Education Loan in Australia for Studying

Studying abroad in top Australian universities is on most students' bucket list. However, the budget is the deciding factor. If you need financial assistance, you can take an education loan to study in Australia to finance your studies abroad. In this article, we will discuss in detail things to remember while applying for a loan to study in Australia, repayment, and more.

If you have secured admission to your dream college in Australia, you can now fulfil it. After securing admission to a university or college abroad, your next concern will probably be determining the source of funds for your educational and personal expenses. Even though the cost of studying in Australia is not as high as that of the United Kingdom or in the United States, studying in Australia is still an expensive option as compared to studying in India. However, you can use the Educational Loan Scheme for higher education in Australia. Before applying for educational loans, there are certain points that you need to know.

In India, almost all the major banks offer loans to deserving students who wish to pursue higher studies in Australia. The loans are offered to those Indian students (residents) who have secured admission to any of the bank's approved courses or universities. Banks have simplified the application process so that every student can take advantage of and apply for Foreign Education. The main endeavour of these banks is to grant privilege to a meritorious student who wishes to pursue higher education outside the country.

Read: Things to know before applying for foreign education loan

Education Loan for 

When you apply for a loan, you will be treated as the borrower and your parents or guardians as co-borrower. The loan is permitted based on the borrower's papers. The loan amount or the terms of loans differ from bank to bank. Currently, Indian banks lend up to a maximum of Rs 20 lakhs for studying abroad. It generally covers:

• Tuition fees payable to college/school
• Examination /Library /hostel charges
• Travel expenses
• Purchase of books /equipment /uniform
• Cost of two-wheelers (optional)

Repayment of loan

You can repay your loan in the form of EMIs, starting one year after the course or six months after the graduate has gotten a job, whichever is earlier. The term can be from 3-8 years. Most banks do not require any margin up to Rs 7 lakh, and beyond that, 15 per cent margins are charged.

Security

Generally, banks do not require collateral security for loans up to Rs. 7.5 lakhs. However, for loans ranging from Rs. 4 lakhs to Rs. 7.50 lakhs, most banks require collateral in the form of a satisfactory third-party guarantee.
For loans above Rs. 7.50 lakhs, collateral security of appropriate value or co-obligation of parents/guardian/third party guarantee along with the assignment of future income of the student for the payment of instalments may be obtained.

Banks accept security in the form of:

• Government Securities/ public sector bonds
• Land/building
• Units of UTI, NSC, KVP, LIC policy, gold, shares/debentures,
• The bank deposit is in the name of the student, parent/guardian, or any other third party with a suitable margin.

Some of the Indian Banks that offer abroad study loans are:

Note: Most banks provide facilities for online applications.

Check: Public v/s Private Education Loan Providers

Some of the important things that banks scrutinize before granting loan:

• The repayment capacity of the student's parents/family/Sponsor.
• The value of Collateral Security. Bank usually gets the valuation of the collateral done from an approved Valuator and then processes the loan application.
• Margin money: Usually, in the case of Overseas education loans, the student's family contributes some margin money, usually 25%. For example, if a student is applying for a Rs. 20 Lakh loan and the margin money is 25%, then Rs.5 lakhs has to be contributed by the Student's Family.

Read related articles about Loans to study abroad:

• Apply for Loans Through Shiksha
• Steps to filling an Education Loan Form
• Things to know before applying for foreign education loan