JOIN USThe essential guide to funding your studies abroad
Higher education abroad is a dream for many students. However, finances are crucial for this dream to take flight. Many Indian students dream of studying abroad in a top global institution. However, a lack of funds stifles any such aspirations.
Recognizing the financial difficulties students face today, multiple public and private lenders have created education loan schemes to cater to students seeking to study abroad. Different banks provide various education loans, so selecting the appropriate one might be difficult.
Options for funding undergraduate programs
Students intending to study in overseas universities can explore multiple options to fund their education abroad. Here's what one can look for:
Scholarships: Procuring a scholarship is one of the most popular ways to fund higher education abroad. There are different types of scholarships available for students, and all you need to do is find the right one to apply to after going through the eligibility criteria. This drill is critical since different scholarships target different demographics.
Some of the scholarships available are:
- Merit-based scholarships
- Sports scholarships
- Specific scholarships
- International and independent organizations fellowships
Education loans: Education loans are a great financial respite for students from lower and middle-income families who dream of studying overseas. Bank loans are a popular mode of financing overseas education globally. Many public and private banks in India offer education loans to study-abroad aspirants.
Banks' education loans are of two types: collateral loans and without collateral Loans.
Collateral loans are secured loans that require the borrower to use some form of collateral as security. It could be a piece of real estate, an insurance policy, or a fixed deposit, which is used to secure the loan. Secured loans offer a lower interest rate and a longer repayment time than unsecured loans. Students who apply for secured loans do not have to be concerned about their parents' income because it is not required for loan approval. Only after the studies are completed does the payback begin.
Borrowers who take out unsecured loans are not required to put up any security. These loans have a higher interest rate and require parental income approval. Because unsecured loans are risky for banks, the repayment time is shorter, and a portion of the loan must be repaid during the study period.
When applying for a loan, a student must consider the type of loan that will best meet their purpose and repayment capabilities. All components of repayment, interest rate, and other factors should be carefully considered. When applying for a school loan, make the intentional decision to go with a flexible interest rate. The RBI's rate adjustment, which is directly connected to inflation and other factors, will benefit a variable-rate loan.
Once you have decided the type, you need to follow specific steps to apply for the same:
- Check whether you are eligible for the loan.
- Compare your available alternatives and decide based on the one that suits your needs and repayment capacity.
- Select the lender of your choice and apply for the education loan online
- Once your loan is approved, the bank will issue loan documents detailing various loan elements.
- After you sign the loan document, your bank will disburse the loan amount either in instalments or as required by your university.
Remember procuring an overseas education loan is a time-consuming process. Make sure you apply well before time to stay on track for your study abroad journey.
Part-time jobs: Another option is to work part-time while studying abroad to help pay for your education. Although the revenue gained may not be enough to cover your tuition, it will assist you in meeting a portion of your living expenditures. The terms of your visa determine your ability to work. Check your visa to see what kind of work you can do.
Though scholarships and education loans are the most popular modes of funding higher education abroad, there are a couple of alternatives more available to students intending to study overseas. One can also explore the option of exchange programs and sponsorships (corporate sponsorship, company scholarships, etc.) to fund their higher education abroad. While there are many options available, choosing a mode or a combination of methods that can cover your educational needs during your study years is wise.
(Ashish Fernando is founder and CEO of iSchoolConnect, a AI-based Edtech company)