5 Things To Know Before Applying for Study Abroad Loans In India
Wanting to study abroad is a huge dream to have which often comes with a lot of requirements and responsibilities. Unless you have a really hefty bank account, this might also stress you out financially.
Opting for a bank loan is a smart choice that most Indian students prefer. Bank loans are reliable but that doesn't mean they are easy to acquire.
Getting your loan request approved is an extensive process for which you'll need a lot of documentation and demands met. Here are a few things to keep in mind before applying for an education loan.
1. Eligibility Criteria
Banks prefer students with strong academic records and those who have their admissions confirmed to a professional or technical course.
Needless to say that you should be an Indian national with proof of residence and more than 18 years of age in order to have the loan in your name.
Opting for courses that are state-approved and job-oriented is an added advantage. Because this way, the bank knows for sure that you will have the means to pay your loan back immediately after course completion.
2. The Maximum Loan Amount To Expect
While applying for an educational loan, the bank doesn't offer you the entire amount that you'll need for the course.
Instead, study abroad loans only cover about 80% of your overall expense and the rest is what's called the "Margin Amount".
This margin amount is what you will pay from your own funds. The greater your loan requirement is, the great is going to be your margin amount.
3. Processing Fee & Proof Of Security
While not every bank will charge you with the processing fee, most ones do. This fee will usually be a small percentage (1%) from your overall loan amount. This is an additional amount that you have to pay apart from your margin amount.
Any loan more than 5 lakhs will require a guarantor who needs to sign the document on your behalf. If your quote is more than 10 lakhs, banks would require proof of security such as fixed deposits, immovable property or RBI bonds.
Failing to pay back the loan or the interest on time will force the bank to acquire them in exchange for the money.
4. The Documents That You Need To Possess
While applying for study abroad loans, the first document any bank would ask for is your acceptance letter that's been sent by your University.
Your college will also provide you with financial documents that'll have a clear list of all the expenses (for a year).
You have to submit your mark sheets to show proof of your academic track record. Each bank has its own set of requirements that you have to check in advance.
In some cases, your parents need to submit their proof of income if there’s any discrepancy in your documents.
5. Initiating Repayment
Most banks will allow you to start repaying the loan after the completion of your course period. Once you land a job, you need to start paying your loan back immediately upon completion of your first month.
If you fail to secure a job even after your course completion, you still have to initiate repayments whatsoever. Failing to do so will call for additional penalties that get added to your loan.
Conclusion
The total time that you can take to repay your loan varies from one bank to the other. As long as you pay your monthly interest on time, you should be fine.
But once you exceed your limit, the bank might acquire the assets that you've submitted. Taking up study abroad loans might seem riskier from the outside but it's going to steer you towards your dream, making it totally worth it.
Approach the bank and get all the details to get a clear picture. Hope this blog post helped you get a fair knowledge about study abroad loans.
Do you want to know more education loans for studying abroad? Feel free to get in touch with our team of experts. Planet Education has so far helped 35,000+ students to study abroad, we can help you as well.