Indian students spirits are high, approaching banks for education loan to fund studies abroad

Although the job options in West might be bleak but the spirits of Indian students are high they are approaching banks for education loan to fund their studies abroad.

This year the Indian students are taking loans of higher amount in comparison to those disbursed in the past. Moreover the students have changed their move, now they are opting for courses beyond the traditional geographies like the US and UK and also have widen their choice of courses.

The banks also claim that this year there has been increase in the overseas loan applications as against what they used to get before slowdown. The banks pointed out this year most of the students have applied for loans of higher amount than the maximum limit sanctioned by the banks themselves. an official, from the corporate office of Syndicate Bank said, “Previously a large number of foreign study loans used to be with the Rs 7.5 lakh range. Now the demand seems to have gone up to Rs 20-25 lakh and occasionally even Rs 30 lakh, which is beyond the bank’s maximum limit of Rs 20 lakh”.

Looking at the changing trend in the market, about a year ago the Oriental Bank of Commerce (OBC) had raised its maximum limit for overseas education loans from 15 lakh to Rs 20 lakh about a year ago.

Recently the State Bank of India, the largest education loan lender has slashed interest rates for education loans, sanctioned between May and September this year.

The bankers informed this year many Indian students are showing interest in countries like Australia and New Zealand, which are slightly cheaper as against the established education hub like the US. According to Syndicate Bank sources in terms of number of loans disbursed most of the students had applied for Australia, while in terms of size largest loans were disbursed for education in the US.

However there are some programs for which banks are taking caution while sanctioning loans. SC Sinha, executive director of Syndicate Bank pointed out, “Banks have been cautious of lending for pilot courses as well as air hostess training courses”.

Most of the banks said in spite of bleak employment situation in banking and financial institutions in the West, they are still giving loans for foreign degrees in finance and management. The Syndicate bank official maintained that although there have been no change in policy in terms of lending, then also banks are taking usual precautions in sanctioning education loans.