5 things to know about a study loan abroad.

‘Study Loan Abroad’ is a search query that’s becoming more and more popular these days. The reason for it is quite simple – the next to unattainable cost of a foreign education. It’s hard to imagine, but even the well to do find it difficult to arrange the funds to cover the cost of an education across borders. In such situations, an overseas education loan can help bridge your financial gaps and help deserving aspirants achieve their dreams without being hassled by the enormous price tags of a foreign education.

However, there are a few things you need to keep in mind before you commit to such a loan. This article will highlight a few of these important factors to ensure you enjoy a smooth borrowing experience.

1. The best loan is subjective to your needs.

It’s only human to get the perspective of others before going in for a loan. While speaking to you family & friends, you might come across a number of individuals who proclaim a certain loan as the best in the market. However, before you believe such claims, you must know that education loans are subjective. What a friend or family member considers as the best study loan abroad might necessarily be the best fit for your needs. The best loan is actually the one that meets you needs perfectly.

2. Comparing lenders is important.

Some borrowers opt for the first lender that comes to their mind or stay loyal to a certain lender due to certain preferences. However, being rigid when it comes to lenders could hurt you later on. One should look at all the lenders in the market, or at least the better ones. You should compare the loan offerings, the reviews, the interest rates, charges, etc. before choosing a particular lender.

3. Some lenders require collateral.

Some lenders, especially banks, will require you to submit some sort of collateral in order to provide you with the loan. This is the case if your loan amount exceeds 7 lakhs. However, there are a number of non-banking financial institutes that will provide you with loans up to Rs. 40 lakh without collaterals, as long as your financial backing & academic records are strong.

4. Moratorium period can cost you!

One of the biggest advantages of a study loan abroad is the moratorium period it comes with. This allows you forget repaying the loan until 6 months after you’ve finished your studies or found a job. However, you must know that you will be charges simple interest during this period and this interest keeps adding to your principal amount. You can avoid this by choosing to service only the interest component of your loan.

5. Planning beforehand is key.
   
   Preparing beforehand is essential. You can use education loan calculators to get a better idea of your eligibility and apply accordingly. Next, you could use an EMI calculator to plan for your repayment phase. Finally, you could use the repayment calculator to figure out ways to reduce the total interest payable and cut short the tenure of your loan through prepayments.
   
   These were 5 of the more important things to keep in mind when applying for a study loan abroad. We hope these pointers help you make confident and correct borrowing decisions. Good luck and all the best!