Wed. May 29th, 2024

Quality education is the foundation upon which you can build a better future for yourself and your family. As a parent, you’re sure to want to give your children the best education possible, so that they get a head start in their careers. However, quality education comes at a steep price that runs into tens of lakhs of rupees, regardless of whether you pursue a course in India and abroad.

However, since this is an expense no parent wants to skimp on, the best way to approach it is with an education loan for abroad studies as it will ease the burden on your finances. This loan is offered by most financial institutions either as a secured or unsecured offering.

While it a beneficial tool, remember that it is still has several terms and conditions. To help you understand better, here are the important elements of an education loan that you should know of before you apply for one.


Education loans generally fund up to 95% of the total fee if your child is studying in an Indian college or university. However, in case of an overseas university, you will get up to 85% of the college fee as a loan. In both cases, the remainder will be an out-of-pocket expense.

Typically, education loans offer two types of sanctions. You can get up to Rs.4 lakh as an unsecured sanction that does not require collateral or a third-party guarantee. For loans over Rs.4 lakh and up to Rs.7.5 lakh, you will have to provide collateral or third-party guarantee to qualify for a sanction. It is important to note that the sanction, if approved, is directly transferred to the educational institute. This means the lender pays your child’s fee on your behalf.

Eligibility Criteria

Education loans have strict eligibility criteria, and in order to qualify for the loan you will have to fulfil the following terms and conditions.

  • The applicant in this case is your child and he/she must be a citizen of India aged over 18 years. If the applicant is underage, as a parent, you can apply on his/her behalf
  • The child must have a stellar academic record
  • The child must have secured admission at the institution for which he/she is seeking a loan, before applying for it
  • The course that your child is planning to pursue must be professional and job-oriented


Repayment Policy

Generally, an education loan is repaid by the student. The repayment window begins at the end of the course and some lenders even offer a relaxation period of 6 to 12 months to give the applicant some time to secure a job. This way your child can use a small fraction of each salary to repay the loan.


The interest rate on education loans for higher studies is based on the Marginal Cost Of Funds Lending Rate (MCLR). However, depending on the lender you choose, it may also be linked to the external benchmark system. Keep in mind that the rates fluctuate as per RBI policy changes, so it’s necessary to keep a tab on the latest information before applying for the loan.


The application process for an education loan requires a lot of effort and careful planning. It can take a while to get approval so it is best to get started early. First and foremost, you need to check if the course your child is planning to pursue is recognised by the lender. Then, find out the exact amount you will require and understand the collateral requirements. After having all the information and documents in place, fill out the application form with help from a representative.

As you’ll notice, a typical education loan for higher studies, while useful, has tedious borrowing protocols in place. This reduces the quality of your borrowing experience as it adds a level of difficulty. Upon comparing a personal loan vs. education loan, you’ll find that a personal loan is a far superior financial tool, especially for education-related expenses. Relaxed personal loan eligibility criteria allow you to easily obtain this loan and top-tier lenders even offer additional features such as instant approval.

For example, you can access up to Rs.25 lakh via a Bajaj Finserv Personal Loan for Higher Education at competitive interest rates. This combination allows you to affordably pay for overseas education costs and have leftover funds for other related expenses. Moreover, you can repay the loan through a flexible tenor of up to 60 months, based on your financial standing. To benefit from all these features and more, check your pre-approved personal loan offer and apply using customised deals that suit your needs perfectly.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *