the required documents properly in order to ensure that you get complete chance of getting shortlisted to get the Scholarships for MBBS.
Education Loans are seen as a reliable investment by many since they give assured returns. The entire process of education loan may seem daunting to students and their families since it requires a lot of time and efforts. However, the process has been remarkably simplified over the years for the ease and comfort of borrowers and their families. With basic guidance and care at every step, students can complete the loan process without any hassle or complication. You can also contact India’s leading education loan providers through Shiksha Study Abroad.
While the loan application, approval, disbursement and repayment process may differ among various financial institutions, most financial institutes follow a simple procedure with expert guidance on every step.
The following steps are involved in an education loan process :
Step1: Determining the cost of education and loan amount Begin with determining the overall cost you expect to incur during your study period. This cost includes tuition fee, books, accommodation, food, transportation and personal expenses, etc. This information can be easily obtained from the university website or student office. Your admission offer letter may also include the amount you need to dispense for your course every year/semester. Once you have the complete cost of education, you can figure out the amount of education loan you will need.
Step2: Compare Education Loans from different lenders The next step after determining your loan amount is to find the right lender. There are many banks and financial institutions in India that provide education loan to students studying in India and abroad. Approach them with your requirement and enquire about their education loan products. Some education loan providers even provide doorstep service and customized education loans to make the entire process simpler for students and their families. It is advised to base your decision on your unique needs and factors like interest rate, processing fee, income tax benefits, collateral, margin money, disbursement and repayment terms, etc.
Step3: Applying for an Education Loan Once you have chosen your lender, they will ask you to fill out an application form. Most lenders have an online loan application form for students to fill. It is advised to fill correct information in these forms as discrepancies may be seen as wilful distortion of data and can lead to loan rejection. The loan application form covers student’s academic qualification, nature of course applied for, family income, co-borrower’s earnings and credit profile.
Step4: Reading and Signing the Loan Document Once, and if, your loan is approved, the lending bank/financial institution will issue a loan document which outlines the various elements of the education loan along with the terms and conditions associated with it. This document includes, among other details, the loan amount that has been approved after evaluation of the applicant’s and co-applicant’s profiles, the mode/amount/timeline of disbursement to the concerned university/college, the interest rate, the loan tenure, the duration of moratorium period, the amount to be repaid, the amount and number of EMIs and the repayment terms. It is highly recommended that you read this document in detail and get your queries/doubts cleared before signing it.
Tell Us About Yourself
When do you plan to start ?
- 2021
- 2022
Have you given any study abroad exam ?
- Yes
- No
- Booked
Step5: Disbursement and Repayment Once you have signed the loan document, the bank disburses suitable instalments directly to the concerned educational institution according to the fee schedule of the same. The loan sanction letter can also be used as a proof of funds for securing admissions in foreign universities and for applying to student visa. In cases of foreign education, banks pay in the receiving country’s currency and may charge you a remittance fee for the same.
The repayment begins after the moratorium period which may differ among banks and can vary from six months to one year after the completion of the course. The repayments are made in EMIs which are constituted of a portion of both principal and the interest amount.
The education loan process has become simple owing to a massive reserve of information available online and expert guidance of education loan specialists at every bank and financial institution.
Below are some other points that must be paid attention to during the loan:
- Check if your course is eligible for education loan. Courses that have a high employment probability have a better chance of approval for education loan. The reputation of the college/university also plays a vital role in loan approval. Also, not all banks extend financial aid for diplomas and vocational courses.
- Education Loan availed from gazetted banks and financial institutions are only eligible for tax benefits under Section 80E of the Income Tax Act of India, 1961. Ask for the Gazette Certificate of the financial institution to check eligibility for rebate in income tax.
- While some banks cover the complete cost of education including tuition fee, books and equipment cost, library and examination fee, one-time travel expense (in case of foreign education), personal expenses, etc., some banks cover only a part of it.
- Following types of collateral are accepted by most banks – Residential property (house/flat/bungalow), fixed deposit, life insurance, non-agricultural land.
- Give yourself ample time to research, analyze and compare different education loan products to avoid last-minute rush and resulting complications. It is advised to start early for a smoother experience.