Taking an education loan to study abroad is a decision that should be made carefully. It is a smart decision, and can open the door to many opportunities. However, it could turn out to be a less-than-fruitful affair if you do not follow the right procedures and make suitable choices. The good news is that understanding education loans is easy, and with a little research you can find all the information you need to ease any concerns.
Listed below are some of the most common concerns people have while taking an education loan to fund an international academic course:
Are you eligible to apply for an education loan?
To find this out, you need to first zero in on banks that cover your choice of course. Banks usually do not offer loans for short-term or vocational courses. However, if a reputable international institute has accepted your application, your chances of getting a loan increases. In this case, conduct extensive research on the kind of personal loans for education being offered.List down institutes that provide loans for your choice of course. Check if you need a co-signer, or collateral for your loan.
Can you cover your expenses?
Remember that you have to pay the bank a marginal sum if your loan amount exceeds Rs. 4 lakhs. If the loan exceeds Rs. 5 lakhs, you need a co-signer, and you would require collateral if it exceeds Rs. 7.5 lakh. Make an estimate of your expenses. Remember, the amount you apply for may not be the amount you get. Check whether your preferred educational institution has tie-ups with banks or lenders, and find out if they offer any concessions for international students.
Where should you apply for the loan?
The best way to find a suitable lender is to research various options on the internet. Compare personal loan interest rates offered to you, and check the repayment options or clauses of various banks and lending entities. Look for a loan that meets all your needs without it stretching your finances. It is also important that you look into the expenses that these banks cover. These could include tuition fees, travel, living and equipment expenses, among other needs.
What is the process of applying for a loan?
Applying for any loan involves a lot of documentation. There is often a list of documents required by lending institutions to process the loan. It usually includes identity proof, address proof, and signature proof. Be meticulous and follow the list and instructions correctly. Most lending entities help with documentation concerns if you approach them. It is also important to go through the fine print of the agreement before signing it.
How will you repay the loan?
A repayment period clause is part of your agreement with the lender. It gives you a moratorium period before you have to start paying your EMIs. This gives you the chance to get a job first. If you cannot find a job, the lender may extend the pay-off period based on your relationship with them. But, it would be wise to talk to your lender about your repayment options. However, remember to do this while applying for the loan as not all banks will defer loans. This is only done under exceptional circumstances.
The bottom line
Once you have checked your eligibility and have all your documents in order, getting an education loan should be relatively easy. With some research, you should be able to zero in on a loan that is ideal for you. But, keep the above-mentioned points in mind. They can help you get through your loan process.