Financing Overseas Education – Education Loans Vs. Self Funding

Financing Overseas Education – Education Loans Vs. Self Funding

data profile image

Updated on

Are you planning for your overseas education?

If yes, the first thing you need to do is plan your finances! Education loans VS self funding is the biggest question that can hit your mind whenever you say YES to foreign education.

One big question that gawks at your face when deciding to study abroad is choosing an education loan VS self funding. Every year, meticulous students go through this dilemma because of lack of awareness and guidance. If an expert could guide you on how to best plan your finances, things would have been easier.

Wouldn’t they?

When you weigh all your options while deciding on your foreign university and program, why not consider all important factors when funding your overseas education? For example an important factor such as foreign exchange rate which can affect the amount your spend.

Here we have listed various aspects that you must consider before planning finances for your study abroad venture.

Bulk Payment Vs. Easy Installments

Make timely payments to the university with an education loan!

You pay the full-year fee in one shot when you pay all your overseas education expenses via your savings and investments. Making bulk payments takes out a big chunk of your funds in one go and can jeopardize your financial stability. On the other hand, education loans are paid off in easy EMIs. Whenever requested, your bank pays off your education fees without you needing to disturb your finances.

Opportunity Cost Vs. Opportunity to Earn

Do you know education loans offer you an opportunity to earn?

Yes, you’ve read it right! 

Pursuing your education in a foreign land is exotically expensive. If you do not strike the right metrics for your finances, you will drain your bank balance. When you self-finance your education, you bear the opportunity cost. The amount you could have invested somewhere directly goes to your university. At the same time, an education loan gives you a great opportunity to earn. You can simultaneously pay off the interest on your education loan by interest harvested from the money you have lent.

Tax Benefits Vs. No Tax Benefits

The tax benefit is the most lucrative advantage of taking an education loan. You can get a tax deduction on the interest you pay on your study abroad loan. If you decide to pay off your educational expenses using your savings and investment, you are not entitled to any such benefit in tax returns. A tax exemption without any upper cap is a great way to save tax and manage your finances.

Cost inflation Cover Vs. No Cover

Did you know that the cost of your foreign education can see a sudden hike with a fluctuation in the foreign exchange rate?

That’s true!

For any slight change in the foreign exchange rate or the inflation rate, you will have to pay the additional cost of education. Self-funding provides no such cover against such market fluctuations. Education loans can come in very handy at such junctions. You can avail the loan amount upto to the sanctioned limit. Your education loan can cover any fluctuation without affecting your study abroad adventure.

Positive Credit Score Vs. No Credit History

Approach your future financial needs with positive credit history!

Having a positive history can come in handy! Positive credit history can help students get credit cards and other loans once they have completed their education. Education loans are a great way to build a positive credit score. With self-financing, no such chance can be availed. It is not easy to get credit cards with great credit limits with no credit history.

Liquidate Assets Vs. Get Easy Proof of Funds

Arranging liquid funds to afford one-year expenses plus 50% more to prove your financial capacity to pay tuition fees can be difficult. When you are funding your overseas education without an education loan, you will have to liquidate your assets to fulfill the requirement of a solvency letter. When you take an education loan, there is no need to maintain liquid assets to provide proof of funds. A solvency/ sanction letter issued by the lender financial institution can work as proof of funds.

From the above significant points, it is clear that education loans provide ease and flexibility when it comes to your overseas education expenses. Estimating your budget is indeed the first step while deciding if you will need an education loan or not. You might want to take the expert’s advice and then move forward.

ForeignAdmits offers free financial advisory!

Financial decisions are not easy. While bearing the cost of foreign education, unexpected expenses can disturb your financial planning. ForeignAdmits offers domain intelligence and assistance by offering a budget estimator tool that will give you a fair estimate of all the expenses. It can help you find a balanced financial mix.

Do you know that ForeignAdmits can help you get a 0.25% lower interest rate even if you already have got your loan approved?

Well, that’s true!

Our financial advisors will not only get you the best interest rates with a single application process but also allow you to track the progress of your application in real-time. Our loan finder, loan eligibility, co-applicant eligibility, and EMI calculator tools give you the perfect headstart with the education loan process. We have tie-ups with 15+ trusted financial institutions that offer education loans at economic interest rates.

So if you are thinking of funding your study abroad dream with an education loan, ForeignAdmits can be your perfect financial advisor, helping you in the dilemma of education loans vs self funding the best possible way. Contact us today to avoid financial complexities of the funding process. Sign up at ForeignAdmits to avail our wide range of overseas education services and get the best financial advisors at your disposal.

At ForeignAdmits, we understand how important this decision is. We are here to help you every step of the way, from finding the right school to getting admitted and securing scholarships.

ForeignAdmits have a team of experienced counselors who can provide you with customized guidance based on your individual needscontact us today to get started. We look forward to helping you achieve your educational and career goals!