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The Indian government has implemented various schemes and interest subsidy programs to provide financial support to students pursuing education abroad. These initiatives are designed to help students from economically disadvantaged backgrounds and marginalized communities in their educational pursuits. It’s important to note that while commonly referred to as government education loans for studying abroad, these programs do not operate as direct loans; instead, they function as schemes offering financial assistance and interest subsidies. Engaging with these programs allows students to benefit from reduced interest rates, flexible repayment plans, and additional forms of support.
There are essentially four types of lenders authorized by the Indian government to provide education loans for studying abroad:
1. Public Banks:
- Offer abroad education loans with collateral requirements.
- Loan amounts range from INR 7.5 Lakh to INR 1.5 Cr.
- Provide tax benefits (Section 80E) and competitive interest rates.
- Notable lenders include State Bank of India and Union Bank of India.
2. Private Banks:
- Provide education loans for overseas studies with varying interest rates (starting at 11% per annum).
- Loan amounts depend on factors such as the chosen country, course, applicant’s profile, and co-signer’s financial status.
- Qualify for tax benefits under Section 80E and offer quicker processing times compared to government banks.
- Key players include ICICI Bank, Axis Bank, and IDFC FIRST Bank.
3. NBFCs (Non-Banking Financial Companies)
- Offer both secured and unsecured education loans for studying abroad.
- Loan terms are influenced by factors like the country, course, and applicant’s profile.
- Interest rates range from 11.50% to 13.75% per annum, slightly higher than private and government banks.
- Unlike private bank loans, NBFC loans lack tax benefits under Section 80E.
- Notable NBFCs include HDFC Credila, Avanse, InCred, and Auxilo, offering quicker processing times compared to government and private banks.
Explore this comprehensive compilation of government education loan schemes for studying abroad, offering detailed information on each initiative. The aim is to facilitate financial support for students pursuing international education. Delve into the various options provided to make informed decisions and access the necessary resources for your educational journey. To know about all the below-mentioned schemes click here.
Credit Guarantee Fund Scheme for Education Loans (CGFSEL):
Introduced in 2015, this initiative supports students aspiring to pursue overseas studies without requiring collateral or a co-applicant. Eligible students can secure loans up to INR 7.5 Lakh if they belong to the economically weaker section, maintain an annual family income below INR 4.5 Lakh, and gain admission to an approved technical or professional course.
National Minorities Development & Finance Corporation (NMDFC):
NMDFC extends loans for professional and career-oriented courses to minorities. Categorized under two credit lines based on family income, credit line 1 offers education loans for domestic studies up to INR 20 Lakh and for international studies up to INR 30 Lakh at a 3% interest rate. Credit line 2, for those with incomes up to INR 6 Lakh, features varying interest rates (8% for men and 5% for women).
National Safai Karamcharis Finance & Development Corporation (NSKFDC):
Devoted to the economic development of the safai karamcharis/Manual Scavengers community, NSKFDC provides education loans with a maximum limit of INR 10 Lakh for domestic studies and up to INR 20 Lakh for international studies. The interest rate is 4% per annum, with a 0.5% rebate for women in India.
National Backward Classes Finance & Development Corporation (NBCFDC):
NBCFDC extends education loans for both domestic and international studies. Eligible students, belonging to backward classes with a family income not exceeding INR 3 Lakh per annum, can avail of loans up to INR 15 Lakh for domestic studies and up to INR 20 Lakh for international studies. Interest rates are 4% p.a. for men and 3.5% p.a. for women.
National Scheduled Castes Finance & Development Corporation (NSCFDS):
To support scheduled castes, NSCFDC provides education loans up to INR 20 Lakh for domestic studies and up to INR 30 Lakh for international studies. The interest rate is 4%, with a 0.5% rebate for women beneficiaries.
National Handicapped Finance & Development Corporation (NHFDC):
Established by the Ministry of Social Justice and Empowerment, NHFDC offers education loans for professional undergraduate and postgraduate courses to students with disabilities. Collateral is required for loans exceeding INR 7.5 Lakh, with loan amounts set at INR 10 Lakh for domestic studies and INR 20 Lakh for international studies. The interest rate is 4%, with a 0.5% rebate for women beneficiaries.
In summary, the Indian government offers a comprehensive range of education loan options for international studies, including public and private banks and NBFCs. Specific schemes and initiatives target various demographic groups, providing tailored financial assistance and interest subsidies. These efforts underscore the commitment to inclusive education and access to higher international studies for students from economically underprivileged backgrounds.