Studying abroad in Germany is a dream for many international students, but it comes with financial considerations. To pursue higher education in Germany, students often opt for educational loans to support their academic journey and cover the cost of living.
In this comprehensive guide, we will explore the expenses of studying in Germany, the need for student education loans, eligibility criteria, required documents, top lenders, and the repayment process.
Understanding the Cost of Studying in Germany
Studying in Germany involves two major expenses – the cost of education and the cost of living. Public universities in Germany offer free or highly affordable tuition fees for international students, making it an attractive option. However, private universities may charge higher tuition fees ranging from 20,000 to 40,000 EUR per year. Additionally, students must consider the cost of living, which varies from 10,200 to 12,000 EUR annually.
Importance of a Student Education Loan for Germany
While tuition fees may not be a major concern in public universities, the overall cost of living can be demanding for international students. Part-time jobs can help, but they might not be sufficient to cover all expenses. Therefore, a student loan becomes a valuable option to ensure a stress-free academic journey.
Process for Applying For an Education Loan
The process of applying for an education loan to study in Germany is similar to applying for loans in other study abroad destinations, with some minor adjustments. German universities admit students twice a year, in January and September. After securing admission to their chosen university, the next significant challenge for students is arranging the funds for their educational expenses. Fortunately, studying in Germany is highly cost-effective, as undergraduate courses have no tuition fees, and graduate courses have minimal tuition fees.
For students and families in India seeking a student loan, numerous Banking and Non-Banking institutions offer loans at low-interest rates to support deserving students pursuing higher education abroad. Applying for a student loan has become more straightforward over time, making it easier for students and their parents. However, before proceeding with the application, certain aspects need to be considered. In some cases, providing collateral may be required as security, but this depends on individual circumstances. Typically, there will be a co-applicant, which could be a parent, sibling, in-law, or spouse.
Expenses covered under the loan include
The loan covers the following expenses:
- Tuition fees (if applicable) as mentioned in the documents provided by the university during admission.
- Accommodation expenses during the student’s stay in Germany.
- Caution deposit money or security required by the university.
- Travel expenses related to the academic pursuits.
- Expenses related to study tours and project work throughout the academic year.
- Costs associated with purchasing books, laptops, and stationary required for the course.
- Other reasonable expenses essential for the successful completion of the course.
It’s important to note that the loan is intended solely for educational purposes and does not include coverage for personal expenses.
Exploring Education Loan Options in Germany
a. BAföG – Bundesausbildungsförderungsgesetz (Federal Training Assistance Act)
BAföG is a financial support program designed to assist students undergoing training in Germany. It provides a combination of zero-interest loans and simple grants. To be eligible, students must meet certain residency requirements or have German or EU nationality connections.
b. Other Bank Loans
Apart from BAföG, international students can explore education loans offered by various banks and financial institutions, such as Deutsche Bank or the KFW-Studienkredit loan. Eligibility criteria for these loans vary between banks, making it essential for Indian students to seek professional advice.
Eligibility Criteria for a Student Loan for Germany
To secure an education loan for Germany, aspiring students need to meet specific eligibility conditions, including:
- Being an Indian citizen
- Obtaining acceptance at a recognized German university
- Being at least 18 years of age
- Enrolling in a job-oriented course to ensure loan repayment
- Having 8,640 EUR per year deposited into a blocked account as proof of financial stability.
Types of Education Loans: Secured and Unsecured
a. Secured Loan
A secured education loan requires providing collateral security to the bank, which can be an asset or property. These loans often come with lower interest rates, making them a suitable option for students with valuable collateral.
b. Unsecured Loan
Unsecured education loans do not require any collateral, but they generally come with higher interest rates. These loans are ideal for students who cannot provide assets as security but are still eligible for financial assistance.
Documents Required for Getting a Student Loan for Germany
To obtain an education loan, students must submit essential documents that validate their loan application:
- Letter of admission from the chosen German university
- Completely filled loan application form
- Detailed cost of study documents
- Identification and residence proof
- PAN details of the borrower
- Previous academic records and certificates
- Guarantor or student’s bank statements
- Guarantor or student’s statement of assets (for secured loans)
- Guarantor or student’s proof of income.
