Many students aspire to study in prestigious international universities, dreaming of a global education experience. To realise this dream, they must diligently acquire knowledge, strategically plan their academic journey, and skillfully manage their finances, ensuring a smooth transition into their desired educational institutions.
As there is fierce competition to acquire university scholarships, Indian students can explore public or private education loans designed specifically for studying abroad, offering a viable means to finance their educational aspirations.
CRISIL, a global credit rating agency, predicts a significant40% growth in education loans provided by non-banking financial companies, amounting to an astounding ₹35,000 crores in the fiscal year 2023-24. Approximately 90% of these loans are utilised for international education, with the remaining portion supporting studies within India.
The surge in demand for education loans among Indian students seeking education abroad can be attributed to various factors, including the expenses associated with studying and living in a foreign country. Additionally, students recognise the value of upskilling, reskilling, vocational courses, and executive programs that provide a competitive edge in today's globalised world.
Types of financial barriers
The journey to securing education loans encourages students to showcase their resilience and unwavering determination, empowering them to overcome any obstacles that come their way. While challenges such as gathering margin money, dealing with an inefficient credit score for them as well as their respective co borrowers, or facing admission disappointment can dampen students' spirits, they should equip themselves with viable solutions to overcome them and persist in their quest for educational funding.
Optimistic loan choices to overcome the barriers
Students can choose from a host of loan options to finance their dream of studying abroad.
- Governments offer education loans specifically tailored to support students pursuing higher education abroad. These loans often have favourable interest rates, flexible repayment options, and extended repayment tenures.
- Private education loans from banks and financial institutions are also an alternative, covering tuition fees, living expenses, and related costs. However, they may require collateral or a co-signer, and their terms and conditions may vary.
- International student loans cater to students studying abroad, offering relaxed eligibility criteria and flexible repayment options. These loans have become an attractive choice for students facing financial barriers.
- Lastly, scholarships and grants are valuable sources for decent financing to support your education abroad.
Overcoming financial barriers
Thorough research and comparison of lenders are vital when considering education loans. Students should explore multiple options, considering interest rates, repayment terms, processing fees, and customer reviews. Being well-prepared with the necessary documents, such as admission letters, identity proofs, income statements, academic records, and visa-related documents, is essential during the loan application process.
Once students secure an education loan, effective repayment planning is crucial. Understanding the repayment terms, budgeting expenses, and utilising the loan amount judiciously are essential for timely repayment and financial stability. Inquiring about early repayment or prepayment options can save on interest rates. Ultimately, students must exercise financial responsibility throughout the process.
Global continents offer immense opportunities for Indian students seeking higher education abroad. Education loans, scholarships, and grants are essential tools to finance these aspirations. Thorough research, proper documentation, and financial planning are crucial at every stage. By adopting prudent financial habits, students can navigate the loan process, ensure timely repayments, and build a secure future.
Amit Singh is Founder of UniCreds