Ever since the concept of educational loans came into existence, pursuing ambitions has never been easier. So, if you're considering studying abroad don't hold yourself back due to lack of money. Let us find out more about education loans, eligibility criteria, the process of filling out an education loan form, documents required, etc.
Various universities offer scholarships but everyone cannot qualify for the same. This is why, many students depend on getting an education loan, which has currently become the primary source of obtaining funds to study abroad. Educational loans can be borrowed from banks and non-banking financial companies. The procedure to fill out the education loan application form can be smooth if the candidates have the necessary documents.
What is an Education Loan?
With the cost of education reaching the apex in both India and outside the nation, many students feel reluctant to apply to their target higher education institute. Every student aims to obtain a quality education but compromises due to the high cost of studying. Here is when an education loan comes in handy. This financial assistance is not just to pay one's tuition fee but offers many other benefits.
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An education loan is a student loan specifically meant for students who planning to pursue their higher education. These are usually offered by universities, financial institutions and government organisations and help students cover all their expenses concerned with their further studies. Students can apply for education loans to study both in India and abroad. These are offered by multiple banks as well at competitive prices so that students are able to afford what they think they deserve. Those who apply for these are not required to repay the same immediately as the amount repayment begins after months or a year of the programme completion. Also, every bank has its own interest rate.
Advantages of an Education Loan
Students as well as parents benefit a lot from an education loan. Students, because they are able to go abroad in order to pursue their dream course and parents because they see their children's dreams coming true. This highly sought-after financial assistance makes higher education more accessible for students, in a way helping them secure their future. Some of the many benefits of an education loan are listed below:
- Makes education affordable: Through an education loan, students are able to cover their expenses related to programme fees, textbooks, laptops, travelling, accommodation and much more, depending upon the bank. Due to this ease, one is able to study a programme of his/her choice at a selected institution without having to worry about the overall expenditure.
- Convenient repayment period: Flexible repayment term makes it convenient for the students to pay back the borrowed money. This is so because various features and options are available with the help of which students can customize their loan repayment timeline so that it suits their monetary circumstances. So there are many different education loans with flexible terms of repayment. You may even defer payments till after the end of your graduation. For this multiple repayment plans are available.
- Less rate of interest: Education loans which are funded or supported by the government usually have lower interest rates in comparison to the rest of the loan types. This makes them more attractive to students.
Students or borrowers should keep in mind that although education loans do have many advantages one needs to act responsibly while availing them. Before applying for an education loan you should see if you'll be able to repay it once your graduation is over. They may also choose options such as scholarships and grants in order to reduce the overall monetary burden.
Process to Fill Educational Loan Application Form
Check the steps to fill out the educational loan application form given below.
- Select the bank: Many public sector and private sector banks in India offer education loans to study abroad. Selecting a bank is the first step that one should consider before filling out the educational loan application form. Know the terms and conditions, rate of interest, and other formalities of the bank. The formalities may vary from bank to bank. In all, shortlist the banks and then decide from which bank the loan has to be taken.
- Know the details of the loan: Before filling out the educational loan application form, make sure to know each and every detail of the loan. This may include the terms and conditions, benefits, rate of interest, etc. Also, discuss the hidden charges, processing fees, and more from the bank executives.
- Cross-check the eligibility criteria: In order to get the loan approved, make sure to meet all the eligibility conditions. It is one of the crucial steps before filling out the education loan application form. Also, keep all the necessary documents ready.
- Apply for the education loan: Lastly, look out for the methods through which you can apply for the education loan. You can either apply online or visit one of the nearest bank branches to fill out the educational loan application form.
Note: Finances must not become a hurdle for students who wish to study abroad. Students can apply for educational loans to study abroad provided by leading lenders through Shiksha Study Abroad.
How to Fill Education Loan Application Form: Documents Required
Before the approval for an educational loan is given, the following documents have to be submitted to the bank:
- Photo id proof
- Address proof
- Proof of education
- Offer letter from the university to which you have applied
Documents of co-applicant
- Address proof
- Photo id proof
- Salary proof
- Bank statement
- Income tax return
- Proof of business
Points to Remember before Filling Educational Loan Application Form
The banks consider the following factors at the time of granting the educational loan to study abroad.
- The academic background and credentials such as grades, credits, etc of the candidates are considered
- The applicant should also be able to provide collateral for the loan
- Before selecting the bank, the applicant must read all the terms and conditions as well as the details mentioned on the educational loan application form
- The program of study should be accredited. The banks also want to know if there is a chance of landing a job abroad
There are a few other 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 follows –
- 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
Eligibility Conditions to Apply for an Educational Loan to Study Abroad
The eligibility criteria to apply for an education loan in order to study abroad may vary from bank to bank. However, some of the common eligibility conditions are given below:
- The candidates must have good academic records
- The candidates must be a citizen of India
- The candidates must have taken admission into a recognized foreign university or institute
- The candidates must be 18. If not, then his / her parents are required to avail of the loan
- Banks give preference to job-oriented courses, so the candidate must go for a technical or professional course
Related article: Things to know before applying for foreign education loan
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