Easy steps to follow when applying for an education loan for studies abroad: You are a diligent student who has cracked through your GRE/GMAT score and has been secured admission to your dream college also? If financing is your worry, then let me tell you it’s come to an end. Nationalized Banks have fastened the method of obtaining an overseas education loan by simplifying the complications of funding. This article is going to clear the entire cloud in your mind about education loans for studies abroad.
Easy steps to follow when applying for an education loan for studies abroad
Step 1: Determine the loan amount
To start out the method of education overseas loans you should place the hassle into the calculation of loan amount before the admission is confirmed. The expenditures evaluated should cover the hostel and college fees, examinations, laboratories, library fees, costs of books and equipment, and travel costs. The loan amount should be accurate because it can make a difference in the interest and the security required.
Step 2: Compare lenders
The whole process of comparing different financial institutions is appalling to students and their families since it demands plenty of time and energy. As an alternative to visiting different banks, use EMI calculators and the world wide web because it provides one window platform i.e. Students can relate and choose from all the financiers on different parameters to suit the simplest needs. You must keep in mind your eligibility among lenders for education loans for abroad studies.
Step 3: Check eligibility criteria
Check your loan eligibility with the specific lender. In general, the education loan sanction depends on:
- Student Profile which includes GPA, competitive exams (GRE/GMAT), Course, Institution, and Country.
- Co-borrower Credentials – Parents’ IT returns, CIBIL score, net worth, and free cash in hand are considered.
- Collateral Portfolio (if applying for secured loans) – Collateral should be mortgageable which means it should be registered with proper OC & CC.
Step 4: Apply for an education loan
The process of application begins with filling out the appliance form alongside all the required documents like-
● An offer letter is given by the institution (proof of admission)
● Loan submission form (duly filled)
● The approximate cost of study
● Original education credentials/mark sheets
● Documents of succeeding exams (GRE, TOEFL)
● Residential Proof of candidate and co-borrower
● IT earnings of co-borrower
● PAN card and other identity proofs of pupil and co-borrower
● Income proof of co-borrower
● A valid passport
● Details of properties and liabilities of parents/co-applicants.
Step 5: Loan Approval
Once all the documents are verified, you will receive a communication from the lender that your loan application has been approved. You will be then required to sign the papers related to the loan approval. You will get a detailed list of all the terms and conditions of your loan, what will be the installments, repayment tenure, and more. You must read everything carefully and then sign the documents.
Key points to remember
- Moratorium period: This is the time duration during which the borrower need not make any payment to the bank. This period differs from bank to bank and could last for some time after completion of the academic program.
- Loan Margin: Generally, banks do not offer the complete amount i.e. 100% money needed to finance the education overseas. The popular nationalized banks issue 90% of the total amount, the remaining 10% has to be arranged by the applicant.
- Effect of Exchange Rate: One must calculate the amount which will be received at the time of disbursement, as any alteration in the conversion rate can affect the sum you will be receiving.
- Read the fine print: This is one rule of thumb, as you must be crystal clear with all the conditions stated in the loan agreement. If you have any qualms regarding anything then always seek advice from the experts apart from the bank representative.
Whenever the student needs the loan amount to be disbursed, he can write to the bank with the fee details from the college. The loan amount is, in most cases, transferred directly to the university or college. The repayment for education loan in India for study abroad begins after the moratorium period also known as the EMI holiday or as soon as the person gets a job (whichever is earlier). Some financers demand you to have part interest payments during the period of study. The interest is levied even during the study period and therefore the moratorium period but is accumulated for education loan abroad.
With a little research and the help of experts, students can understand the education loan process and can get their loan done without any hassle.