Ever since the concept of the educational loans came into existence, pursuing ambitions have never been easier. So, if you're considering to study abroad don't hold yourself back due to lack of money.
All the students who wish to pursue their ambitions will have the privilege of the increased educational loan portfolio by Commercial banks. The loans can be repaid in the form of equated monthly instalments or EMIs which begins from one year after the course of six months after obtaining a job. The tenure can be anything from 3 to 8 years.
Here are steps to follow for filling out a loan application form -
STEP 1. Check the recognition of the course or institute by the bank
Many international courses and colleges are not recognized by Indian banks for loans. That means you may not get a loan if your choice of course or college fall in that category. Check for such a list at all banks you plan to apply for a loan.
STEP 2. Find out the amount of loan required
Roughly estimate the expenditure. Discuss with the family on what amount is affordable and what amount is required to take a loan.
STEP 3. Search out various loan options
STEP 4. Compare the available options and find out the optimum one
Go through all the terms and conditions from the bank before opting for the education loan. You should be clear of these facts -
- Which offers the lowest interest rate
- How long will I be paying the loan
- How long can I defer payments while studying
- Is there any option for deferring payments if faced into a financial problem
STEP 5. Apply for the loan to Study Abroad.
The following important documents are required for almost all loan applications -
- Completed Education Loan Application Form
- Mark sheets of last qualifying examination
- Proof of admission, scholarship etc.
- Schedule of expenses for the specified course
- Two passport size photographs
- Borrower's bank account statement for the last six months
- Income tax assessment order of the last 2 years
- A brief statement of assets and liabilities of the co-borrower
- Proof of Income (i.e. salary slips/Form 16)
Things to keep in mind
There are a few important things that banks scrutinize before granting loans. You need to keep them in mind before you apply for a loan, and they are as follow –
- Repayment capacity of the student's parents/family/sponsor.
- The value of collateral security. Banks usually get the valuation of the collateral done from an approved valuator
- Margin money. Usually, in the case of overseas education loan, the student family is required to contribute some margin money, which is usually 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 the student's family.
Related article: Things to know before applying for foreign education loan