Guide to Student Loans
Student loans have become the best method to gain higher education in India or abroad along with the cost of educational degrees for electing higher education in fields of engineering, medical and management, whichever has higher fees. Mostly, vast public sector and private sector banks offer educational loans to aspirants for further education. Going abroad for further study is a great opportunity to convert your dream into reality and goals, because the quality of overseas education is incomparable and somewhat fine. But many Indian students loose this opportunity just because of the tuition fees and the living expenses in foreign countries. In order to overcome this situation all the banks (both private and public) offer loans to aspirants for foreign studies. Student loan is an easy process, but you must gather the information regarding the process of application. Whenever you apply for a loan, you will be treated as the borrower and your parents or guardians as co-borrowers. The loan amounts vary from bank to bank.
Now a days, Indian banks lend up to a maximum of Rs 20 lakhs for studying abroad and it covers all these thing which are mentioned:
- Fee payable to college and hostel
- Examination, library, laboratory fee
- Purchase of books,
- Equipment, instruments,
- Caution deposit, building fund, refundable deposit
- Travel expenses
- Purchase of laptop (if required for the course)
The first major thing comes into the mind will be whether the candidate is eligible to apply for the loan or not. The eligibility criteria and the candidate must have a strong academic record. A person should be an Indian citizen and must be above the age of 18 years. Eligibility Criteria for UG & PG courses are as follows:
- For Graduation aspirants: Job oriented professional or technical courses should be provided by reputed universities.
- For Post-graduation aspirants: MCA, MBA, MS.
Providing security means if the candidate is unable to pay back the loan, the bank has all the right to sell the assets and recover the money the candidate owes them. Usually, if the loan amount is up to Rs 4 lakhs then the candidate do not need to provide any security. If the amount is between Rs 4 lakhs to Rs 7.5 lakhs then suitable third party guarantee is required. For amount between Rs 7.5 lakhs to Rs 20 lakhs, the candidate needs to provide 100% guarantee security.
Banks accept security in the form of:
- Government securities or public sector bonds
- Guarantee property like land or building
- Units of UTI, NSC, KVP, LIC policy, gold, shares or debentures
The main document the candidates have to provide is the acceptance letter sent by the university stating that the candidate has opted for the course, along with mentioning the schedule of fees. The candidate will also be needed to provide with the mark sheet of the last qualifying examination to show a strong academic record.
Repayment always starts only after the end of course. If the student has received a job within one year after the completion of course, the repayment will start immediately after one to six months from the date of employment. If the candidate is unable to secure a job within a full year of course completion, then repayment starts automatically, irrespective of your employment status.
Steps To Acquire A Student Loan
- Check whether the candidate’s opted course or institute is recognized by the bank.
- Decide how much amount of loan is required. A rough approximation of loan requirement must be made efficiently and must be discussed, over how it will be paid and does the candidate have selective funds in case of any emergency.
- Look for various loan options.
Visit all the banks and get all the details about the loan. This is the best way to clarify all the doubts and questions regarding the loan process of each bank.