The education loan has become an important tool for students to realize their study abroad dreams. Gone are the days when securing a student education loan was a tumultuous experience; which meant borrowing from family, friends and unscrupulous jewellers.
In the current set-up, if you have someone who will be a guarantor for your loan and you have proper documentation, you are assured of an education loan. This article aims to dispel some of the popular myths that surround education loans and also offers some tips on how you can be assured of securing an education loan to fund your studies.
Myth 1: My grades aren’t exactly top-notch; so I won’t get an education loan!
This is one of the top myths that students always worry about; they feel that their scores aren’t good enough to allow them to secure an education loan. As long as you have someone to stand guarantee for your loan and you have a confirmed admission; you are eligible for an education loan.
Myth 2: I topped my class - I don’t have to worry about securing an education loan!
OK, you might have topped your class, been the most popular student in class and been the teachers’ pet; but all this does not guarantee you a confirmed education loan. Top-notch scores ensure that you may get admission into a course and institution of your liking; but do not ensure you get an education loan. For that the bank should be convinced that you have a strong guarantor who will repay your loan on time and that all your documents are in order.
Essentially, the bank does not discriminate between top-scorers and average students. As long as the student demonstrates an inclination to learn and is earnest about repaying the loan; banks treat all applications with the same care and respect.
Myth 3: I have secured admission at Harvard - so I am getting a loan at a discount!
Congrats on securing admission in a premier institution - it may be Harvard, Oxford, MIT or any of the Top-100 Universities in the world. Your admission to a premier institution is testimony to your academic calibre and your talents. But if you think that this will let you get a discount while repaying your education loan; sorry - nothing of that sort is going to happen!
Myth 4: I have secured a loan so I won’t be eligible for a scholarship!
Your education loan sanctioned by the bank is independent of any scholarships that you may choose to apply. Scholarships are sanctioned by the government, universities and private trusts and companies; so if you are eligible for a scholarship; do apply! Every extra dollar or pound that you secure as a scholarship amount will reduce the burden on your education loan.
Myth 5: Studying abroad is too expensive for even a bank to sponsor my studies!
Most banks offer students education loans of up to Rs 10 lakhs to Rs 15 lakhs; this is a sizeable sum of money; so you should plan your tuition and living costs accordingly and apply to an institution, which will offer you quality education within your budget.
Some Tips for Reference:
- Visit multiple banks and scout for the best deal.
- Do not contact touts and commission agents who may promise you loans for a ‘cut’.
- The banking process is pretty transparent; keep your documents properly and apply for a loan.
- Ensure that you secure the conditional offer of admission before approaching banks.
- Ensure that your guarantor’s financial documents are proper.
- Most importantly remember that the loan has to be repaid; so study and work towards repaying the loan!
- Also apply for scholarships if you are eligible to apply for them.
We hope that you found this article useful and now have a clearer understanding about education loans. Also read our other article on ‘Guidelines to note when applying for education loans.’ With all leading banks having detailed websites now; please visit them to get a clearer understanding of the prevailing interest rates, loan eligibility details and repayment period.