India is a land of opportunities and young people can grab these opportunities with proper education especially higher education. Gone are the days when a graduation would suffice. Today, you require higher education and there is no dearth of higher education courses in the country. Every conceivable discipline from literature to linguistics, from engineering to oceanography, from pure science to applied science, from commerce to management and from finance to accounting has a specialized course for students to pursue their interests.
Today, the world of finance is an attractive discipline grabbing the attention of students who have completed their MBAs or worked in organizations with some finance background. Among the finance courses, a chartered financial analyst (CFA) is a popular certification to possess to make a career in the finance industry. CFAs obtain jobs as financial strategists, advisors, fund managers and portfolio managers. The jobs are well paying and satisfying.
To become a CFA, students have to undergo deep understanding of various aspects of finance. They have to pass three levels of exams before they become a CFA. In order to prepare for the exams, they need to study the subjects thoroughly. Various institutes offer these courses, obviously at a cost not easily met by students with modest means.
Peter is a post-graduate in commerce intending to enrol in the CFA program offered by a leading institute in India and abroad. He is unable to meet the Rs 11 lakh expenses needed to prepare for the three-level exams. He decides to find out if there are loans available for such courses. He finds to his pleasant surprise that most banks and NBFCs offer education loans under whose umbrella the CFA course he intends to pursue also features.
He finds that to enable students to pursue their interest, many financial institutions including NBFCs such as Tata Capital offer education loans under which the CFA course also figures. These loans come under regulation of the government with benefits such as
- Low-personal loan interest rate – PLR plus up to 1 percent extra
- Repayment to commence one year after completion of study or securing a job whichever occurs earlier
- Simple interest during the period under study
- Tax benefits for interest payment and repayment of principal
Each of these lenders has its own terms and conditions. Most institutes offering CFA programs have tie-ups with lenders to facilitate the loan process. Peter finds out that education loans are easy to obtain with minimal formalities of submitting documents such as
- Admission letter from recognized institute either in India or abroad
- Statement of estimate of expenses including tuition fees and other costs associated with training with supporting documents
- KYC documents
- Educational qualification documents
- Credit score
He also finds out that
- There is no collateral if loan is less than Rs 4 lakh
- No margin if loan is less than Rs 4 lakh
- Parents can become co-applicants
- Maximum loan amount is Rs 15 lakh if studying in India or Rs 30 lakh if studying abroad
- He can take the loan in 3 instalments coinciding with each exam – there is no need to take the entire amount in one go
Lenders consider the following before granting a loan
- Recognition to the education institute
- All costs attributable to study including tuition fees, computer time, books, hostel stay, food and other such costs
- Post studies, the student’s earning potential
- Past record of student
- Creditworthiness of student and co-applicant
- Collateral security – property, FDs, insurance policies
- Choice of repayment options
- KYC documents of student and co-applicant
Peter is upbeat with the information he has gathered and proceeds to collect all the documents needed to apply for the education loan. He is only apprehensive about the collateral security if the loan exceeds Rs 4 lakh. But, he need not worry as some of the lenders offer limits higher than Rs 4 lakh and also consider other factors supporting his creditworthiness such as
- Insurance policies with surrender value
- High credit score
- Past relationship with the lender
- No default on any repayment of loan
- Prompt repayment of EMIs on other loans, if taken
He is now certain of realizing his dream of becoming a CFA by availing the loan. He is confident that he will pass all the three exams and secure a good job through which he hopes to repay the loan completely well ahead of time.
We at Tata Capital invite students such as Peter to avail our education loan. We offer these loans under personal loan category with simple and hassle-free processes comprising quick approval and disbursement. What is more, we offer you a no-collateral education loan if your credentials are excellent.