Benefits of Taking a Study Abroad Loan from NBFCs

Overseas education is on the rise, with Top Universities Worldwide offering research, learning, and employability prospects across diverse fields. However, the cost of education abroad also rises each year, placing a financial strain on students and their families. This rise prompts people to look for overseas education loans from reputable sources. Although Nationalized Banks and Private Banks are still popular, many other lenders have also cropped up on the Indian financial market for aspiring international students.

Non-Banking Financial Companies (NBFCs) are a relatively new entry to the Indian market, but they have RBI’s approval and public’s confidence already. They provide attractive loan programs with quick approval and easy disbursement processes, bolstering the dreams of thousands of international students. In this article, let us take a closer look at some NBFC education loan options to study abroad and explore the process in detail.

What is an NBFC?

NBFCs are a completely different entity, usually seen as an alternative option to Banks. The major difference shows in how they operate.

• While Nationalized and Private Banks utilize customer deposits to lend money for loans, NBFCs utilize funds from investors and other lenders.

• Essentially, NBFCs operate under lighter and more flexible regulations, which also helps borrowers.

• NBFCs can operate like banks, but do not require a banking license. While this limits their ability to join boards or take demand drafts, it opens them up to more flexible lending policies.

• Since NBFCs are still obligated to follow certain rules set by the RBI, they are considered trustworthy and reliable.

Read on to get an idea of the reasons behind choosing an NBFC education loan as an international student.

Why take NBFC Education Loans to Study Abroad?

NBFCs often design their overseas education loan schemes with the needs, requirements, and profiles of the modern-day student.

• They take into account the financial requirements of popular Foreign Universities, offering high loan amounts at competitive interest rates and flexible repayment tenures.

• They are a breath of fresh air for students who need more flexible terms for their overseas education.

• NBFC education loans to study abroad cater largely to middle-class students who are looking for overseas education loan without collateral, or for loans that cater to varied academic and financial profiles.

Most students can get high-paying jobs after graduation and repay the initial investment of the NBFC education loan to study abroad. In the next section, we will include a list of the top NBFCs in India for students looking to go abroad.

Top NBFCs in India for Education Loans to Study Abroad

India has many major NBFCs that offer excellent overseas education loan schemes, with customizable loan amounts, flexible eligibility criteria, and easy application procedures. Some popular NBFCs to consider are mentioned below.

• Avanse

• Credila

• Auxilo

• Tata Capital

• Incred

• Poonawala Fincorp

• Edgro Finance

These lenders can offer both secured and unsecured education loans with various interest rates and exclusive benefits. Let us get a better idea of the loan schemes offered by each NBFC in the next section.

Features of NBFC Education Loans to Study Abroad

When shortlisting the ideal NBFC education loan to study abroad, students need to consider the features of the loan and how it caters to their needs and profile. The table below can help students compare different loans and decide the most appropriate lender accordingly.

Having understood the basic features of different NBFC loan schemes, students can consider which lender to approach according to their needs and profile. Apart from the loan amount, students also get many benefits when they go for an NBFC education loan to study abroad, which we will see in the upcoming section.

Benefits of NBFC Education Loans to Study Abroad

NBFCs offer financial solutions and schemes designed specifically for international students in the 21st century, helping cover the tuition fees, living expenses, study material, visa and travel fees, etc. Some benefits of borrowing an NBFC education loan to study abroad are mentioned below.

• NBFCs have very user-friendly loan procurement terms, making the loan application, approval, and disbursal procedures smoother.

• Students can get 100% financing of their educational expenses from most of the top NBFCs in India.

• The documentation process is generally quick and painless. Some NBFCs even offer online documentation services for more efficient and accessible filing.

• Most NBFCs require minimal processing fees for the loan, usually around 1% to 2% of the sanctioned loan amount.

• The moratorium period for the majority of NBFCs extends for a year, which gives students plenty of leeway to find employment after graduation.

• Early repayments are allowed and sometimes encouraged, meaning that students can become debt-free as early as 7 years into the repayment tenure.

• NBFCs provide a range of personalized services, including pre-admission loan approvals, pre-visa disbursements, fast-track loans, GRE score-based loans, and doorstep services.

As we can see, NBFC education loans to study abroad have many significant advantages that help students with their financial plans from start to end. Before settling on a particular lender for their overseas education loan, students need to take certain factors into account. Let us learn about them next.

Factors to Consider while taking NBFC Education Loans to Study Abroad

When looking for the perfect student loans for studying abroad, students need to take certain factors into account before finalizing their decision. A few of those factors are mentioned below.

• The loan amount, as the total amount available depends on the student’s chosen country, University, course, and academic profile. It is important to ensure that the chosen NBFC education loan to study abroad covers all the academic and living costs.

• The interest rate, which may depend on the type of loan, the loan amount, and the University and course chosen. The interest rate affects the amount students need to repay, so it is prudent to try and negotiate for a low interest rate.

