3 Ways to Fund Your Overseas Education
Funding is an important aspect to consider when making plans for overseas education. The 3 main types of costs that need to be taken into account by applicants are cost of study (tuition fee and other university charges), cost of living, and emergency funds.
There are different ways through which applicants can arrange funds to afford their expenses overseas. Various banks, government schemes, and even non-government organisations can help you fund overseas education, as we have discussed in this blog.
Types of Expenses in Overseas Education
Pursuing higher education abroad requires funding to cover the following expenses:
- Study Cost (college/university’s tuition fee, academic supplies, university administration charges, etc.)
- Living Expenses
- Accommodation Rent
- Transportation Cost
- Food & Groceries
- Daily utilities such as internet, electricity, and other bills
- Entertainment & Leisure
- Miscellaneous expenses (such as emergency funds, travel costs, visa fees, flight tickets, health insurance premiums, etc.)
Major Expenses while Pursuing Higher Education Abroad
Before exploring the pathways to arrange the funds for overseas education, applicants need to understand the actual expenses in different countries such as the USA, UK, Canada, France, Germany, and Australia.
| Countries | Cost of Study (Per Year) | Cost of Living (Per Year) | Total Miscellaneous Expenses |
|---|---|---|---|
| USA | INR 25 Lakh-92 Lakh | INR 33 Lakh-92 Lakh | INR 1.65 Lakh-2 Lakh |
| UK | INR 11 Lakh-32 Lakh | INR 16 Lakh-28 Lakh | INR 1.95 Lakh-2 Lakh |
| Canada | INR 6 Lakh-72 Lakh | INR 10 Lakh-24 Lakh | INR 1.48 Lakh-1.70 Lakh |
| France | INR 4 Lakh-27 Lakh | INR 8 Lakh-19 Lakh | INR 92,000-1 Lakh |
| Germany | INR 9 Lakh-54 Lakh | INR 8 Lakh-21 Lakh | INR 69,000-1 Lakh |
| Australia | INR 12 Lakh-27 Lakh | INR 7 Lakh-24 Lakh | INR 1.74 Lakh-2 Lakh |
3 Funding Options for Pursuing International Education
3 funding options for pursuing overseas education are discussed below.
Education Loan
- Education loans cover various costs, such as tuition fees, accommodation, travel, books, and expenses.Â
- This is the most common method to arrange funding for higher education abroad.Â
- In India, government and private banks, NBFCs, non-banking financial corporations, and some international lenders offer education loans at various interest rates.Â
- The amount of loan granted and interest rate depends on the type of loan and lender. There are two types of education loans.
Collateral Education Loan
A collateral education loan or secured education loan is the type of education loan that requires the applicant to lend the following types of collateral or security to a lender.
- Property (house, flat, land, or agricultural land)
- Deposits (fixed deposits, recurring deposits, or any other type of deposit)
- Securities (debentures, bonds, equity shares)
| Average Interest Rate | 8.00-11.75% |
|---|---|
| Popular Lenders | State Bank of India Punjab National Bank Canara Bank Bank of India Axis Bank Auxilo |
| Maximum Loan Amount | INR 10 Lakhs-1.5 Crore |
| Moratorium Period | 6 Months-1 Year |
| Requirement of Co-Applicant | No |
The interest rates and loan amounts granted by some of India’s popular banks and lenders are tabulated below.
| Bank | Interest Rate (per annum) | Maximum Loan Amount against Collateral |
|---|---|---|
| State Bank of India | 8.15%-11.75% | Upto 1.5 Crore INR |
| Punjab National Bank | 9.20% | Upto 1 Crore INR |
| Canara Bank | 9.25% | Upto 1 Crore INR |
| HDFC Bank | 9.50% | Upto 45 Lakhs INR |
| IDFC First Bank | 10.00% | Upto 80 Lakhs INR |
| Bank of India | 11.05%-11.85% | Upto 40 Lakhs INR |
| ICICI Bank | 9.85% | Upto 1 Crore INR |
| Bank of Baroda | 8.15% | Upto 1 Crore INR |
| Axis Bank | 13.70% | Upto 5 Crore INR |
| Auxilo | 10.00%-12.00% | Upto 80 Lakhs INR |
Non-Collateral Education Loan
- This non-collateral education loan is often called an unsecured education loan.Â
- It is a type of education loan granted to study abroad aspirants without requiring them to lend any property or security.
