Every year, lots of people in India dream about studying abroad. Recently, the Ministry of Foreign Affairs found that more students decided to go overseas when the pandemic started. They predict that in 2024, about 1.8 million students will spend a whopping $80 billion on studying abroad.

If you take out an education loan for abroad studies, you can use the money for anything related to your education and not just college fees. You can pay for things like tuition, books, and living expenses while you study abroad. It’s supposed to cover all the costs you might incur during your time studying away from home.

The Need for a Top-Up Loan

Sometimes, even with careful money management, students might find themselves facing unexpected expenses during their studies. When this happens, they might need extra money beyond what their initial education loan for abroad studies covers. That’s why a top-up loan can help. A top-up loan lets students borrow more money on top of what they’ve already borrowed for their education. It saves them the trouble of getting a completely new loan.

The Value of a Study Abroad Loan

The introduction of education loans in 1995 by the State Bank of India opened up new opportunities for students facing financial constraints. These loans have become a lifeline for many individuals who otherwise wouldn’t have been able to pursue higher education. Nowadays, most banks in India, whether public or private, offer education loans and further expand access to higher education for students in need.

Getting Loans for College Can Help You in Many Different Ways.

Loans for higher education offer more than just covering tuition costs. They come with various benefits, including:

• Emergency Funds: Students can set aside funds for emergencies separate from their regular savings.
• Stationery and Laptop Expenditures: These loans can help offset the costs of essential items like stationery and laptops.
• Project Expenses: Students can use these funds for expenses related to projects and other university activities.

When considering top-up loans, it is advisable to approach the same financial institution that provided the initial home or student loan. This can streamline the approval process and make it is easier to secure the additional funds needed for education.

Here are the two scenarios:

The first scenario:

Imagine you already have a loan for your undergraduate studies in your country. Now you’re planning to pursue a master’s degree abroad in the USA, and you need an additional loan for that.

For your undergraduate studies, you borrowed 5 lakhs and had a moratorium period of 1 year, meaning you didn’t have to start repaying immediately. Now you want to take a top-up loan for your Mastеr’s dеgrее totalling 40 lakhs and make your overall loan amount 45 lakhs (including both loans).

Your repayment for the first education loan for abroad studies will start after the moratorium period ends and will be a total of 6 years plus a grace period of 6 months to 1 year. It’s a good idea to obtain the top-up loan from the same bank from where you got your initial loan. You’ll need to write a request for the top-up loan and ask for an extension of your moratorium period.

That’s it! Just make sure to keep things straightforward and communicate clearly with your bank.

The second scenario:

Imagine you’re a student who’s already taken out a loan to study abroad for a four-year bachelor’s degree totalling Rs. 40 lakhs. Luckily, you have a grace period of one year before you need to start repaying the loan. Now that you’ve finished your bachelor’s, you’re eager to pursue a master’s degree abroad. You’ll need an additional two-year loan for 30 lakhs to cover your expenses and bring your total loan amount to 70 lakhs.

Once your top-up loan is approved and you want to start making payments until after you finish your master’s degree, you’ve used up the grace period provided by the bank. This setup takes off the pressure of repaying loans while you’re still studying.

You’ll need to inform the lender about the change in your moratorium period. If you ever need advice, feel free to reach out to a financial consultant. They’re here to help you make informed decisions about your finances.

Sеcurеd Ovеrsеas Education Top-up Loan

Lots of students might need another loan for studying abroad, like a secured education loan, especially those offered by a government-backed bank. This is because private lenders don’t cover the same benefits as banks backed by the government, like lower interest rates and such.

When thinking about getting a second education loan for overseas studies, it is really important to consider the value of the stuff you’re offering as collateral. If you’ve already used something valuable as collateral for a loan before, you’ll need to check if it is still worth enough to cover the new loan.

If you’re applying for another loan from the same bank where you got your first one, there are a couple of things to remember. Two main things could happen when you’re taking out a second loan for education.

If you’ve already started paying back your first loan, you need to keep making your payments on time and just like you agreed to.

Education Loan Without Collation

When students want to pursue their dreams through education, money shouldn’t stand in their way. That’s where education loans without collateral come in. These loans don’t require students or their families to put up valuable assets like a house or car as security. This means less stress about finances and more focus on learning.

With these loans, students can cover tuition fees, living expenses, and other costs associated with their education. Education loans without collateral are a simple way for students to get the financial support they need without worrying about complicated paperwork or putting their belongings at risk.

Education Loans Without Collation and Co-Applicant

For students who want to handle their finances on their own, there’s a way to get education loans without needing someone else to guarantee them or share responsibility. An education loan without collateral and a co-applicant is great because it means students can take care of paying back the loan by themselves. It’s especially helpful for those who don’t have someone to co-sign with them and gives them a feeling of independence and confidence as they go through their education.

Understanding Education Loan Intеrеst Ratеs

Interest rates are really important when you’re thinking about getting a student loan. They decide how much you’ll end up paying back in the long run. Before you sign any papers, it is crucial to know what the initials are all about and if they stay the same or can change. It’s also a good idea to compare rates from different lenders so you can choose the best one that won’t make it hard for you to pay it all back.

Getting a Student Loan

Getting a student loan might seem tricky, but if you take it step by step, it is not so bad. First, you need to see if you qualify and submit some paperwork. Then you can check out different loans and decide which one is best for you. Finally, make sure you understand all the rules before you sign anything. Doing these steps will help you pay for college without spending too much.

International Education Loans

International education loans help students study abroad by covering costs like tuition, housing, and travel. This makes it easier for students to access top-notch education worldwide. With these loans, students can learn in different countries and experience new cultures while doing well academically.

Secured Education Loans

Secured international education loans are another way to get a lot of money for school. Instead of just promising to pay it back, you put something valuable down as a guarantee. This might mean you can borrow more money and maybe even pay a lower education loan interest rate. These loans are helpful for students who need a lot of money to pay for school. 

Conclusion

Getting the money to study abroad is important for students to make their academic dreams come true. Things like getting loans without needing to give something valuable as a guarantee, thinking about how much interest they’ll have to pay back, and understanding how student loans work are all very important. But by using the available help and making smart choices, students can feel more sure about how to pay for their studies and start on their big adventures in learning in other countries. 

Also Read,

A Guide to Affordability and Financial Aid for International Students

Financial literacy- Living on a budget while studying abroad