Pursuing education abroad is a dream for several students as well as their parents. Studying abroad is not just about acquiring a degree and securing a well paying job. It is also about getting opportunities to be taught by some of the best minds and networking with peers from different parts of the globe. Funding foreign education with one’s own resources may not always be possible and hence one may have to seek an education loan. However, it is important to understand the financial implication of such an education loan before taking the plunge. Both the students and family must consider the following before taking a final decision:
- Availability of scholarships:
Students and their parents should first enquire about the availability of scholarships or grants. Foreign universities offer a plethora of scholarships. Grants may even be provided by local trusts. Funds offered by such scholarships or grants can cover a substantial part of one’s expenses and thus parents and students can consider an education loan to cover the remaining portion. One can come across these scholarships by searching for ‘how to finance study abroad’ on search engines.
- Is their education loan tax deductible?
The Income Tax Act provides for deduction of the loan paid on education loan interest as against income of the person. Such deduction however is restricted to certain institutions and it must be verified if such benefit is available through your institution.
- Student profile:
The student profile would determine the number of fees being charged. Certain universities charge higher for foreign students as opposed to the local students.
- Other expenses:
Apart from the above, various other expenses such as lodging, food as well as books must be considered for foreign education loans. However, one can manage these expenses by taking up a part time job. Nevertheless, it is best to account for these expenses as combined together they can result in a substantial amount.
Strong student performance in the past and a reputed university might serve as the eligibility criteria for personal loans (https://www.fullertonindia.com/personal-loan-eligibility.aspx) apart from the CIBIL score. These factors must be considered as the question of how to finance study abroad arises.
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