Studying abroad is not just a dream for students. It is also a mission for parents. If you are looking forward to sending your child to study abroad at a prestigious international university, funding can be the biggest concern. Unless you have a massive saving, you may realise that the courses and living costs are beyond your reach. But it isn’t a valid reason for your child to give up on their dreams despite an excellent academic performance, impressive scores in admission tests, and solid chances of making it through to the university and programme of their choice.

Fortunately, you can procure funds for your child’s education through education loans for international students. Several banks, financial institutions, and NBFCs offer viable options for parents with diverse requirements and financial statuses. The best part is that you can easily avail these options with the right knowledge and proper guidance. Here is a comprehensive guide you can rely on.

ENSURE THAT THE STUDENT PICKS THE RIGHT COURSE

While you may not understand the relevance of picking the right course, it is integral to the process. A programme that equips your child with better job prospects in the future makes them an ideal choice for lenders. Remember that an additional degree does not make them a better lending prospect. It makes sense to pick a programme that has lucrative earning potential and ample job opportunities. Science, technology, engineering and maths (STEM) programmes are the best picks from this perspective, though you can find many more options if you explore.

DETERMINE THE RIGHT LOAN AMOUNT

Once your child embarks on their study abroad journey, they will find that financial requirements extend beyond the tuition fees. Add up travel expenses, hostel fees, administrative expenses, cost of living, and more to determine the amount you will need. You may want to avail the maximum possible loan amount, but it isn’t the wisest move. Stick to only as much as the student can manage with because you can save up on interest. Further, you must bear in mind the future salary expectations because you will have to repay the loan as a co-applicant if the child cannot manage it.

UNDERSTAND AND COMPARE OPTIONS

As a parent, you must shop your education loan smartly. It is easy to grab the first offer that comes your way or even opt for one that seems fastest and easiest. But understanding options and comparing them always enables you to avail better and cost-effective aid. Indian students have myriad choices when it comes to international education loans. You can consider leading providers like HDFC Credila and Financepeer or approach a public sector bank or NBFC for funding. Check factors such as moratorium duration, interest rates, and collateral requirements to compare and pick the best option.

Moratorium refers to the holiday period that includes study duration and typically one year after completion of the course or six months after the student starts working. You will not have to pay back the principal or interest during this period. However, a simple interest rate starts accruing on the loan during this period, so you must consider paying it regularly to prevent the loan burden from accumulating.

EXPLORE COLLATERAL-FREE ALTERNATIVES

Not everyone has assets to provide to lenders in exchange for secured loans. Fortunately, you can access collateral-free alternatives in loans for international students. But it is subject to some conditions. Indian banks will require collateral if the loan value exceeds Rs 7.5 lakh. You may provide land, building, gold, shares and debentures, public sector bonds, government securities, or bank deposits as security for the loan. However, some banks may provide a higher loan value without collateral for students from elite colleges such as IIT, IIM, and ISB.

APPLY FOR THE LOAN

Once you have a fair understanding of education loans, it will be easy to pick the right option. You can go ahead with the loan application process by filling the requisite forms and submitting the documents. Here are the documents you will need.

• Offer letter from the foreign university as the proof of admission
• Documents of qualifying exams such as GRE, IELTS, TOEFL
• Original education certificates and mark sheets
• Residential proof of the student and co-borrower
• PAN card of the student and co-borrower
• IT returns of co-borrower
• Proof of income of co-borrower
• Details of assets and liabilities of parents
• Passport copy
• The estimated cost of study
• Loan application form, duly filled

You may want to understand the process for top-up loans if the child wants to pursue a post-graduation course after completing their undergraduate studies. It is best to repay your first loan and then apply for a fresh one to stay safe from a piling liability. Now that you know all about education loans for international students, you can help your child fulfil their study abroad aspirations without any hassles and hindrances.