- Application Timeline for Education Loan in Germany
Applying for an education loan for Germany should be done promptly to ensure timely processing. Students are advised to apply within 15 days to 1.5 months after receiving their acceptance letter from a German university.
Top Lenders for Education Loan in Germany
Several banks and lenders offer student loans for Germany, catering to different financial needs:
a. SBI Edvantage Education Loan
- Loan Amount: ₹10.00 Lakhs to ₹1.25 Crores
- Interest Rate: 10.80% to 12.50%
- Coverage: Limited living expenses (accommodation and travel expenses)
b. HDFC Credila Study Abroad Loan
- Loan Amount: ₹10.00 Lakhs to ₹50.00 Lakhs
- Interest Rate: 13.00% to 16.00%
- Coverage: Up to 100% living expenses
c. Avanse Student Loans
- Loan Amount: ₹4.00 Lakhs to ₹1.25 Crores
- Interest Rate: 12.00% to 16.00%
- Coverage: 75% of living expenses (capped at 20% of the sanctioned loan amount)
d. ICICI Bank Education Loan
- Loan Amount: ₹4.00 Lakhs to ₹36.00 Lakhs
- Interest Rate: 11.25% to 14.25%
- Coverage: Insurance + Travel + Accommodation expenses
e. PNB Udaan Education Loan
- Loan Amount: ₹20.00 Lakhs to ₹1.00 Crore
- Interest Rate: 10.35% to 12.25%
- Coverage: No living expenses covered
Repayment of the Education Loan
Students must plan for loan repayment before availing the loan. The repayment schedule for Indian education loans varies depending on the type of bank:
- Public or Nationalized Bank: Interest payment and EMIs begin six months after course completion.
- Private Bank: Interest payment starts immediately after course completion, and EMIs begin one year after course completion.
Is IELTS required for Germany?
If you are enrolling in an English-taught course, IELTS might be required, but for other courses, it’s not mandatory as Germany is not an English-speaking country.
How much is proof of funds for Germany?
As proof of funds to study in Germany, you need to show one year’s living expenses in your blocked account.
Which colleges are free in Germany?
All public universities in Germany provide free education to everyone, with only a limited yearly contribution collected from students.
How much do Indian students earn in Germany?
Indian students working in Germany earn up to 9.80 euros per hour, enabling them to repay their student loans within a maximum of 3 years.
Do they accept students with education loans in Germany?
Yes, many international students study in Germany with the help of an education loan, and it is manageable to repay it during employment.
Are blocked German bank accounts covered by the education loan?
Yes, many Indian banks cover the expenses of the blocked account in Germany.
Can I get an education loan for Germany without collateral?
Yes, student loans for Germany are also available for foreigners without requiring collateral.
Where can you get student loans in Germany for international students?
International students can avail the BAföG loan if they can provide sufficient proof of residency in Germany and the ability to repay the loan while continuing to stay in the country.
How much do you need a loan to study in Germany?
The cost of studying in Germany ranges from 11,000 to 16,000 EUR, and for this, you may need a loan ranging from 8 lakh to 12 lakh.
Can I get a loan to study in Germany?
Yes, you can obtain an education loan to study in Germany, with secured loans of up to 1.5 crore and unsecured loans of up to 75 lakh available.
How can international students get a student loan in Germany?
Getting a student loan is straightforward for Indian students. Simply request a callback or fill out a common application form.
How much total money is required to study in Germany?
If you receive admission to a public university, you won’t have to pay tuition fees. The approximate cost will be around 10 lakh per annum, covering living expenses.
How can I study in Germany at a cheaper cost?
To study affordably in Germany, secure admission to a public university with no tuition fees, and consider sharing accommodation to save on rent and utility bills.
Is Germany costly for Indians?
Germany is not only known for free education but is also relatively affordable, with transportation and healthcare under the public sector.
Securing an educational loan to study in Germany can be a smart investment in one’s future. By understanding the costs, eligibility criteria, required documents, and loan options, students can make informed decisions about financing their academic journey. Planning ahead and considering all available options will ensure a seamless and successful experience studying in Germany.