According to a Ministry of External Affairs report released in 2019, more than 7.5 lakh Indian students were pursuing their academics at universities located in foreign destinations. A degree from a prestigious university abroad can secure one’s future, allowing him/her to pursue the best career opportunities. Nevertheless, funding such education can be difficult, bringing to the fore the importance of an education loan for abroad studies.
These personal loans not only allow borrowers to meet the hefty tuition fees but also provide sufficient backing to lead a comfortable life abroad, without overburdening personal finances.
What is a personal loan for abroad education?
As the name suggests, an education loan for abroad studies helps finance a student’s academic pursuits outside India. However, unlike a traditional education loan, one does not need to submit proof of college admission or other such documents to avail this personal loan. Moreover, as it is unsecured credit, individuals do not need to collateralise any asset to avail such a loan.
Eligible applicants can avail a substantial quantum via such a suitable credit facility to finance higher education. Most lenders also offer flexibility in tenure, ensuring smooth and hassle-free repayment.
Why should you apply for an education loan for abroad studies?
Individuals who excel in academics can finance a great education abroad with such a personal loan. Here are some reasons why you need to consider opting for such a loan.
1.No end-use restrictions
A personal loan for higher education abroad does not come with any restrictions on the purpose of spending the loan proceeds. Individuals can use a portion of the funds for tuition fees and the remaining to acquire suitable lodgings for their stay during the course duration. Alternatively, one can use the principal amount for other expenses as well, like travel ticket bookings, daily commute, etc.
Such freedom to use the advance amount suitably usually lacks in traditional education loans. In such cases, lenders often pay the sum directly to the college or educational institute in question instead of to the borrower.
2.Substantial ticket size of loans
The utility of an education loan for abroad is maximised if the proceeds are significant enough to cover college tuition expenses, thus reducing the strain on personal finances.
Fortunately, most lenders are ready to extend a considerable sum as a loan to students with potential since the likelihood of timely repayment is high in such cases. Depending on the financier one chooses, personal loans may range up to Rs.25 lakh.
Most lending institutions offer flexibility when it comes to the repayment period of a personal loan for education. Borrowers can opt for up to 5 years to repay these credits. Choosing an extended tenure can result in lower monthly instalments, which can reduce the financial burden considerably. Keep in mind, though, that longer repayment results in higher total interest outgo and decide accordingly.
Financial institutions are quick to approve and disburse such loans, provided the applicant meets all eligibility criteria for the same. In some cases, disbursals can occur within 24 hours of application. Thus, if students are in immediate need of funds, these personal loans are the ideal way to meet their requirements.
Reputed financial lender, Bajaj Finserv provides pre-approved offers to ensure faster and simpler loan processing. These offers are available on several financial products, such as personal loans, business loans, and more. You can check your pre-approved offer by providing your contact details and full name.
5.Tax benefits on higher education loan
Individuals often fail to consider the tax benefits of a personal loan for education. As per the Income Tax Act, Section 80E offers a provision whereby borrowers of such loans can avail sizeable tax deductions on the interest payable. However, no such deductions are available on the principal repayment. Nevertheless, opting for these education loans for abroad studies can significantly reduce the borrower’s tax outgo for the year.
6.Simple documentation process
Personal loans for higher education do not require one to undertake a strenuous documentation process. In most cases, lenders require KYC documents, income proof and a few other pieces of information to get a borrower’s loan application underway. Thus, one does not need to submit the proof of admission to colleges or universities, mark sheets and any other academics related documents.
Apart from funding education, a personal loan can also help in paying out student debt. If you have such dues outstanding, without the ability to repay at present, a personal loan can help clear your liabilities. You can then service the EMIs responsibly and clear yourself of all debt.