How to transfer an education loan?

The process of transferring an abroad education loan from one school or program to another and when it might be necessary to do so.

You must thoroughly examine a loan provider’s terms and conditions for loans for international education before choosing them.

But what if you wind up taking out an education loan from a lender with extremely high interest rates, whose loan repayment terms are inconvenient for you, or if you wish to switch schools or programs?

If you find yourself in such a circumstance, there is a solution that you may learn about by reading this article.

Can I transfer my education loan from one bank to another

  • Moving high-interest debt from one lender to another with a much lower interest rate and better repayment terms is an education loan transfer.
  • Lenders, in this case, include banks and NBFCs. Banks like SBI, Union Bank, and Bank of Baroda offer takeover loan programs to transfer student loans.
  • You may effortlessly switch your expensive education loan to SBI through the takeover loan program to lower monthly EMIs. The highest loan limit for this is INR 1.5 crores, with no processing cost.

Eligibility Criteria for Education Loan Transfer

Only if the loan applicant meets the following requirements may they apply for an education loan transfer:

  • There should be no more loan disbursements from the existing lender for the applicant. It indicates that no more money may be borrowed from that lender because the disbursements have already been made.
  • The borrower’s CIBIL score and the repayment of the previous loan must have begun in the form of EMIs. Go here to learn more about the CIBIL score.
  • The financing has to be a new takeover.
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Process of Education Loan Transfer

  • Your former lender will offer you a statement regarding the outstanding loan amount that has to be repaid after you decide to transfer your loan.
  • The bank offering the student loan refinancing must then get the presented statement.
  • After receipt of this statement, the loan application procedure will start as usual. When the loan has been approved, the new bank will send a check to pay off any outstanding debts owed to the previous lender.
  • Because the risk component connected with the new bank is relatively minimal, takeover loans always have lower interest rates than new loans.

Other Terms and Conditions for Education Loan Transfer

  • The new bank will take over the current collateral if you move an education loan with collateral.
  • In contrast, if you want to move a non-collateral loan to a public bank that typically provides loans based on collateral, you will need to provide the specific public bank with valuable collateral. The collateral will secure no loan margin and a 100% loan amount.
  • Because of the lower interest rates and better repayment options, moving student loans from one bank to another is usually advantageous. Nonetheless, to prevent any losses, think about researching previous patterns in loan transfers before making the decision.

Can we transfer education loans from one university to another?

Certainly, but you must inform the bank about the change and provide the necessary paperwork. You could now wonder, “If I switch universities, would I have to refund any loan amounts?”.

The short answer is no. You won’t be required to repay any loan sums if you switch universities. But, to take advantage of the most current modifications, you must speak with the bank.

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You must also present the necessary paperwork, including a letter of acceptance from the new school, proof of any scholarships you may have earned, and other records specified by the bank.

How long will it take for the bank to approve my request to switch universities?

Depending on the bank’s internal procedures and the intricacy of your request, the time it takes to accept your request to move universities may change.

It is advised that you contact your bank as soon as possible to establish a rough schedule.

Which bank is best for education loans abroad

Finding the best bank for school loan programs might take a lot of work because so many banks provide these loans. Following are the best banks and education loans to study abroad:

  • The State Bank of India: SBI Global Ed-Vantage Scheme
  • The Bank of Baroda: Baroda Scholar Scheme
  • The Punjab National Bank: PNB Udaan Scheme
  • Canara Bank: IBA Model Loan Product For Higher Studies Abroad

There is no such thing as a sure thing, and during your time studying abroad, you can decide that you want to switch colleges or countries after your loan has been approved and occasionally disbursed. You won’t need to worry about the changes afterward.