Introduction

As many companies are taking a chill wind of recession due to covid 19, pandemic has put students in dire straits. But now with time, students have also found different alternatives to come out of the bog. But what about the students who are still facing trouble to accommodate finances for their study abroad? How will they be able to meet country requirements? Will they be able to fund their dream?

Yes, this is all possible. Students often take an education loan to fund their studies. Education loans are an excellent source for a lot of abroad aspirants to fund their higher education. But before borrowing an abroad education loan, students must pay extreme attention to the country they have opted for and have a thorough understanding of the immigration policies of the country in which they plan on studying. Every country has their own ordinances to follow when it comes to international students. Therefore, this article aims to give a deep insight into these mandates and also impart information regarding the type of education loan that would be suitable for various countries in the world.

Let's first try and understand the requirements laid by different countries and the types of education loan recommended for that country. Let’s take a sneak peek at the different types of student loans that are available in India for abroad studies.

Types of education loan 

In India, education loans act as a pillar of support to many students as it is the most prominent source of higher funding. These loans are further divided into two different types of student loans: 

• Secured education loans: Secured loans are basically collateral-based loans. Students who are taking collateral-based loans are required to pledge collateral in order to avail an education loan. Here, the borrower pledges a collateral with the lender to avail the loan. In India, these loans are majorly provided by Government/Public banks like SBI, BOB, Canara, PNB etc.
  Collaterals are further divided into three parts. 
  

  a. Immovable property: This includes house, flat, non-agricultural lands and lands with defined boundaries.
  b. Liquid security: This includes fixed deposits, LIC, Government bonds etc.
  c. Third-party collateral: This provision is only applicable to Government/Public banks. In this case, if a candidate does not possess any required assets mentioned above or is unable to meet the value to cover the required loan amount, then they can pledge a third party’s asset as a collateral. This third-party essentially refers to individuals who are not part of the candidate’s immediate family. For e.g., uncle, aunt, friends of the candidate or the primary co-applicant, etc.

• Unsecured education loans: Unsecured education loans basically do not involve any collateral requirement which means students are not required to pledge any collateral in order to avail an education loan. Students are granted loans on the basis of a student’s academic profile and their co-applicant’s financial profile. Financial institutions providing unsecured loans are very particular about various criteria as they are lending loans keeping in mind the student’s earning potential in future. In India, unsecured education loans are provided by private banks and NBFCs. 

As you have acquired sufficient knowledge on different types of student loans, let’s move on to the requirement for education loan for various countries. But before that, let me remind you, if you approach banks directly, they might not accept third party collateral as a valid security to pledge. This may also lead to delay in the application process or rejection of the loan application. Therefore, to avoid such a situation, we always recommend students to first connect with our financial team at WeMakeScholars as they will be able to help you out. Our financial team is knowledgeable as we have handled huge volumes and have solutions to almost any problem that a student may incur during their education loan process. So, request a callback to speak with the financial officer at  WeMakeScholars today. 

Types of Education Loan for Various Countries in the World

Australia 

Students who are willing to study in Australia have to first submit proof of funds to their respective institutions before getting a confirmation letter. After receiving the admit, students need to deposit at least one semester’s tuition fees to the university account along with the health insurance charges and also one year’s living expenses into a savings account. 

Now for funds to study in Australia, an unsecured education loan is not an option for students as Australian embassies do not generally accept loans from NBFCs. This is because the embassy needs assurance that students who wish to study in Australia have sufficient funds and those are backed by a security in case of no repayment.

On the other hand, the Australian embassy majorly favors students who borrow secured education loans from Government banks like the SBI and other PSUs. This is because as compared to NBFCs, government banks have proven themselves to be financially reliable and trustworthy, time and again. But here again a point to remember, Australian embassy does not accept third-party collateral as it portrays that the student has no financial source of funding for them to study in Australia. Therefore remember, even if the students are processing through Government banks, the Australian embassy pays close attention to the nature of the collateral being pledged. 

Type of Education Loan Recommended to Study in Australia: Secured education loan
Maximum education loan amount provided: Upto  1.5 Cr 

New Zealand

Similar to Australia, students who are willing to study in New Zealand are required to deposit their one year’s living expenses into a savings account. This process is called an FTS (Funds Transfer Scheme). Students are required to deposit their living expenses for at least a year of their course duration with a bank based in New Zealand and pay their annual tuition fees before their visa process.

S.No	Requirements	Range
1.	Minimum requirement per year	NZ $15,000 per year
2.	Minimum requirement per month	NZ $1,250 per month

The tuition fees mentioned in your college admit is also catered for in the abroad education loan taken from government banks. Generally, unsecured education loans are majorly lent by NBFCs ( Non-Banking Finance Companies), which are private lending institutions and one of the major facts is that the New Zealand embassy generally disapproves of unsecured education loans as funding options for higher education in New Zealand for international students. 