• The terms of repayment, including options such as step-up EMIs or one-time repayments. This will help students plan their financial budget and set aside the amount needed for the loan.

• The collateral requirements for secured education loans, as NBFCs usually accept assets such as property or FDs. The value of the collateral can determine the loan amount one is liable for.

• The processing time and processing fees for the loan amount. It is important to apply for an NBFC education loan to study abroad with a realistic timeline and sanctioned loan amount in mind.

• The lender’s prepayment and foreclosure policies, especially any penalties imposed on early repayment of the loan amount. These policies are generally specified in the loan agreement, so students must read them closely before agreeing to them.

Apart from all these factors, one should also ensure that they meet all the eligibility requirements of their chosen NBFC to avoid their loan application being rejected. Keep reading to learn further about the eligibility requirements for NBFC education loans to study abroad. 

Eligibility Criteria for NBFC Education Loans to Study Abroad

NBFCs offer accessible overseas education loans for students with diverse academic goals and financial backgrounds. This flexible and inclusive approach is reflected in the eligibility criteria for NBFC education loans to study abroad. Let us take a look below.

• Students must be above 18 years of age with a confirmed admission to a recognized University in a study destination catered by the NBFC.

• They need to show strong academic records or good scores in entrance tests like the GRE or the IELTS.

• The co-applicant for the loan should be a relative or guardian of the student.

• The co-applicant should have a stable source of income and a good credit score.

• For secured loans, students must present acceptable collateral, like property or fixed deposits.

Depending on the chosen NBFC, there might be other eligibility requirements to consider before sending in the loan application. Once the student has cross-checked the eligibility criteria, they can start gathering the documents required to submit alongside the loan application, which are also mentioned in the next section.

Documents Required for NBFC Education Loans to Study Abroad

Most NBFCs require students to apply for an overseas education loan alongside a co-applicant, so the documents must also include the details of both the applicant and the co-applicant. A brief list is mentioned below for the convenience of students.

Documents Required from the Student/Applicant

• Identity Proof, address proof, and recent passport-sized photographs.

• Past academic records, qualifications, and entrance exam results.

• A conditional or confirmed admission letter from a recognized University abroad.

• A statement of the total costs and expenses, preferably from the University.

• Bank statement for the last 3-6 months.

Documents Required from the Family Member/Guardian/Co-Applicant

• Identity proof, address proof, and recent passport-sized photographs.

• Bank statement for the past 6 months.

• ITR and Form 16 for the past two years.

• Collateral documents for secured education loans.

These documents must be submitted alongside a completed loan application form for an NBFC education loan to study abroad. Additional documents might be required during the disbursement process as per the lender’s policies. Now that we have an idea of the information needed to choose an NBFC, it is time to understand how students can seek help for a smoother process ahead.

NBFC Education Loans to Study Abroad through Élan Loans

When considering NBFC education loans to study abroad, it is natural to be confused or be unsure about how to proceed with the shortlisting, application, or repayment process. Fortunately, Élan Overseas Education Loans offers a seamless and easy way to find the best loan that meets the students’ requirements and profile. 

Élan’s expert overseas education loan consultants can help students compare different NBFC loan schemes, negotiate with different lenders for the lowest interest rate, and ensure a smooth disbursement process. Having our services at hand can help students plan and manage their finances without stress, no matter where in the world they want to study. 

To sum up, this article has discussed the major information around getting an NBFC education loan to study abroad. To learn about the application process or disbursement terms, reach out to our loan experts and start the study abroad  journey without any financial hassles!

NBFC Education Loans to Study Abroad FAQs

Q1. Is it safe to take an NBFC education loan to study abroad?

Ans. Yes, it is safe to borrow from an NBFC. NBFCs are registered lenders, monitored by the RBI. They are acknowledged by the Indian government and many other foreign governments as well.

Q2. Is the interest rate for NBFC education loans to study abroad fixed or floating?

Ans. Most NBFCs offer floating interest rates, which can change based on market fluctuations. Students may get concessions on the interest rate based on their profile.

Q3. Are NBFC education loans to study abroad accepted by visa authorities?

Ans. Each country has different policies for the proof of funds required for a student visa, although many countries accept NBFC education loans to study abroad. Students need to check the immigration guidelines of their chosen country to confirm.

Q4. Can I apply for an NBFC education loan to study abroad if I have a low credit score?

Ans. Yes, it is possible to apply for an NBFC education loan to study abroad with a low credit score. Lenders look at other factors such as academic profiles, course, University ranking, future earning potential, and the co-applicant’s financial standing before approving the loan.

Q5. Can I transfer my overseas education loan from NBFC to a bank?

Ans. Yes, overseas education loans can be transferred from an NBFC to a bank. However, the exact process may depend on the loan type, the repayment made, and the reason for transfer.