Studying abroad comes with the opportunity to broaden one’s academic horizons, experience new cultures, and access top-notch career opportunities after graduation. This pushes thousands of Indians to apply for Master’s and Bachelor’s courses abroad. To ensure that they do not face any financial barrier, students may turn towards overseas education loans to cover the major expenses of studying and living abroad. This financial backing helps students focus on their academic and professional goals without any worries.
The responsibility of eventual repayment means that students must choose their loan carefully, taking their needs and profile into consideration. They can consider looking for the lowest interest rates on overseas education loans, as this affects their repayable loan amount. In this article, we will explore the best interest rates offered by various lenders.
Types of Overseas Education Loan Interest Rates
Overseas education loans close the gap between global aspirants and their dreams by covering the tuition fees, cost of living, travel expenses, and other necessities. One may decide on a secured or unsecured education loan with a fixed or floating interest rate. Read on to understand the difference.
Fixed Interest Rate: It remains constant throughout the loan tenure, providing a stable EMI amount for students.
Floating Interest Rate: It fluctuates throughout the loan tenure, according to the Marginal Cost of Funds-Based Lending Rate (MCLR) or repo rate.
Now that we know which types of interest rates students can choose from, it is time to move on to the best lenders for lower interest rates.
Top Lenders Offering Lowest Interest Rates on Overseas Education Loans
From a secured bank loan to an NBFC education loan without collateral, students have a wide variety of options for secured and unsecured loans alike. The best lenders offering the lowest interest rates on overseas education loans are mentioned below.
| Lenders | Maximum Loan Amount | Rate of Interest |
|---|---|---|
| Saraswat Bank | Secured loan: Up to INR 5 crores | Secured loan: Starts at 8% per annum, with a 0.50% concession for female students |
| State Bank of India | Secured loan: Up to INR 3 crores Unsecured loan: Up to INR 50 lakhs for Premier-Listed Universities | Secured loan: Starts at 8.65% per annum for Premier-Listed Universities Unsecured loan: Starts at 9.15% per annum for Premier-Listed Universities |
| Union Bank of India | Secured loan: Up to INR 1.5 crore Unsecured loan: Up to INR 40 lakhs for Prime-Listed Universities | Secured loan: Starts at 8.75% per annum for Prime-Listed Universities Unsecured loan: Starts at 9.25% per annum for Prime-Listed Universities |
| ICICI Bank | Secured loan: Up to INR 3 crores Unsecured loan: Up to INR 1 crore for Premium-Listed Universities | Secured loan: Starts at 9.50% per annum for Premium-Listed Universities Unsecured loan: Starts at 11.25% per annum for Premium-Listed Universities |
| IDFC Bank | Secured loan: Up to INR 2 crores Unsecured loan: Up to INR 1 crore for Prime-Listed Universities | Secured loan: Starts at 9.5% per annum Unsecured loan: Starts at 11% per annum |
| Poonawala Fincorp | Secured loan: Up to INR 3 crores Unsecured loan: Up to INR 1 crore | Secured loan: Starts at 10% per annum Unsecured loan: Starts at 10.75% per annum |
| Credila | Secured loan: As per the student’s requirements Unsecured loan: Up to INR 75 lakhs for certain universities | Secured loan: Starts at 10.25% per annum Unsecured loan: Starts at 11.50% per annum |
| Prodigy Finance | Unsecured loan: Up to $220,000 for Masters abroad | Unsecured loan: Starts at 10.55% per annum |
| MPower Finance | Unsecured loan: Up to $50,000 for the first year and another $50,000 for the next year | Unsecured loan: Starts at 11.99% per annum for Masters and Bachelors |
We can see that interest rates fluctuate across loan types and lenders, so students should determine the best bank for overseas education loans by considering other factors that impact the interest rate. Read on to get an idea of these factors.
Factors Affecting the Lowest Interest Rate on Overseas Education Loans
The lowest interest rate on overseas education loans isn’t just calculated as per the market rate, MCLR, and repo rate. It also takes the student’s profile into account, looking at various aspects. Let us get an idea of those aspects below.
The loan amount and repayment tenure.
The student’s past academic performance and standardized test scores.
The chosen country, University, and course.
A good credit score for students and their co-applicants (wherever necessary).
Providing collateral against the loan to reduce the expenses.
Additionally, if students or their co-applicants (wherever necessary) have already worked with the lender for financial products and services in the past, it helps them negotiate for the lowest interest rates on overseas education loans.
In summation, the lowest interest rates on overseas education loans are based on the student’s chosen loan type, lenders, and how they highlight their profile. They can get tips to negotiate for the best loan schemes from overseas education loan consultants and use their end-to-end services for a smooth loan application process ahead.