The explosion in the number of Indian students studying abroad is no surprise to anyone observing trends in the education sector today. According to credible reports, education loans in India registered a significant 17% growth in the financial year 2023. Every Indian student who wishes to study abroad must understand when to apply for an education loan besides knowing all the application details. The loan application procedure is often a long-drawn and intricate process that students must meticulously plan for to ensure that it effectively facilitates their academic journey abroad.
When must a student apply for an education loan?
Students have two primary options when considering the timing for applying for a student loan: they can either apply for the loan after receiving admission to a university or choose to get the loan sanctioned before it.
Applying for an education loan after admission:
After receiving a university enrolment letter, a student has all the required documents to initiate an education loan application process. The application process for education loans can be time-consuming, often involving extensive paperwork and numerous approvals. Students should apply for loans well in advance to ensure they have the funds when the academic session begins.
Applying for an education loan before admission:
In this scenario, a student can approach a bank to get their education loan sanctioned before even applying to foreign universities. This approach can expedite the admission process, providing evidence of the student’s funding source in advance. It can also help secure admission, with universities requiring students to show proof of financial support during the application process. However, this approach carries certain risks. Students who cannot secure access to the desired course or university may have a loan approved without a clear academic objective. Therefore, it’s essential to exercise this option cautiously, ensuring that the selected universities are realistic and achievable.
Things to do now to apply for an education loan
Irrespective of the timing of the application, there are several essential steps that students should consider to ensure a smooth education loan application process.
1. Contacting a bank and applying for an education loan:
Students should begin by identifying a bank that offers education loans for studying abroad. Different banks have varying eligibility criteria, interest rates, and terms. They must be prepared to provide proof of admission and collateral if necessary. Education loan calculators can help students estimate the monthly EMI they must pay based on the loan amount, interest rate, and repayment tenure. This can help them budget for their education expenses and make informed decisions about their loan.
2. Using an education loan calculator and calculating one’s EMI in advance:
It’s crucial to understand the financial implications of an education loan. Students should use an education loan calculator to determine the EMI (Equated Monthly Installment) they must pay. This step allows students to plan their finances effectively and ensures that the loan is manageable within their budget. They can also plan their b repayments by using an online financial calculator.
3. Submitting the required documents:
A well-organized document submission process is vital to a successful loan application. Some required documents include proof of admission, academic records, income and identity proofs, and collateral documents, if applicable. Timely and complete submission of these documents will help expedite the loan approval process.
The decision of when to apply for an education loan is significant for any student aspiring to study abroad. While there are advantages to using before and after admission, careful planning and a comprehensive understanding of the loan process are essential. Students should also consider factors like the choice of bank, loan terms, and financial planning to ensure a smooth and successful academic journey overseas. By taking these steps, aspiring scholars can achieve their educational dreams and make the most of the opportunities available on the global stage.