| Average Interest Rate | 11.75-15.00% |
|---|---|
| Popular Lenders | Avanse Credila Auxilo Incred State Bank of India Axis Bank |
| Maximum Loan Amount | Upto 1 Crore |
| Moratorium Period | 6 Months-1 Year |
| Requirement of Co-Applicant | Yes |
The interest rates and loan amounts granted by some of India’s popular banks and lenders are tabulated below.
| Banks | Interest rates (per annum) | Loan Amount (without collateral) |
|---|---|---|
| State Bank of India | 10.65% - 11.50% | Upto 20 Lakhs INR |
| Union Bank of India | 9.80% - 11.30% | Upto 40 Lakhs INR |
| Axis Bank | 11.00% - 11.50% | Upto 50 Lakhs INR |
| ICICI Bank | 10.85% - 12.50% | Upto 50 Lakhs INR |
| IDFC First Bank | 11.50% - 13.25% | Upto 50 Lakhs INR |
| HDFC Bank | 11.25% - 13.00% | Upto 65 Lakhs INR |
| Avanse | 12.50% - 13.50% | Upto 75 Lakhs INR |
| Auxilo | 11.25% - 14.00% | Upto 65 Lakhs INR |
| HSBC Bank | 10.00% - 14.00% | Upto 20 Lakhs INR |
| Bank of India | 11.25% - 12.00% | Upto 30 Lakhs INR |
Collateral vs Non-Collateral Education Loans: Comparison
| Features | Collateral Education Loan | Non-Collateral Education Loan |
|---|---|---|
| Collateral or Security | Tangible or Intangible security is required to get a larger loan amount | No security or collateral is needed to get the education loan |
| Loan Amount | It ranges from INR 20 Lakhs-1 Crore | It ranges from INR 4 Lakhs-70 Lakhs, depending on the lender |
| Interest Rates | Lower interest rates, e.g., 8.25%-11.75% | Higher Interest rates due to risk, e.g. 11.00%-14.00% |
| Requirement of Co-Applicant | A co-applicant is not required | A co-applicant is required in most cases |
| Processing Time | It takes about 20-30 days due to the assessment of collaterals | It takes less time in comparison to a collateral education loan |
Scholarships
- After education loans, scholarships are another popular way to fund overseas education.Â
- Scholarships are awarded by governments, universities, and private or non-governmental organisations.Â
- Applicants must apply for scholarships as soon as they receive the confirmed offer letter from the university.Â
- These financial aids can be broadly classified into two main categories.
Merit-Based Scholarships
- These scholarships are awarded to extraordinary applicants with exceptional academic records in previous studies, depending on the country and university.Â
- These scholarships may fully or partially cover the study cost and living expenses (between 25% and 75%).Â
- Below are some of the popular country-specific merit-based scholarships for Indian students.
| Country | Scholarships | What does it cover? | Link to Apply |
|---|---|---|---|
| USA | Fulbright-Nehru Master's Fellowships | Full Tuition Fee Full Living Expenses J1 Visa Fee Round trip economy class ticket cost Sickness coverage | https://www.usief.org.in/fulbright-nehru-fellowships.aspx |
| UK | Chevening Scholarships | Full Tuition Fee Full Living Expenses Round trip economy class ticket cost | https://www.chevening.org/scholarship/india/ |
| Canada | Ontario Graduate Scholarships | Tuition Fee upto INR 6 Lakh (INR 3 Lakh per term) | https://www.sgs.utoronto.ca/awards/ontario-graduate-scholarship/ |
| France | Erasmus Mundus Joint Master’s Scholarships | Full Tuition Fee Full Living Expenses Travel Cost Visa Fee | https://erasmus-plus.ec.europa.eu/opportunities/opportunities-for-individuals/students/erasmus-mundus-joint-masters |
| Germany | DAAD Scholarships | Monthly stipend of EUR 66,000-1 Lakh Health insurance expenses Travel Allowance Accommodation | https://www.daad.de/en/studying-in-germany/scholarships/ |
| Australia | Australia Awards Scholarships | Full Tuition Fee Round trip economy class ticket cost Establishment allowance Full living expenses Overseas student health cover | https://www.dfat.gov.au/people-to-people/australia-awards/Pages/how-to-apply-for-an-australia-awards-scholarship |
Need-Based Scholarships
- The need-based scholarships are provided to those students who are financially backward and cannot afford expenses on their own.Â
- This covers full or partial expenses such as the cost of study and cost of living, depending on the circumstances and award provider.Â
- Some of the popular need-based scholarships for Indian students are tabulated below.
