All About Student Loans for Studying in France
All About Student Loans for Studying in France: What You Need to Know
Introduction
Whether due to the best quality education, industrial exposure, high employment, or affordable tuition fees, France is becoming the highly sought-after destination for higher education.
Whatever your reason for studying in France, it’s understandable that sometimes abroad education can be expensive. But this shouldn’t stop you from realizing your study abroad dream.
Aspiring students have many options to support their higher education in France, such as scholarships and France student loans.
If you are not eligible for scholarships, then an Education loan for France is your best option to gain access to funding.
But first, you need to discover various loan options and figure out which option is the best fit according to your profile.
We know you might be asking yourself, “Which education loan am I eligible for?”, “Which type of student loan is right to aid my higher education”, “What are the process and document requirements to apply for an education loan?”, and so on!
To clear all your doubts regarding student loans in France, we have listed down answers to all the above and more questions. Continue reading to know all about education loans for France.
Reasons To Get A Student Loan In France
Paying tuition fees in France and covering living and miscellaneous expenses are the main reasons why students seek financing through educational loans.
No doubt that the study cost in France is relatively low compared to other European countries, but on the other hand, the rising accommodation costs, travel costs, etc, necessitate students to take an education loan for France.
Tuition fees in France usually lie in the range of 1,500 EUR to 6,000 EUR annually, and the living expenses in France range between 1,000 EUR to 2,000 EUR annually.
Educational loans help students to manage and meet financial needs hassle-free and boost their career aspirations.
On the whole, France's student loan opens the doors to academic opportunities for students who don’t have a lot of savings to fund their higher education in France.
Different Types Of Education Loan In France
There are mainly two types of student loans in France, namely secured loans and unsecured loans. Let’s understand them in detail.
1. Secured Loans:
As the name suggests, secured loans are the ones that are secured with collateral. Such types of education loans require collateral as security and generally offer lower interest rates.
2. Unsecured Loans:
In contrast to secured loans, no collateral is required as security in unsecured loans. Such types of education loans usually offer higher interest rates and are provided by Non-Banking Financial Companies (NBFCs) and private banks.
Unsecured student loans can be taken for higher education in France without putting down any collateral to secure a loan. In secured student loans, you need to put down collateral. In case you fail to repay the loan amount, the lender can take ownership of the collateral, adding risk to the borrower, that is, you.
However, in unsecured loans, the risk is high for the lender, which is why it comes at higher costs.
Difference Between Secured Loan And Unsecured Loan
The main difference between secured and unsecured loans is the requirement for collateral. As stated above, secured loans require collateral as security, and unsecured loans don’t require collateral as security.
What is a collateral?
Collateral is mainly a property or something valuable that the borrower agrees to give to the lender in case the borrower cannot pay back the loan amount borrowed.
Financial institutions require applicants to pledge an asset against their education loan to secure loan repayment and minimize the risk.
What are the types of collateral?
The most common types of collateral for student loans are tangible assets, which includes non-agricultural land, house, apartment, bungalow, shop, etc., and intangible assets, such as fixed deposit, mutual funds, life insurance, stocks, etc.
Things To Consider When Applying For France Student Loan
Here are some factors that you should consider while selecting an education loan for France:
1️⃣ Loan Margin:
The loan margin in an education loan is a portion of the loan that a student needs to contribute. It is the amount paid by the students towards the total expenditure to study abroad.
Private banks and Non-Banking Finance Companies (NBFC) usually offer a loan margin of 0% and cover 100% of living and study expenses in France. However, public banks offer a loan margin of 10% and cover 90% of the student expenses in France.
2️⃣ Moratorium Period:
The moratorium period is the time period when the student is not able to repay the loan amount. During the moratorium period, the lender allows a student to take adequate time to manage their finances and prepare for loan repayment.
The moratorium period usually varies between 6 months to 1 year after the loan.
3️⃣ Repayment Tenure:
Repayment tenure refers to the time period when a student must repay the complete loan amount. The common repayment period for an education loan in France is usually 5 to 7 years, whereas there are some banks that provide a repayment period of 10 to 15 years.
Other factors to consider when applying for a student loan in France include:
4️⃣ Interest Rate
5️⃣ Loan Processing Time
6️⃣ Types Of Expenses Covered
7️⃣ Tax Exemptions
8️⃣ Collateral Security
Top Factors Affecting Education Loan Approval
✅ Academic Background:
An excellent academic record with proven credentials can help students secure a substantial loan amount to study in France.
Banks or financial institutions assess a student’s chances of employment after completing the course to make sure that the student will repay the loan amount after securing a job in France.
✅ University And Course Selection:
Selecting an accredited university with a high placement history and choosing the most lucrative and popular course with wide employment prospects in France directly impacts the approval of an education loan.
Banks or financial institutions will decline the education loan if the student has applied to an unrecognized university with a bad placement history or fewer employment opportunities.
✅ Credit History:
A good credit history of the applicant is essential for approval of student loans. Applicant or co-applicant with a high credit score increases the chances of loan approval.
