Nowadays there is one standard price hike issue prevalent in universities all over the world. Hike in tuition fees is becoming very common among the different foreign universities and colleges. Students who wish to study abroad tend to step back due financial unaffordability. Therefore, there arises a need of going to any third party source to meet their financing needs. At this stage, educational loans to study abroad come into play. These educational loans act as a cushion for studying abroad for many students. You can find various educational loan schemes on the Student Cover website. This website offers various loan schemes which are helpful in selecting the type of loan suited your needs and financial & academic profile. Now the question arises, how to get the loan for study abroad? Before going for any loan, you should know what an educational loan covers.
Coverage Areas of Educational Loan
- Tuition Fees: Basically, getting an education in today’s time is very expensive. Therefore, the first thing it covers is your tuition fees.
- Book and supplies costs: Further, the education loan will financially help the students to get the books and other supplies required.
- Room and board fees: Also, this loan will take care of every problem of the student studying abroad. This also includes the room and board charges.
- Transportation fees: Traveling expenses are also covered in this educational loan. Therefore, there is no need of taking any particular for covering such costs.
- Health Insurance Fees: These loans for studying in abroad also caring for the safety of students pursuing their studies in abroad.
Selection of the source of funds
Once you get the offer letter or admit from any foreign university in which you wish to continue your higher studies; then the first step is to get the education loan to meet all your expenses. In some cases you can always apply for a loan before getting an admit just to check how much amount of loan you are eligible for. There are two sources of getting an education loan, one is from a public or private sector bank and another from a non-banking financial companies(NBFCs) which gives education loans the same way the banks give. You can choose either of the two source depending upon major factors such as: type of loan(secured or unsecured), loan amount, ROI, services among others.
Selection of the source is a significant step while going for any kind of education loan. Although, ROI remains the most important factor as the repayment of the loan is mandatory and can be the most difficult part, you should not always go for a source which offers the lowest rate of interest but also the factors should be considered after which you should choose the source which is best suiting your needs. Suppose you chose a bank or NBFC which gives the lowest ROI but the loan amount offered does not suffice the required amount or a collateral is asked for the desired loan amount then that loan scheme does not suit your overall needs.
Selecting or shortlisting a loan scheme from Banks or NBFCs is only a one side of the coin. The other side is the validation or agreement of the Bank or NBFC to consider you eligible for the education loan. You should always check whether the course you are going for is recognized by the shortlisted loan-giving firm or the academic and financial profile of the applicant and co-applicant are enough convincing etc. Also, some offer exclusive educational loans for the long-term courses, and they ignore the short-term vocational courses. Therefore, there is need to check if the course is eligible for the loan in the eyes of the loan giving company.
There is a requirement of the co-applicant mainly in case of unsecured loan exceeding Rs. 5 – 10 Lakhs. The role of co-applicant is that in the event of any problem in repayment, he will be responsible. Mostly parents act as a co-applicant for the students who sign the loan with them. In case the student fails to repay the loan, he/she will cover repay the loan on main applicant’s behalf.