The lookouts for taking education loan for studying abroad
Are you also someone looking to study in abroad but confused about how to go about taking a loan? Then this read is for you...
The world is getting smaller, and the opportunities are becoming global. The younger generation in India is very well aware of this transition and that is the reason more than 2.5 lakh students last year took the overseas route for getting their education. This is a huge number which is increasing every year with more and more students eyeing to kick start their career from abroad; And for undertaking this new journey in distant lands, their biggest enabler proves out to be an education loan.
Tuition fee, living, travel and a host of other expenses are not easy to manage upfront going to another country and most of us have plans to stay further in that same land for job search after the completion of degree. So the big question which comes up is that how much funds should one ask for from a financial institution before stepping out for studies to abroad? The right answer to this dilemma lies in mapping one’s pursuant degree with the prospective job offer one can land post completion of education. A good assessment of this would be to calculate their repayment tenure on their education loan. For example – If one is going to pursue masters in environment science to USA which costs INR 50 Lakhs and he or she is confident to land a job of $50,000 post completion of it, so post taxes and deduction if one can save INR 10 Lakhs per year, thence the debt seems fairly reasonable to be paid out in ~6 years of time with interest. Similarly, every student can customize this estimate based on their costings and earnings to estimate their repayment tenure before opting loans.
The next parameter to be checked before opting for education loan is finding the right financial institution for it. Unlike Indian banks lending for IITs and IIMs at lowest rates of interests (somewhere around 8% per annum in today’s scenario), for overseas education loan these rates go upto 14% per annum. So, it becomes imperative to find the right lender who can provide fair correlation between the course and university opted for with the correct rate of loan interests. In some scenarios, when these right parameters don’t meet for the financier to lend, a student might have to mortgage assets to fund their education.
In today’s testing scenarios, banks and other financial institutions are getting more wary to lend for overseas education doubting the job prospects. However, the silver lining in this respect have been stepping up of international partners in providing fair financial assistance to students qualifying for valued programs into prestigious universities. This has been possible on grounds of relaxed immigration policies reassuring the lenders that political and macro-economic factors would not be a hindrance in getting right job opportunities for a prospective overseas student. Maybe, if major Indian banks could also come up with such evaluation parameters like employability prospects for a student taking education loan for studying abroad, it may turn out to be a great help for talented Indian brains. However, we at Finns&Marks have been constantly helping out folks to provide best of information in the most lucid modes and if you like our work then don’t forget to subscribe us:
By: Anmol Gupta | Isha Garg