| Scholarships | Benefits | Link to Apply |
|---|---|---|
| Inlaks Shivdasani Foundation Scholarships | Grant upto INR 85 Lakh) Full Tuition Fee Living Expenses Travel cost | https://inlaksfoundation.org/opportunities/scholarship/ |
| JN Tata Endowment Loan Scholarships | Loan amount granted upto 10 Lakh at the interest rate of 2% Travel grants upto INR 50,000 | https://jntataendowment.org/ |
| KC Mahindra Scholarships | Study Grant upto 10 Lakh | https://www.kcmet.org/what-we-do-scholarship-grants.aspx |
| Aga Khan Foundation International Scholarships | 50% Loan 50% Grant The amount may vary depending on the country | https://the.akdn/en/what-we-do/developing-human-capacity/education/international-scholarships |
| National Overseas Scholarship Scheme | Covers the full tuition fee Covers visa application fee Airfare allowance Medical insurance Annual maintenance allowance of INR 13 Lakh | https://nosmsje.gov.in/nosmsje/ |
Part-Time Employment
- Part-time employment allows international students to enhance their professional and soft skills while managing their expenses on their own.
- The minimum wage that a student earns while pursuing part-time jobs varies between INR 600-1,300 per hour, depending on the country.
| Country | Maximum Working Hours (Per Week) | Minimum Wages Per Hour |
|---|---|---|
| USA | 20 Hours | USD 7-10 or INR 600-800 |
| UK | 20 Hours | GBP 8-11 or INR 800-1,100 |
| Canada | 24 Hours | CAD 17 or INR 1,000 |
| France | 20 Hours | EUR 11 or INR 1,000 |
| Germany | 24 Hours | EUR 12 or 1,000 |
| Australia | 24 Hours | AUD 24 or 1,300 |
Key Takeaways by AdmitX
Indian students can arrange funds to cover the expenses of pursuing higher education abroad through education loans, scholarships, and part-time work opportunities.
These funds are often utilised to cover tuition fees, living expenses, and other expenses such as travel, visa, health insurance premiums, flight tickets, etc. With careful planning, through research and timely applications, applicants can utilise one or more of these resources to fund their overseas education.
FAQs
What are some fully-funded scholarships to study abroad?
Some scholarship schemes, such as the Fulbright-Nehru Master’s Fellowship, Chevening Scholarship, Erasmus Mundus Joint Master’s Scholarships, and Australia Awards Scholarships, provide 100% scholarships for studying abroad.
What are the countries in which I can pursue higher education at a low cost?
Sweden, Iceland, Norway, Denmark, Italy, and Spain are the few countries where you can pursue higher education at a cost. The cost of studying in these countries is around EUR 1,000-1,500 or INR 88,000-1 Lakh per year.
How can I fund my higher education abroad?
You can fund your overseas education by saving money, taking educational loans and scholarships, and pursuing part-time employment while studying abroad.
How can AdmitX help me to fund my overseas education?
The Launchpad Scholarship of AdmitX provides a guaranteed scholarship, which means that irrespective of your desired course or study level, you will get a guaranteed cash scholarship of up to ₹2,00,000. Additionally, applicants can also get additional benefits worth ₹2,00,000.
Can I get a loan to study abroad?
You can get an education loan depending on your academic qualifications, study goals, requirements, and university from the extensive network of banks and NBFCs.
