The number of students taking education loans for studies abroad has steadily increased over the past 10 years. According to data provided in the Parliament, 22,200 students received school loan disbursement in 2012-13, which increased to 69,898 in 2020.
Live TV
During the pandemic year (2021), 56,930 students applied for education loans, significantly fewer than the 69,183 students who applied for loans to study abroad in 2019. There was a slight increase in 2020, as mentioned earlier..
The report also revealed that student loans of Rs 39,268.82 crore were disbursed over the previous 10 years. In 2022, 1,200 students took out educational loans, according to UniCreds, extended arm of UniScholars.
"This number increased by about 400 percent compared to 2021, when only 300 students took their loans from UniCreds. Interestingly, the average loan amount requested increased by 10 percent during the period, while the loan interest rate fluctuated from 9 percent to as high as 15 percent, said Amit Singh Founder of UniCreds, the extended arm of UniScholars, while talking to CNBC-TV18.com.
What is the range of loans being availed?
The loan amount demanded in 2022 ranged between Rs 10-50 lakh. The average loan size was approximately Rs 25 lakh, which is 18 percent more than the average loan amount in 2021 of approximately Rs 21.5 lakh, as per UniCreds.
What are the demographics and gender details?
The top regions where students opt for loans in India are Telangana, Karnataka, Punjab and Maharashtra. Although the gender gap has narrowed over time, there are still about 20 percent more male students than females, Singh told CNBC-TV18.com.
Tips to avail education loans
According to Singh, it's not as easy as it sounds to obtain an educational loan, especially a large one, for studying abroad. In India, the application process for student loans can be difficult and long drawn out. This is because the lender will consider everything, including credit history, the loan amount, and the kind of institution you intend to enrol in.
So, Singh thinks it is better to use government programmes like the Credit Guarantee Fund Scheme for Education Loans (CGFSEL), which enables students to obtain an education loan up to Rs 7.5 lakh without providing any collateral or third-party guarantees.
"Also, students should determine if the institution or institute offers student loans through partnerships with banks or NBFCs. Such partnerships frequently result in quicker loan processing and lower overall student costs. Moreover, disbursements can be a smooth and hassle-free process," he said.
