Education Loan for Studying in Australia: Everything You Need to Know
Enrolment rates are increasing by 4-5% each year across Australian Universities, and so is the demand for loan applications for study. Students traveling to Australia for higher education have to submit their tuition fee in full before leaving their country. Thus, to their rescue is a list of only a limited number of banks which are on Australia's acceptable list for offering educational loans to international students. Visa and admission offer letters are also dependent upon an applicant's funding of studies in Australia.
A major favorite study destination for international students, Australia holds the third most popular study destination spot for international students after the United States of America and the United Kingdom. A high quality of education, friendly natives, and cultural diversity are some of the factors that make Australia a personal favorite among International students wanting to study abroad. This is the reason why more and more students apply to Australian Universities, and the yearly average of receiving admission applications has crossed 800k per year. This in turn also suggests that students are applying for educational loans rapidly for both admission cycles in order to study in Australia.
Studying Costs in Australia for International Students
Australian Degree Level
English Language Study
AUD 390 / week
VET (Vocational Education)
AUD 5,200 – AUD 28,500
AUD 19,400 – AUD 42,700
AUD 26,000 – AUD 48,000
AUD 18,000 – AUD 48,000
Educational Loan Providers for Studying in Australia
Since, pursuing education in Australia is expensive for students especially from India, they have a sole option of applying for educational loans for higher study. Australia Universities on an average charges INR 20-35 Lakhs from an Indian student for one year study. Thus, for those who cannot pay this lump sum together have to apply for loans. The following options are available for obtaining an educational loan:
1. Indian Nationalised Banks
They usually offer 90% to 100% secured educational loans in terms of collateral to students. Another advantage of choosing a nationalised bank includes its lower interest rates, economical processing charges and no extra cost to be incurred on interest rates. The processing of applications may take a longer duration and maybe a follow up can be delayed in such cases. Lets discuss about Bank of Baroda and its requirements to offer loans to Indian students to study in Australia.
Bank of Baroda:
It has an added advantage of providing 100% loans to thse students who have been admitted to Go8 or Grou of 8 Australian Universities, namely:
Bank of Baroda Loan Eligibility Requirements:
The following requirements have to be fulfilled before applying for a loan at Bank of Baroda:
- Students profile with minimum set KT's or no KT's are eligible to apply.
- Whoever will be the co-signatory, he or she must have 650 or above CIBIL score.
- The co-signatory must also have sufficient disposable income to pay the interest of the loan.
- Also the property must be mortgageable, unhibited and should have proper paper work done.
2. Private Banks
The process of acquiring a loan is faster in comparison to the nationalised banks in India. It comes with better follow ups and a dedicated relationship manager. However, the private baks are comparatively more expensive in terms of processing fees, interest rates and are usually unsecured loans for education. Unsecured loans do not require the applicant or student in this case to mortgage or submit asset or collateral in exchange for the loan. For instance, Axis Bank and ICICI Bank are both private banks which offer unsecured loans to students who are admitted across Australian Universities for higher education.
Axis Bank: Offers unsecured education loans to those students who have applied to Curtin University, La Trobe University, James Cook University, RMIT University, etc.
ICICI Bank: Offers unsecured education loans for University of Melbourne, University of Adelaide, University of Queensland, etc.
3. NBFC or Non-Bank Financial Companies
The third option for students applying for educational loans to study in Australia is NBFC. This includes HDFC Bank Credila education loan, Auxilo, etc. which offer loan to students based on the final confirmation from the Australian High Commission. This just makes the process easier for disbursement of tuition fee, direct sanctions from the financial institution responsible for handling, and it reflects in the bank account as well. Thus, this option can be considered by students if they wish to apply for an educational loan to study in Australia.
Find more details at Top Education Loan Providers in India for Studying Abroad.
Process for Applying For Educational Loan
Once students have secured admission to the university of their choice, their next big hurdle would be to arrange the funds required for their educational expenses. The cost of studying in Australia is at par with other top destinations such as the US and UK, making it an expensive investment as compared to studying within India. Students and families looking to avail an Education Loan would be happy to know that in India numerous Banking and Non-Banking institutions offer Education Loan at a low rate of interest to commendable students to pursue their higher education in Australia.
Applying for an Education Loan has come a long way and today students and their parents looking to apply for an Education Loan can do so from the comfort of their home. Today applying for an Education loan is simple and every student should take advantage of the same and study abroad. However, before applying for an Education Loan, there are certain particulars that must be kept in mind. Read: Studying Abroad attracts tax collected at source (TCS) of 0.5 and 5%
Eligibility criteria to apply for an education loan to study in Australia
- The student is required to be a citizen of India
- The student must have obtained admission in a recognized university belonging to Australia
- The candidate must have enrolled for a course that has been recognized by the funding institution (job oriented professional degree, technical degree, and diploma courses)
Also Read: Eligibility Criteria for Education Loan
List of Documents Required For an Education Loan to Australia
Nationalized banks such as State Bank of India (SBI) provides Education Loan up to Rs. 30 Lakhs to deserving students who wish to go to Australia for higher studies. However, before the bank is able to process the loan amount, there is a list of documents that need to be furnished by the borrower (student). These include:
- Letter of admission from the University
- Loan application form filled out in full
- Documents on the cost of studies
- Identification proof
- Residence proof
- PAN details of the candidate
- Guarantor/ co-borrower/ student's bank statements
- Guarantor/ co-borrower/ student's statement of assets
- Guarantor/ co-borrower/ student's proof of income
Expenses covered under the loan include
The loan sanctioned by an institution would solely be for education purpose and not cover personal expenses. The loan amount sanctioned would take care of
- Tuition fees
- Accommodation expenditures
- Caution deposit money
- Travel expenses
- Study tours and project work during the academic year
- Purchase of books, laptop, and stationary
- Other reasonable expenses that would be required to successfully complete the course
Students who have applied for loan amount ranging from 4-7.5 lakhs get 10 years to repay the entire amount. And students who have been sanctioned amounts above 7.5 lakhs are given 20 years to repay the entire amount. However, students should understand the moratorium time varies for different loan providing institutions.