As New Zealand does not accept loans from NBFCs, therefore students are only left with one option i.e. secured education loans. But here’s a point to remember, the New Zealand embassy does not encourage third-party collateral as a prime funding source. Hence, it is recommended that you avoid borrowing third- party education loan to study in New Zealand. Apart from this, they accept other collateral like immovable property and liquid securities like fixed deposits (not less than 6 months old) etc. 

Type of Education Loan Recommended to Study in New Zealand: Secured education loan
Maximum education loan amount provided: upto 1.5 cr

If you are still confused about the funding options for your higher studies abroad, you should get in touch with the WeMakeScholars team to get an unbiased opinion on which option suits your profile the best.

United Kingdom

Students who are planning on borrowing an education loan for study in the UK or any other country, we always recommend students to go for a secured education loan through nationalised banks instead of unsecured education loan through Private banks or NBFCs. If you have gone through our previous articles, we always stressed on the major benefits offered by Government banks when students take an education loan. Although students do have the option of approaching NBFCs for education loans, applying in a Government bank for education loans can be the only saving grace for you when it comes to having a hassle-free visa process to study in the UK.

For study in the UK, both types of education loan are suitable.

For unsecured education loans, the UK offers employment-friendly visa rules because of which students who complete their course, tend to work there itself. Hence many private banks and NBFCs have trust issues when it comes to lending an unsecured education loan for the UK to students in need. If you directly approach any of the top NBFCs for an education loan for the UK, you might be disappointed. Hold your horses before you start worrying, as this is not impossible. WemakeScholars team can make this possible, only if you apply through us. The finance team at WeMakeScholars has handled many such cases where a student was rejected by many private banks and NBFCs for an unsecured education loan for the UK. Infact, we have negotiated with top NBFCs to start a new product for the UK and students applying through us can be rest assured that they’ll be given the best options available.

Type of Education Loan Recommended to Study in UK: Secured education loans
Maximum education loan amount provided: Upto 1.5 Cr

USA

Students who are willing to pursue their higher education in the USA are required to show proof of funds in order to be eligible for one. The funds to be displayed are mentioned in the I-20 form which is provided to the students along with their admission letter from their respective universities only after they show proof of their funding source to the university. 

For study in the USA, students usually get both unsecured and secured education loans but it also depends on the eligibility criteria set by the lending bank. To know more on this, connect with our team at WeMakeScholars to know whether you meet all the requirements or not. They will also assist you with the entire education loan process. 

Type of Education Loan Recommended to Study in USA: Secured/Unsecured loans
Maximum education loan amount provided: Upto  1.5 Cr(with security) and upto 40 Lacs(without security)

Germany

Students who are willing to study in Germany are required to deposit their one year’s living expenses into an account before applying for a German student visa. This is called a Blocked account.

S.No	Requirements	Range
1.	Minimum requirement per year	€10,332 Euros per year
2.	Minimum requirement per month	€861 Euros per month

Even though the students do not have to pay over the odds to live in Germany, authorities still want to ensure that a student has sufficient financial resources to live and study in Germany. 

Now, let’s talk about the type of education loan suitable for study in Germany.

Generally, students can avail both unsecured and secured education loans for study in Germany but students have to strictly meet the eligibility criteria in order to be eligible for the same. To know whether you are eligible or not, connect with your financial officer to know the same. Usually, the amount needed for Germany is not that high so a lot of students prefer going for a loan without any security which is a good and viable option if you have no collateral at all. 

Type of loan recommended for study in Germany: Unsecured education loan
Maximum education loan amount provided: 20 Lacs(without security)

Canada

Students willing to study in Canada must meet the requirements laid down by the Canadian legislation. The Canada student visa requirements state that higher education aspirants from India need to deposit their one year’s living expenses into a GIC account and submit documents which indicate the purchase of the same as proof of funds to the embassy while applying for a Canada student visa.

S.No	Requirements	Range
1.	For living expenses which includes food, housing, clothing and medical insurance	CAD $12,000 per year
2.	Per year for tuition	CAD $10,000 to CAD $15,000
3.	Total expenses in their first year of study at university	Approx. CAD $22,000
4.	In addition to the above costs, students must also consider the price of transportation to Canada	from CAD $2,000 to CAD $5,000

For study in Canada, banks generally offer both i.e. unsecured education loans and secured education loans. 

Secured education loans are basically offered on the collateral being pledged. Government banks generally consider the value of the collateral being pledged and if the value meets the loan requirements stated by the university or not. Therefore, students can get an education loan to study in Canada through Government banks easily.

Private banks generally offer education loans on the basis of the university the student has opted for and on the financial profile of the co-applicant. Therefore, to avail an education loan from private banks, students must ensure that the university falls in the Prime list category and the co-applicant’s financial profile is strong enough. To know more, seek professional guidance from our team at WeMakeScholars. 

