If you have secured admission to your dream college in Australia, you can now fulfill it. After securing admission to a university or college abroad, your next concern will probably be determining the source of fund for your educational and personal expenses. Even though the cost of studying in Australia is not as high as that of the United Kingdom or in the United States, studying in Australia is still an expensive option as compared to studying in India. However, you can take advantage of the Educational Loan Scheme for higher education in Australia. Before, applying for educational loans, there are certain points that you need to know.
In India, almost all the major banks are offering loans to deserving students who wish to pursue higher studies in Australia. The loans are offered to those Indian students (resident) who have secured admission in any of the bank's list of approved course or universities. Banks have simplified the application process so that every student can take advantage of and apply for Foreign Education. The main endeavor of these banks is to grant privilege to a meritorious student who wishes to pursue higher education outside the country.
Key Pointers to Remember While Applying for Australian Education Loan
Basically, when you apply for a loan, you will be treated as the borrower and your parents or guardians as co-borrower. The loan is permitted based on the borrower's papers. The loan amount or the terms of loans differ from bank to bank. As of the present, Indian banks lend up to a maximum of Rs 20 lakhs for studying abroad. It generally covers:
- Tuition fees payable to college/school
- Examination /library /hostel charges
- Travel expenses
- Purchase of books /equipment /uniform
- Cost of two-wheelers (optional)
Repayment of loan
You can repay your loan in the form of EMIs which will start one year after the course or six months after the graduate has got a job, whichever is earlier. The term can be from 3-8 years. Most banks do not require any margin up to Rs 4 lakh and, beyond that, 15 percent margins are charged.
Generally, banks do not require collateral security for loans up to Rs. 4 lakhs. However, loans ranging from Rs. 4 lakhs to Rs. 7.50 lakhs, most banks require collateral in the form of a satisfactory third party guarantee.
For loans above Rs. 7.50 lakhs, collateral security of appropriate value or co-obligation of parents/guardian/third party guarantee along with the assignment of future income of the student for the payment of installments may be obtained.
Banks accept security in the form of:
- Government Securities/ public sector bonds
- Units of UTI, NSC, KVP, LIC policy, gold, shares/debentures,
- Bank deposit in the name of the student, parent/guardian or any other third party with suitable margin.
Some of the Indian Banks that offers abroad study loans are:
|Union Bank of India||INR 15,00,000|
|State Bank of India||INR 20,00,000|
|Indian Bank||INR 20,00,000|
|Punjab National Bank||INR 20,00,000|
Note: Most banks provide facilities for online application.
Some of the important things that bank scrutinize before granting loan:
- The repayment capacity of the student's parents/family/Sponsor.
- The value of Collateral Security. Bank usually got the valuation of the collateral done from an approved Valuator only then process the loan application.
- Margin money: Usually in case of Overseas education loan the student family to contribute some margin money, usually its 25%. For example, if a student is applying for Rs. 20 Lakh loan and the margin money is 25% then Rs.5 lakhs has to be contributed by Student's Family.
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