After getting through the B-School of your dream, the main concern that will start to rock your mind will be regarding the payment of the fees. While approaching the banks for education loans, an aspirant faces several queries.
In this exclusive interview with MBAUniverse.com, Mr. Harsh Roongta, CEO, Apnapaisa.com, talks about the several aspects which you should know while applying for education loan from banks.
Harsh Roongta is an alumnus of Institute of Chartered Accountants of India. Prior to joining Apnapaisa.com he worked as an Associate in ICICI Bank, Managing Director at Anik Financial Services Pvt. Ltd. and Business Head at ICICI Bank.
Excerpts from the interview:
Q: While pursuing for Education loan, what factors should a student keep in mind? What kinds of courses are covered in India and Abroad?
A: Education loans are provided for studying in India and abroad. There are some specific courses and programs for which you can get the education loan.
For studying in India, most graduate, post graduate and professional courses like engineering, medicine, veterinary, law, dentistry and management; programs from the institutes like Institute of Cost and Work Accountants of India, the Institute of Chartered Accountants of India, the Institute of Chartered Financial Analysts of India; courses recognized by the University Grants Commission, the All India Council for Technical Education, the government, the AIBMS, and the Indian Council for Medical Research and less conventional courses like biotechnology, fashion technology and aviation are offered loans. Banks are usually flexible in approving and disbursing such loans.
For studying abroad, programs like Undergraduate job-oriented professional or technical courses offered by reputed universities; Post-graduate courses like MCA, MBA, MS, etc. Post-graduate courses like MCA, MBA, MS, etc. and courses conducted by CIMA, London, CPA, USA, etc. are qualified for loans.
The factors you should keep in mind while pursuing education loan are:
Quantum of Loan offered by most banks is
- up to Rs. 10 lakh for studying in India
- up to Rs. 20 lakh for studying abroad
No collateral security required for loans up to Rs. 4 lakh. Co-obligation of Parents or Guardians required.
Margin:
- Up to Rs.4 lakh: Nil
- Above Rs.4 lakh: Studies in India: 5 per cent, Studies Abroad: 15 per cent
Loan tenure: Maximum loan tenure is seven years.
Moratorium Period is course period + 1 year or 6 months after getting job, whichever is earlier
Q: What is the procedure to apply for the loan?
A: The education loan process may vary from bank to bank but there are some fundamental steps.
Step 1: Fill in the loan application form
Step 2: Personal Discussion
Step 3: Provide validated supporting documents
Step 4: Stage of loan approval or denial
Step 5: Borrower's signature on a Promissory Note
Step 6: Disbursal of the loan
Online Applications
In the current times, availing an education loan has been made even easier. Now, one can apply for an education loan online. The loan will be sanctioned only in principal and the applicant will have to contact the bank for actual approval and disbursement of the education loan.
Q: Who can apply for the loan?
A: To be eligible for an education loan, the borrower should be an Indian within the age group of 16 to 26 years. The applicants’ parents or guardian should have a regular source of income so that they are able to repay the loan if the need arises. The applicant should have secured admission in any of the graduate or post-graduate courses offered by an institute which is recognized by UGC or AICTE.
Q: What are the points that a student should keep in mind while applying for loan?
A: The points which student applicants should keep in mind while applying for education loan are eligibility, qualification of the course, expenses covered by the loan and whether you would have to provide collateral or guarantor.
Q: How to choose a bank for taking Education Loans?
A: While choosing the bank for taking education loan, you should choose the bank on the basis of the factors like low Interest Rate, no prepayment penalty, minimum or no collateral required and flexible repayment options.
Stay tuned to MBAUniverse.com for more on financing your MBA.
