Studying abroad offers numerous opportunities for numerous students to experience and gain access to world-class education, new cultures, and ethnicities. But all these come with high expenses and managing them has become a hurdle for many students.
Opting for an overseas education loan can be a windfall that will cover your expenses such as tuition fees, accommodation, travel, and other miscellaneous costs. Thus, it enables you to lighten the burden from your shoulders and keeps your savings intact.
Before opting for any overseas education loan, it is important for you to understand the concept of rate of interest. Thus, this article will help you explore the education loan interest rate for abroad study offered by different lenders. So, stay tuned for more insights.
Types of Interest Rate
Rate of Interest is the cost of borrowing money, usually expressed in percentage. The money charged on the principal loan amount by the financial lender is known as the interest rate. For better understanding, we have explained the two types of interest rates below.
Fixed Interest Rate – This type of interest rate remains consistent throughout the entire loan term, ensuring that borrowers have a predictable monthly payment amount. It’s an ideal choice for those who want financial stability and prefer to plan their budgets with certainty.
Floating Interest Rate: Unlike a fixed interest rate, a floating interest rate fluctuates in response to market conditions and changes in reference rates like MCLR or Repo Rate. Borrowers who opt for this option should be comfortable with potential variations in their monthly instalments and believe that interest rates will decrease in the future.
After glancing at the types of interest rates it is important to glance at the factors that can affect overseas education interest rates.
Also Read more about how x*x*x is equal to 2 and enhance your knowledge.
Key Factors of Interest Rates Affecting Overseas Education
Low-interest rates on educational foreigner loan Singapore can offers several benefits to the applicants. They make the cost of borrowing more affordable, resulting in lower monthly repayment making it easier to manage educational expenses.
On the other hand, high interest rates can significantly increase the cost of borrowing, resulting in higher monthly payments and more substantial interest payments over time.
There are some key factors that affect the interest rate of foreign education loan such as credit score, co-applicant’s credit profile, collateral, loan amount and tenure, and course of study.
After having a brief knowledge about the factors now lets us have a quick view of the interest rates of different financial institutions.
Popular Financial Lenders with Their Interest Rates
Below are the interest rates of the top financial lenders for abroad education loan
Nationalised Banks
These are the government-owned banks which are also known as public-sector banks. Here are some of the popular government banks and their interest rates.
| Banks | Secured Loan Interest rate | Unsecured Loan Interest Rate | Max. Loan Amount | Concession |
| State Bank of India | 10.15% | 11.15% | Secured: 1.5 Cr
Unsecured: 7.5 L |
1. 0.50% for female students or
0.50% for students availing of SBI Rinn Raksha |
| Bank of Baroda | For list of Premier Institutions: 9.70%
For non-premier institutions: 10.20% |
11.15% | Secured: 1.5 Cr
Unsecured: 7.5 L
|
For Non- Premier institutes concession of 0.20% available to girl child |
There are other popular banks as well such as BIO, UBI, and BOM where you can apply for overseas education loans and to know the latest interest rates and schemes you can visit their official websites.
Private Banks
Just like Government Banks, Private Banks also offer study broad loans for overseas education, so let us know about the interest rate of some popular ones.
| Banks | Secured Loan Interest rate | Unsecured Loan Interest Rate | Max. Loan Amount |
| Axis Bank | 13.70% | 14.70% | Secured: 1.5 Cr
Unsecured: 7.5 L |
| ICICI Bank | 9.85% onwards | 11% onwards | Secured: Up to 2 Cr
Unsecured: Up to Rs 1 Crore
|
There are other lenders as well such as NBFCs – HDFC Credila, Incred, Avanse, Auxilo, Credenc and international lenders – MPower Finance, Prodigy Finance, Leap Finance. The rate of interest offered by these lenders for a secured loan ranges between 10% – 12% and for unsecured loans it is between 11% – 13%. However, international lenders only offer unsecured loans which depends on the country and course mentioned in their list.
Wrapping Up
Understanding different aspects of education loan interest rates is essential whether you are applying for a bachelors, or masters, or taking an education loan for MBA abroad. Thus, to get all the recent updates you can reach out to the top overseas loan advisor.