New Zealand Education Loan - How to Apply, Eligibility, Requirements

Studying in top international universities is on the bucket list of most of the students. However, the budget is the deciding factor. If you need financial assistance, you can take an education loan to finance your studies abroad. Applying for an education loan to study abroad, requires careful research and planning to select the best possible terms.

If you are looking to study in New Zealand, you would most likely need an educational loan to cover the expenses. Not every student is lucky enough to get a scholarship for higher studies in NZ, so they apply for student loans. Applying for a study loan is not complex if you have all the required documents and you fulfil the eligibility.

Several private and government banks offer education loans to meritorious students for higher studies in India or abroad. To select the best education loan for abroad studies, you need to understand factors like the loan amount, rate of interest, EMI, repayment options, and other terms and conditions. The next step is to apply for a student loan with the required documents. This article will be helpful for those students who have plans to borrow study loans and have less information about the application process.

Check: Student Guide to New Zealand (NZ)

How to Apply for an Educational Loan

To avail education loan, aspirants need to apply for it. Banks and NBFCs offer loans to those students who fulfil the eligibility criteria set by the bank. Here, we have mentioned step by step guide to apply for education loan:

• Analyse and compare different schemes offered by study loan providers in India. Select the study loan which fits your needs.
• Fullfill the eligibility for your selected study loan.
• Visit the bank branch to apply for an education loan or apply through the Vidya Laxmi portal.
• fill up the application form with the required documents for the loan.
• The bank will assess your documents, and after verification, the loan amount will be disbursed.

Eligibility Criteria for Student Loan

Here, we have listed the eligibility for an education loan. 

• Nationality: Candidates seeking an educational loan should be Indian nationals
• Admission Letter from University: The student should have secured admission to a foreign university/institution
• Age Limit: Students' age should be older than 18 years.

Documents Required for Study Loan

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

• Scored Card: Mark sheets of the last qualifying examination for school and graduate studies in India
• Admission Letter: Proof of admission to the course
• An Estimate of Expenses: Scheduling of expenses for the course
• Scholarship Letter: Copies of the letter confirming the scholarship, if you have any.
• Photos: Two passport-size photographs
• Financial Documents: Bank statement for the last six months of the borrower.

Other than this, the bank may ask you for additional documents. 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

Student Loan Collateral

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 instalments

Study Loan Rate of Interest 

An education loan interest rate is the percentage charged by banks or NBFCs for borrowing money to finance your education.

• 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 the f RBI or the concerned bank.

Education Loan 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.

Read More: How to Repay Student Loans Faster?

Loan 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 approval 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.

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 the Cost of Studying in New Zealand

Contact India’s leading education loan providers through Shiksha Study Abroad for more queries. Do write to us in the comments below. Or request a call back from our Shiksha Study Abroad Counselling Services.