For NBFCs, they generally offer 25-30 lakhs loan for study in Canada with an interest rate of 12% to 13%. But for this also, the financial profile of the co-applicant should be strong and students must meet other eligibility criteria in order to avail an education loan for Canada. To know more on this, request a callback on the website, and our financial officer will connect with you soon. 

Type of Education Loan Recommended to Study in Canada: Secured/ Unsecured loan
Maximum education loan amount provided: Upto 1.5 Cr(with security) and 25-30 lacs(without security)

To know more, you can check out the 18th Episode of Loanflix web series. This is a must watch for students who have decided to study in Canada and learn about Canada GIC, payment of tuition fees, how to decide on the disbursement amount while applying for an education loan for Canada, etc. 

Ireland

For study in Ireland, students can take both unsecured and secured education loans. Secured education loan requires the loan applicant to pledge some kind of collateral security against their education loans. And for unsecured, students are not required to pledge collateral.

Although there are many NBFCs that provide an education loan for Ireland, unsecured education loans should not be the first priority of students. Even though the unsecured education loan process may seem easy and hassle free, it is very important to take note of the education loan policies of NBFCs before you decide to proceed with the entire process.

Government banks, on the other hand, may follow a daunting and lengthy education loan process but their repayment policies are student-friendly and flexible with the lowest interest rates available,  thus making it one of the best and safest ways to borrow an education loan. And if you’re worrying about the lengthy process, do not worry as WeMakeScholars got your back. We will help you with the entire education loan process in Government banks in just 15 to 20 days. 

Type of Education Loan Recommended to Study in Ireland: Secured/ Unsecured loan
Maximum secured education loan for Ireland: Upto 1.5 Cr(with security) and 15-20 lacs(without security)

Singapore

An education loan is one of the most prominent sources of funding your higher education in Singapore for Indian students. Now, let's understand the requirements of it.

In unsecured loans, lenders pay close attention  to factors such as global ranking of the universities in Singapore, the overall financial capability of their co-applicants to repay their education loan, etc to mitigate the risk as there is no involvement of collateral. In order to be eligible to get an unsecured education loan, students have to fulfil certain requirements like an excellent academic profile, student must have received a letter of confirmation from a well-ranked institution, and co-applicants need to meet all the requirements set by the respective NBFCs/Private banks. These are a few basic requirements for a Singapore student loan without collateral. Unless and until the above criteria are not met, it is not possible to get an education loan. As a lot of students struggle to fund their education with unsecured education loans to study in Singapore, most students opt for secured education loans through Government/Public banks. 

Type of Education Loan Recommended to Study in Singapore: Secured education loans
Maximum secured education loan for Singapore: Upto 1.5 Cr

United Arab Emirates (UAE)

Students who are seeking an education loan to study in the UAE, it is important to understand a few factors before proceeding ahead. 

For study in the UAE, the chances to get an unsecured education loan is very bleak. Therefore, in this case, Government banks are the only source who are offering secured overseas education loans to study in the UAE. However, students must not rely on this completely as government bank education loans come with its own set of terms and conditions.

Some of the conditions are: 

• The student’s academic profile has to reflect excellent performance throughout their academic career.
• Avoid backlogs in your academic profile as this will not be deemed eligible for an education loan to study in UAE
• The value of the collateral being pledged as security for a Master's education loan should be higher than their actual education loan requirements
• Individuals who possess a strong financial background only can be named as co-applicants for an education loan to study in UAE

For students who are willing to fund their higher study courses in the Middle East, there are special rules and regulations. For eg. SBI education loan, which is considered to be the best bank for education loan in India, requires students to take a country deviation to be able to fund their courses in such countries. Therefore, connect with our team at WeMakeScholars if you are looking for an education loan to study in the UAE. 

Type of Education Loan Recommended to Study in UAE: Secured education loans

Maximum secured education loan for UAE: Upto 1.5 Cr

Education loan to study in UAE totally depends on the students meeting the mentioned eligibility criteria by the respective bank. In this case, not many lenders can provide student loans to study in the UAE as there is no other guarantee whatsoever of the student being accepted into a particular university. Therefore, we recommend you to request a callback at WeMakeScholars. Our team will come to your rescue as we can make it possible only if you apply through us. As we share a professional affinity with the lenders, our financial team can push your application a little further and get it done.  

Note: WeMakeScholars is an organization funded and supported by the Government of India that focuses on International Education Finance. We are associated with 10+ public /Pvt Banks/ NBFCs in India and help you get the best abroad education loan matching your profile. As this initiative is under the Digital India campaign, it’s free of cost. The organization has vast experience dealing with students going to various abroad education destinations like the US, Canada, UK, Australia, Germany, Sweden, Italy, New Zealand, France among others.