Hyderabad: More and more Indian students are aspiring for overseas education regardless of its rising costs and considering easy access to bank loans. Education in foreign universities specially in developed countries involves a great deal of expenditure. Against this backdrop, parents are not hesitating to take any amount of loan besides spending their hard earnings and savings for their children's future. A lot of homework has to be done to get a decent loan to meet overseas study requirements.
In recent years, the number of children going abroad from India has increased considerably. At the same time, the cost of higher education overseas is expected to go up enormously in the coming years. According to surveys by some noted organisations, Indian students are spending a whopping 28 billion dollars for foreign education. This is expected to rise further to 80 billion dollars by 2024 in a matter of two years.
Though foreign students get scholarships and work permits, most of them do not get eligibility. As such, bank loans would be badly required. To meet this requirement, the Government of India, Reserve Bank of India and the Indian Banks Association have formulated an integrated plan. As per this, one can get overseas education loan to cover fee relating to college, hostel, exam, laboratory, books, tools, caution deposit, building fund and refundable deposit as well.
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As of now, banks are sanctioning education loan up to Rs 7.50 lakh from credit guarantee funds without seeking any securities. It is likely to be proposed to increase this limit to Rs. 10 lakh soon. The SBI, HDFC and other banks are giving Rs 40 lakh to Rs 50 lakh loans without securities for students joining foreign universities approved by them.
Students seeking loans for higher education should have to produce certificates of their studies, qualifying examinations and entrance tests along with documents like admission letter, form I-20 for foreign education, fee structure, KYC documents applicant, co applications and sureties, PAN (including minors), income tax returns, property documents and Aadhaar (needed for Government's interest waiver scheme). Banks will give more loan for mortgage loans and at lesser interest considering absence of risk in this.
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Utmost discipline is required to repay an education loan. One should take only an amount required to pay fee but not all offered in loan offer letter of the bank. Interest will be collected only on the disbursed amount. On completion of studies and once earnings started, the loan repayments should be started promptly. If repayments are not proper, banks will send notices and your credit score will get affected.
Complete tax exemption is given on interest for education loan under Section 80 of the Income Tax Act. So, one should gather all such details before taking an education loan. A thorough research should be done during selection of courses, their expenditure and other details. Banks will not give loans for admissions in blacklisted colleges abroad. In visa interviews, they may ask questions not only on your education but also on your selected course details, professors and college fee to find out how much awareness you have on your future plans.
