When to apply for an education loan?

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Ahsaas Verma

Updated on Apr 30, 2021

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It can be a daunting task to plan your education abroad. Especially planning ‘How to finance your study abroad?’  Let us warn you that studying abroad is not at all cheap. Deciding the right timeline for loan application can be complicated. Don’t Worry! We are here for you. We will help you in getting the right loan and the rate of interest. No doubt that this needs a lot of research work to be done. Therefore, to help you with your higher education loan application we have listed down a few Frequently Asked Questions.

1. When is the right time to apply for an education loan in India for study abroad - before you receive your admit or after? (For USA, Canada and other countries)

It’s one among those life questions where even google can’t guide you properly but we’ve cracked it. Most students / parents are often faced with this situation; as to what process needs to be tackled first – the admission or the education loan? Most banks require an admit before sanctioning your education loan i.e. granting the approval letter. Also, most of the universities prefer students with assured funding. Many universities do not grant much time for tuition fee payment post rolling out the admits, which often leaves very little time for loan application and processing. Hence, making you run around for the funds at the last minute. However, with Education Loan providers like InCred, HDFC - Credila and Avanse they allow you to process and sanction the loan even before you receive an admit. You can apply to these loan providers via Yocket Loan Assistance.

With this hassle-free process, it allows students and parents to know of their loan eligibility in advance.

Advantages of early application -

  • When there is fund assurance the chances for getting admission to your dream university increases.
  • Allows you to know your loan eligibility in advance.
  • The most preferred way to declare 'Assured Funds to Universities'
  • Loan Sanction letter has better acceptance over the solvency letter.
  • Assures no last minute issues especially during Visa / fee payment time.

 

2. Why should I apply for an education loan before receiving an admit? (USA, Canada and Rest other countries)

Every student aspires to join a certain university and course. However, many them just drop the idea of pursuing the course in a certain country or in a certain university due to lack of funds needed to pay for the higher education.

At Yocket, we assist you choosing the impeccable loan provider suited for your needs. This enables the students to pursue their dreams by making the funds easily available to them even before they start applying to the universities. When you are well aware of the funds that you can get even before you start university application process, you don't have to downsize their dreams!

Also, be assured that our partnered NBFC (Non Banking Financial Company) providers will offer you the sanction letter before you receive an admit. This helps applicants in getting favourable response while applying for I-20s as some Universities prefer solvency along with the application form. Secondly, you will know your eligibility right away so that you can plan your finances accordingly.

To get admission to the US Universities and inorder to get I-20 for US Visa, Availability of Liquid Funds to complete the course needs to be demonstrated. Our loan advisers will help you out with Education Loan Sanction Letter before admission so that you have enough of liquid funds available.

 

3. Why should I get loan sanctioned before admission?

  • It’s a preferred way to declare 'Assured Funds to Universities'
  • Better acceptance of the sanction letter over the solvency letter.
  • Increase your chances of getting admission to your dream college.
  • No last minute surprises specially during Visa time.
  • Know your loan eligibility in advance.
  • Quick and hassle free process to get a sanction letter.

 

4. Am I eligible to apply for an education loan before receiving an admit?

Yes. You can apply for an education loan in india for study abroad before receiving an admit from any University. You can check your eligibility on Yocket Loan Assistance. If your case is approved, you will get a conditional loan sanction letter. This helps many students get confidence that their funds can come from the sought financial sources. Students and parents feel confident to apply for better universities, without worrying about how to fund the education abroad.

 

5. Who is eligible to apply for an education loan and why should one apply?

Usually, middle-income group people opt for an education loans. They apply due to following reasons -

  • Rapidly rising costs of education.
  • Income tax benefit under section 80E of IT act.
  • Students wanting to take their own financial responsibilities to preserve the parents savings and build positive credit history.
  • Even affluent families are going for education loan because they don’t want to block the huge amount that can be reinvested somewhere else.

 

6. Is collateral needed for an education loan?

While student loan criteria in India is quite uniform, Collateral requirement depends on various factors such as -

  • The course selected
  • The university chosen
  • Cost of completing the course
  • Scholarship received

Yocket is a student community. We have a vision where no student is deprived of pursuing their higher education due to lack of funds. Therefore, we have partnered with various banks, NBFC’s (Non-Banking Financial Company) and other lenders as well to help students. Generally banks will always demand something as collateral from you which should be parallel in valuation with the Loan Amount. With Yocket, you can get your loan sanctioned without collateral.

 

7. Which bank should I choose for funding my education?

  • In general, all banks offer a competitive rate of interest on education loan. So how do you select the right bank for youself? Well every bank has its own pros and cons. So reseach a lot and thoroughtly!

  • Most of the banks need something as collateral for education loan. This can be a burden on a you if you are unable to provide a collateral and are just one step away from your dream university.

  • Also, banks demand a huge percentage of margin money from students, which generally revolves around 10% to 25% of the total loan amount. For many families it can be a troublesome considering the high cost of education.

  • Next follows speed at which the banks process your education loan. Sometimes there can be a delay in the process for successful sanctioning of your loan which in return can waste your valuable time. We recommend you to go for services offered from private lenders and NBFC’s as their process is faster and they give quick decisions. Therefore, there no harm in exploring options.

 

8. Should I go for multiple loan providers?

It is very necessary to get a low rate of interest on your loan amount as once you start repaying it, you will realise that even 1% of difference can sum upto lacs when the repayment tenure starts. Getting an education loan that suits your profile the best along with low rate of interest can be all confusing but it is easy with Yocket Loan Assistance. Our loan advisers will help you with the best education loan based on your profile. We always recommend our students to apply for at least 3 financial institutions for the best education loan. When you apply to multiple loan providers, only then can you compare the interest rates; and decide which suits you the best.

 

9. Education loans for premier foreign universities draw low rate of interest?

It is indeed natural that premier foreign universities provide for better employment opportunities. Hence, lesser risk for the education loan lending institution which results in a low interest rate offering.

 

10. What is the eligibility criteria for an education loan?

Lending organizations decide loan eligibility on the basis of -

  • The past academic strength of the student.
  • Future employment prospects.
  • University and course that you have applied to.
  • Co-borrower's financial standing is also considered in the evaluation process.

 

11. Do I need to produce a co-borrower / guarantor for an education loan?

Generally students do not have a source of income, so they take the support of a co-borrower or guarantor for their loan application. A co-borrower/ guarantor mitigates the risk for the loan provider giving you the loan.

 

12. Who can be a co-borrower / guarantor?

Your parents / sibling / close relative can be your co-borrower during your loan application.

 

13. Documents needed for education loan application?

  • KYC documents
  • Academic documents
  • Admit (optional)
  • Financial documents of your co-applicant (generally parents)

However, following a detailed evaluation of your case by any financial organization might need a few more documents.

 

14. What is the current interest rate for education loan in India?

Education loan interest varies from case-to-case based on student profile. Generally it ranges from 9.85 per cent to 14 per cent.

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