Applying for Education Loan to Study in New Zealand
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Applying for Education Loan to Study in New Zealand

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Aishwarya
Aishwarya Bhatnagar
Study Abroad Expert
Updated on Jul 31, 2023 19:01 IST
education loan in nz

If you are looking to study in New Zealand you would most likely need an educational loan. In fact, applying for a loan should be one of the first steps an aspirant must take into account. There are various national and international bodies that can help the candidates with this.

The government of India along with the Reserve Bank and Indian Bankers Association has formed an inclusive educational loan scheme. The very scheme allows a candidate to avail of a loan of Rs. 15 lakhs for studying abroad. However, the figures are not stable in nature for banks. Different banks have different limits for their education loans to help students study abroad. State Bank of India has capped it at Rs. 20 lakhs while Indian Bank has upgraded its maximum limit to Rs. 25 lakhs.

CheckStudent Guide to New Zealand (NZ)

How to Apply for Educational Loan in New Zealand?

To avail education loan aspirants need to meet some eligibility criteria:

Eligibility

  • Candidates seeking an educational loan should be an Indian national
  • The student should have secured admission to professional/ technical courses through the entrance test/selection process
  • The student should have secured admission to a foreign university/institution

Documents required

Before applying for an educational loan, candidates must keep the following documents in place:

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  • Mark sheets of the last qualifying examination for school and graduate studies in India
  • Proof of admission to the course
  • Scheduling of expenses for the course
  • Copies of the letter confirming the scholarship
  • Copies of foreign exchange permit, if applicable
  • Two passport-size photographs
  • Bank statement for the last six months of the borrower
  • Income tax assessment order not more than two years
  • Brief statements of assets and liabilities of the borrower
  • If you are not an existing bank customer you would need to establish your identity and give proof of residence

Check out: Cost of Living in New Zealand

Margin

If the course costs up to Rs 4 lakhs, then no margin is provided. But if the course cost exceeds Rs 4 lakhs, then a margin of 15% is provided.

Security

For granting loans to students, banks demand the following security/ collateral security. However, the requirements vary from bank to bank.

  • Loan up to Rs 4 lakhs - No collateral security
  • A loan above Rs 4 lakhs to Rs 7.5 lakhs - Security in the form of a satisfactory third-party guarantee
  • A loan above Rs 7.5 lakhs - Collateral security of suitable, Co-obligation of parents/ guardians/third Party along with assignment of future Income of the student for payment of Installments

Rate of Interest

  • The rate of interest is 10.75 % for up to Rs 4 lakhs and it does not exceed the Prime Lending Rates (PLR)
  • For a loan above Rs 4 lakhs, the interest rate is 11.75 % and it will not exceed PLR plus 1 per cent
  • However, the rate of interest is subject to changes as per the specifications of RBI or the concerned bank.

Repayment

Students can repay the loan in a time period of 5-7 years. Repayment of both principal and interest will start after one year after completion of the course or six months after getting employment, whichever is earlier.
Interest will be charged on a simple basis during the period of study/moratorium period. At the commencement of repayment, the accrued interest is added to the principal amount and Equated Monthly Installments (EMIs) are fixed on the total outstanding amount. After the commencement of repayment, the benefit of simple interest would be discontinued.

Processing Fee

Nearly all Indian banks do not charge any processing fee. The SBI accepts a deposit of INR 5000 for an education loan for studies abroad, which is adjusted in the margin money.

Disbursement

While applying for an education loan, in the case of a normal course, a candidate's future income prospect is taken into account. If needed, the means of your parent or guardian can also be taken into account to evaluate re-payment capability.

The loan is sanctioned as per the delegation of powers preferably by the branch nearest to the place. No application for an educational loan received is rejected without the accord of the next higher authority.

The loan is disbursed in stages as per the requirement or demand directly to the institutions/vendors of books/equipment/instruments to the extent possible.

Check Funding Sources to Support Studies in New Zealand.

Follow-up

The bank from which the candidate has availed the loan can contact the college/university authorities to send them the candidate's progress reports, at regular intervals.

Capability Certificate

Many foreign universities require the candidates to submit a certificate from their bankers about their solvency/ financial capability. This is done with a view to ensuring that the candidate's sponsors are capable enough to meet the expenses till the completion of studies. Consequently, the branches can also issue the capability certificate. For this, students would have to present financial and other supporting documents, if required.

Lastly, candidates would have to choose the right bank to provide a suitable educational loan scheme. Factors to evaluate the alternatives are many. For instance, whether the bank provides loans for the course candidates are opting for and if yes, then up to what extent, the margin and security requirements, the rate of interest etc.

The option is all yours after a detailed analysis.

Note: Details given can change from time to time. So students are advised to get the right information from the banks concerned.

Read more at Cost of Studying in New Zealand

Applicants who are finding it difficult to arrange for resources can apply for loan through Shiksha.

Also read:

About the Author
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Written by
Aishwarya Bhatnagar
Study Abroad Expert

Aishwarya is a professional Writer currently working as a Study Abroad Expert in the Editorial Team at Shiksha. She has over 5 years of experience and is skilled at creating Online Content with leveraged knowledge i... Read Full Bio

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Reviewed by
Anuradha
All courses in ANZ

Armed with B.Com from Delhi University, Anuradha Sharma has accumulated rich experience as an education counsellor. She is especially adept at handling Australia and NZ admission procedure. Before becoming a GTE Exp... Read Full Bio

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Comments

(28)

7 years ago

Only education loan is acceptable for New Zealand or l.a.p loan is also acceptable ?

Reply to

7 years ago

I have completed bsc.agriculture in india. I want to go to newzealand for further studt.I have choosen levrl 4 nd 5 horticulture course.but I was grooming all bank.but they did not givr me idea.also my home is not nanoc.so what can I do?

Reply to

7 years ago

Hello i have got admission graduate diploma in management i want unsecured loan I don't have property kindly suggest me

Reply to

7 years ago

II want education loan for diploma in newzealand against property... kindly suggest me about banks

Reply to

7 years ago

I want education loan for diploma course in new Zealand so please give me suggestions

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