Pursuing higher education abroad is a roller-coaster ride with a lot of important aspects to consider and major decision-making. Among the many challenges that you might encounter, one huge challenge that often comes is financial uncertainties. While taking an education loan to fund overseas education is undoubtedly the most preferred choice, aspiring students are often baffled by the complexities of obtaining an education loan. From the intricate application process to understanding eligibility criteria and repayment structures, the procedure for securing an overseas education loan can seem complex for loan applicants and their parents.
Since taking an education loan involves multiple steps, we understand the state of confusion and numerous questions that can come to your mind. In this era of digitalization, loan applicants often turn towards Google to get their doubts cleared. So, to clear the air of doubts and help you make an informed decision ahead, we have enlisted the ten most frequently searched questions on Google regarding overseas education loans.
To ease this loan application process, ELAN’s Overseas Education Loan Advisors will address the concerns that often linger in the minds of loan applicants about how to get education loan for abroad studies. So, without any further ado, let’s get the answers to what everyone’s searching for!
What is the Process of Taking an Overseas Education Loan?
Answer- Taking an overseas education loan involves several steps. Initially, one must research and shortlist lending banks or financial institutions that provide overseas education loans. Subsequently, enquire about their eligibility and the types of loans available for them. Then complete the loan application form carefully and provide accurate details about the course, university, and financial requirements. Supporting documents like admission details, financial records, and collateral details (if applicable) should also be submitted.
The loan application is then evaluated based on academic records, the credibility of the institution, and the applicant's financial background. Once approved and sanctioned, the loan is disbursed in parts or as a lump sum directly to the educational institution or the student, depending on the terms of the loan agreement.
What are the Eligibility Criteria to Apply for an Overseas Education Loan?
Answer- Eligibility criteria vary among lenders but generally revolve around academic performance, acceptance into recognised institutions abroad, co-borrower or guarantor’s financial status, collateral, and the applicant's financial stability. A strong academic record, a clear academic plan, and a secure financial background significantly strengthen the education loan approval prospect.
What Kind of Expenses are Covered in an Overseas Education Loan?
Answer- Generally, education loans for international studies cover tuition fees, accommodation expenses, travel costs, examination fees, and other related study expenses. However, the extent of coverage may differ among lenders. Some financial institutions may also include expenses for books, study materials, and insurance.
What is the Moratorium Period and Grace Period?
Answer- These terminologies might be new to you, but they are two important concepts in education loans that cause major confusion. The moratorium period aligns with the course duration and a few months thereafter. During this period, the student is reprieved from making loan repayments. However, some financial institutions require the loan applicants to pay partial or simple interest during this period.
Talking about the grace period is the window following the moratorium that provides borrowers with time to secure employment before commencing loan repayments. Variations exist among lenders, with some offering flexibility in determining these periods based on the borrower's conditions and profile.
My Parents don’t have any Property or Assets to Pledge as Collateral Security, can I still get an Overseas Education Loan?
Answer- This is the most common challenge that most loan applicants face, but the good news is that you can take a non collateral education loan for abroad. Several banks and financial institutions offer non collateral or unsecured education loans based on the applicant's academic background and creditworthiness. However, unsecured loans often have higher interest rates compared to loans secured with collateral.
Can I get an Education Loan Without a Co-borrower?
Answer- Yes, some financial lenders like International Lenders and NBFCs provide loans without a co-borrower or loan guarantor. However, having one, especially with a strong financial background can significantly enhance the chances of loan approval and secure more favourable terms.
How do I get the Lowest Interest Rates for my Overseas Education Loan?
Answer- Getting lower interest rates involves several factors. A commendable academic record, admission to a reputable institution, pledging collateral security, and choosing lenders with student-friendly policies contribute to obtaining lower interest rates. Additionally, some institutions provide interest rate concessions for female applicants or those pursuing specific courses.
What will be the Next Step After the Education Loan Sanction?
Answer- Once the loan is sanctioned, thoroughly review the terms and conditions mentioned in your loan sanction letter. If you agree to these terms sign the loan agreement and complete any pending formalities. Upon completion of this process, the disbursement process will commence, and the amount will reach the specified account.
Is it Possible to Repay the Student Loan within the Loan Tenure?
Answer- Yes, repaying the loan within the tenure is feasible by carefully making timely EMIs (Equated Monthly Instalments). Making additional payments apart from the monthly EMIs will help you speed up your repayment process and minimise the interest incurred. Many lenders also offer loan prepayment options without any penalties. So, you can pay back and close your education loan way before your loan tenure.
What will be the Consequences of Delays in Loan Repayment?
Answer- Delays in loan repayment can lead to penalties, additional interest charges, and a negative impact on credit scores. So, avoid missing your EMIs and communicate with the lender if you face any financial hardships. You can also explore loan restructuring options and repayment plans to mitigate these adverse consequences.
These are the common solutions to the most asked question on Google. Since every financial profile is different, we encourage you to talk to our loan advisors for personalised foreign education loan guidance and assistance.
Taking an education loan for international studies requires clarity, comprehension, and a structured approach. Team ELAN will provide comprehensive knowledge and guidance so that you can make informed decisions.
It’s time to let go of the uncertainties and apprehensions associated with procuring an overseas education loan. Walk into our office or schedule an online counselling session with our team today!
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