You are a student and have a strong desire of studying abroad. But you have no money. Then, how can you fulfill your dream? You can do so by taking an educational loan from any bank. Almost all government and private banks are giving educational loans to students. Interest rates may be slightly different from one bank to another. But all banks adopt the same rules for giving educational loans.
One should not think that one can go abroad and earn the amount needed for paying tuition fee and cost of living there itself. They should not think that money needed for the flight ticket is enough and all other expenses arrange for themselves after landing in that country. All students have to keep in mind that scholarship of any kind is not enough to bear all expenses at any university abroad and so taking an educational loan is prudent.
Loan to what extent...?
An educational loan given by any bank generally covers all kinds of expenses like tuition fee, examination fee, library, laboratory, hostel accommodation, books, equipment, instruments, uniform, flight or other travel expenses, caution money, project work and study tour. Getting this kind of loan is easier if anyone gets an admission to any reputed educational institution. One can get this loan only for full time courses like degree, PG and PG diploma.
For an educational loan upto Rs.4 lakhs, surety is not needed. But, either parents or life partner has to be a co-applicant for those loans. But, the surety of another person is needed for the educational loans between Rs.4 lakhs and Rs.7.5 lakhs. If anyone wants an educational loan above Rs.7.5 lakhs, the banks may ask for documents of fixed assets. Similarly, an LIC policy on the name of the student is also needed. For the educational loan above Rs.4 lakhs, 15 percent of the amount of loan has to be deposited at the respective bank as the margin money.
After getting a job
After six months of the course completion, paying back the loan amount in installments has to be started by the student. However, some banks are giving students the facility of paying back the loan only after getting a job. If a student fails to pay back the loan, the banks start the process of getting the loan amount back from the person who had given the surety. While sanctioning the loan, the banks take into account the issues like reputation of the educational institution, its rank at the international level, employment opportunities after the course completion, chances of student paying back the loan and other related issues.
Which is the best bank for getting the loan?
The interest rate is lower in government banks than in private banks. One can choose a bank after knowing the interest rate and other rules the banks insist on. The experts advise the students to apply in many banks for getting an educational loan so that they can surely get a bank loan, to start with.
For the educational loans upto Rs.20 lakhs, Bank of Baroda is imposing an annual interest rate of 12 percent. Canara Bank has the same interest rate. At Axis Bank, a private bank, the interest rate is 13.75 percent, while HDFC Bank has the interest rate of 13.5 percent. ICICI Bank has the interest rate of 15 percent. However, one has to keep in mind that all banks change these interest rates very frequently. The interest rate that is existing at the time of taking the loan are applicable for the entire term. One can know the latest figure from the websites of the respective bank.
Marks sheet of the last course, admission certificate from any foreign educational institution (I 20 in case of American universities), statement of expected cost of course completion, bank account statement, residence certificate, identity proof, statements of properties and debts and others may be required to show the bank officials for getting the loan. The students are advised to go through the rules of sanctioning educational rules of different banks before applying for the same. They have to know compulsorily from the bank like time period, interest rate, time of paying back the loan, chances of paying back the loan amount only after getting the job and other details so that they will not have trouble later.