✅ Income:
Banks or financial institutions will ask for income proof to check if the applicant or the parents seeking an education loan have a stable income.
The income proof mainly includes previous bank statements, salary slips, income tax returns, etc. Inadequate financial proof might lead to the rejection of an education loan.
Hence, to improve your chances of securing a France student loan, you need to:
- Get high academic results
- Apply to accredited French universities and educational institutions
- Showcase a strong financial background
- Highlight stable employment after the course completion
Eligibility Criteria For Education Loan In France
Below are some of the common eligibility criteria to be eligible for a French student loan:
- The applicant must have Indian citizenship.
- The applicant must have been accepted into a recognized French university and have received an admission letter from the same.
- The applicant's age must be 18 years. In case the age of the applicant is less than 18 years, the parents will have to apply for the loan.
- The applicant must have enrolled in a lucrative course with high employment opportunities.
- The applicant should have an exceptional academic profile.
Document Requirements For Student Loan In France
Listed below are the essential documents required when applying for an education loan in France.
- Student education loan application form (Duly signed and filled)
- Admission or acceptance letters from a reputable French university
- Passport-size photographs (Both Applicant and Co-Applicant)
- Valid Passport
- Identity proof such as PAN card, Aadhar card, Voter ID, or other IDs (Both Applicant and Co-Applicant)
- Residential proof (Proof of both Student and Guarantor)
- Academic mark sheets, certificates, and degrees
- Birth certificate
- Standardized test scores (GMAT / GRE / IELTS / TOEFL)
- Proof of finances
- Guarantor’s proof of income
- Documents related to collateral (for secured loans)
- Bank statements for one year
- University and course details with fee structure
- 3 years Income tax returns of the student (if applicable)
- 3 years Income tax returns of co-applicant
- Proof of relationship with co-applicant
Application Process To Apply For Student Loan In France
Here is the step-by-step guide to applying for an education loan in France:
Step 1: Research
Do complete research about the different types of student loans, banks or financial institutions providing education loans, eligibility criteria, and document requirements.
Step 2: Calculation
Get an estimate of the amount of loan you will require to study in France. Calculate various expenses such as university fees, accommodation costs, exams, laboratory and library fees, living expenses, other study expenses, travel costs, and more to identify the right amount of loan you require.
Step 3: Admission Letter
The next step is to receive an admission letter from an accredited university in France. You will be required to show the admission or acceptance letter to demonstrate that you are admitted to the respective French university.
Step 4: Loan Comparison
Compare the different loan options available for higher education in France. While comparing, you must consider factors such as loan margin, repayment tenure, moratorium period, interest rate, processing time and fee, income tax exemptions, expenses covered, etc. Consider these parameters and finalize the one that best suits your requirements.
Step 5: Bank Finalization
There are many banks and financial institutions that offer Indian students education loans to study in France. Some of the most popular ones are HDFC Credila, State Bank of India education loan, IDFC First Bank, ICICI Bank, Axis Bank, Avanse, Auxilo, and Incred.
Step 6: Form Filling
Once you have selected the bank, best loan, and amount of loan, it’s time to fill out the education loan application form.
Step 7: Document Submission
Gather all the essential documents asked by the bank or financial institution and submit them along with a completely filled and signed application form. Provide collateral documents if required.
Step 8: Sign The Document
After the approval of the student loan, the bank will issue you a loan document, which will be required to be signed by the applicant. Read the loan document carefully, sign it, and submit it to the bank.
Once the bank receives the signed agreement, it will provide the loan amount in installments or as required by the French university.
Expenses Covered Under Education Loan In France
Different types of expenses covered under the student loan in France are listed below:
- Tuition fees
- Accommodation/ hostel charges
- Exam, laboratory, and library fees
- Caution deposit/ building fund/ refundable deposit
- Study tours, project work, or thesis expenses
- Other expenses include travel costs, books and supplies, recreational expenses, equipment costs, uniforms, and miscellaneous expenses.
Government Guidelines To Know
There are some guidelines set by the government for banks to process education loans. Students must be aware of such government guidelines.
- Banks are not allowed to ask applicants for due certificates as pre-conditions for student loans you are applying for.
- Banks are allowed to ask for an affidavit or declaration form to confirm that the applicant has not acquired any other loans from other banks or financial institutions.
- Under priority sector lending, the loan needs to be disposed of within a period of 15 days to 1 month and should not exceed this stipulated time limit.
- After the loan approval, banks can provide certain relaxations and flexibility in the loan margin, security norms, and eligibility.
Choose Edugo Abroad For France Student Loan
While this blog must have helped you gain a better understanding of student loans in France, remember that applying for education loans with experts can be helpful.
Renowned as the most trusted Europe Education Consultant in India, Edugo Abroad has extensive experience in helping students secure student loans at the best interest rate without any hidden charges.
Based on the student’s profile and requirements, our experts provide the best options to cover their expenses abroad. Contact us to get your loan sanctioned and fulfill your study abroad dream.
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