Hacks to secure a lower ROI for your Abroad Education Loan

Table of Contents

1. Compare the Abroad Education Loan Products to Choose Better
2. Have Collateral of a High Value
3. Find a Cosigner with a Good CIBIL Score and High Earnings
4. Pick a Convenient EMI Plan
5. Opt for Loan Refinancing  
6. Start EMI Payment Early
7. Utilize Government Schemes for Interest Rebate
8. Leverage Tax Deductions
9. Reduce the Repayment Tenure
10. Frequently Asked Questions

Education loans help deserving students study abroad without financial tension. As the number of aspiring students increases, more education loan options are available in the market. A major concern of those who need a foreign study loan is the interest rates. From choosing the lender to planning the repayment, there are some smart hacks every student must know to get low-interest offers. 

Compare the Abroad Education Loan Products to Choose Better

Diverse products are available in the study abroad education loan marketplace. These are offered by public and private banks, NBFCs, and international lenders. Comparing these loan options filters the most suitable loan product for your needs. Select your option after comparing the rates of interest and repayment conditions to lower your total interest repayment. 

Have Collateral of a High Value

Education loans with collateral have moderate interest rates in general. The collateral value is indirectly proportional to the rates of interest. Students can expect an amount equal to 70% – 80% of the collateral value in abroad education loans. 

Find a Cosigner with a Good CIBIL Score and High Earnings

For abroad education loans without collateral, a cosigner is required in most cases. The cosigner’s CIBIL scores and earnings can influence the interest rates. A high CIBIL score and income add to creditworthiness and help secure the maximum amount at lower interest rates. 

Pick a Convenient EMI Plan

An affordable repayment plan is important in calculating the total interest amount. Choosing a convenient EMI plan helps you plan the repayment and decrease the chances of loan default. Check the total interest for different EMI plans and opt for the affordable option.  

Opt for Loan Refinancing

Loan refinancing refers to the process of securing a loan to pay off another. Since abroad education loans usually are of higher amounts, refinancing can lower the interest rates.   

Start EMI Payment Early

Many countries abroad allow students to work part-time during their studies. Take advantage of the opportunity and start paying your education loan interest early. Starting your repayment early can lower your interest rates. 

Utilize Government Schemes for Interest Rebate

The Indian government offers subsidies for education loans to study abroad under certain schemes, such as Dr Ambedkar Central Subsidy Scheme. Explore the schemes available and take advantage of them when you apply for an education loan abroad. 

Leverage Tax Deductions

According to Section 80 E of the Income Tax Act, education loans to study abroad can benefit from tax deductions. However, the rebate is applicable to banks and limited NBFCs in India. 

Reduce the Repayment Tenure

Education loans to study abroad offer flexible repayment tenure options from 5 – 20 years. The longer the repayment goes, the higher the interest rates get. Choosing a moderate repayment period can reduce your interest rates.

Thus, a smart approach can save you money on education loan interest to be paid off abroad. Even a small reduction in the interest rates will save you a big amount, as the repayment goes for 5 – 20 years. Here’s the perfect way to choose your education loan option – connect with Nomad Credit today. Our experienced counselor will evaluate your profile and offer customized guidance at zero cost. Contact us today!

Frequently Asked Questions

How can you negotiate with the lender for a low-interest abroad education loan?

If you have sufficient proof of creditworthiness, such as a high-earning cosigner or high-value collateral, it is possible to negotiate with your lender. 

Can you reduce the interest rate of a foreign study loan by planning repayment options?

Yes. Starting your repayment early can reduce your overall interest rate. A planned repayment will reduce your education loan interest rate. 

Do lenders give lower interest options for study abroad loans? 

Interest rates for education loans abroad are determined by various factors, such as collateral value, cosigner income, and CIBIL scores. If the determinants are congenial, lenders offer a low interest rate for abroad study loans. 

Are education loans available without collateral and low interest rates? 

Education loan options are available without collateral to study abroad. The cosigner’s income and CIBIL scores influence the interest rates for no-collateral loans. 

Can I get low interest for no collateral loans?

Yes. For no collateral options, your cosigner’s CIBIL scores and monthly earnings influence determining the interest rate.