Applying for Student Loan? Here’s all you need to know

The path to a brighter future is through education, and that path can become difficult for students with inadequate financial resources. If you have dreams of international education, you must have dwelled on the question of “How to fund my degree?”. If you are planning to apply to any university abroad, you have to deal with the question of finances first and foremost in the application process. Before you can secure your admission in any international university, you have to make certain that you have adequate funding.

If you are an aspirant of TOEFL and want to gain admission in an English-speaking university, being a non-native speaker from India, you must have dwelled on the question of funding. After you clear TOEFL and gain admission in an academic or professional institute, the question of funding becomes pertinent. You must be knowing that a majority of the student applications that get rejected from international universities is because of inadequacy of funding documents. You need to have sufficient proof of funds or requisite loan documents to make yourself eligible for admission.

There are many complications that students face while applying abroad. The language proficiency requirement is a major cause for concern for many. But more than anything else, the problem faced by most applications is finance. Here we will provide you with all details of student loans so that your application does not get rejected owing to inadequate financial funding. Read more to get a holistic idea about the complete process of financing your education through student loans. We will guide you through a step by step process for applying for student loans.

First of all, what are student loans?

These are loans which are offered to students who need financial aid to pursue their educational degree. You can apply for student loans to study within the country as well as abroad. Such loans allow you to attain a level of education which would otherwise be impossible, and you can pay back the amount when your situation has been improved by the education you receive through the loan.

You may encounter a shortage of funds that stands as an obstacle in your path of educational pursuit. An educational loan can be of utmost importance in such a scenario where it can make up for the shortage by providing you with the requisite amount.

What costs are covered by student loans?

The cost of tuition fees, relocation cost, books and stationery- all are covered within this loan. Related expenses of accommodation, travel, exams and other miscellaneous charges are also paid for the loan. Various kinds of courses in diverse subjects are covered by the loan. Be it a full time degree, part time degree, vocational course or diploma course, you can apply for a student loan.

Who can apply for student loans?

It is the student applicant who needs to borrow the money for education. A parent, sibling or spouse can be the co-applicant for the loan. Students studying in India as well as abroad are eligible for such loans. It is a must that you apply for the loan in India even if your bank has branches abroad.

What are the requirements for student loans?

Loans are offered by private lenders as well as banks. To be eligible for a student loan, you need to be a citizen of India. You need to show documents that you have secured admission in a recognized university. You will find that some lenders will be willing to loan you the money even before you secure admission. You also need to furnish documents proving that you have completed your higher secondary level education from a board recognized by the government. The Reserve Bank of India (RBI) does not prescribe any age limit for applying for student loans. However, specific banks may have age related guidelines.

You should be able to furnish certain documents while applying for the loan. Some important documents that you should keep ready at hand are as follows:

  • A copy of your passport
  • Proof of admission in any institution
  • Your previous marksheets
  • Salary slip of your co-signer

You will find that a few banks will be willing to lend you money even before you secure admission. That will be an added advantage for you. After you get the loan sanction, you can choose the institution according to the loan amount approved for you.

Who is a co-signer? Why do you need a co-signer for student loans?

The co-signer has a very important function in case of your student loan. You need a co-signer who will guarantee to pay back the borrowed amount to the bank in case you are unable to return the money. The co-signer will have furnish proof of his or her employment status and demonstrate that his or her salary meets the requirement of the bank. This is to provide the bank with a security that the money will be returned. You can make any of your parents or extended family members a co-signer to vouch for you.

Why should you apply for student loans? What are the advantages and benefits associated with it?

We understand that many students are hesitant about borrowing money for education. Of course, student loans are a huge commitment and it is quite obvious that you are not so sure about going through with it. However, we will allay your fears by successfully demonstrating to you that student loans are not as restrictive and pressurizing as you fear they are. Here are some of the benefits of student loans:

  • Student loans cover not just your tuition fees but more. Accommodation, relocation, cost of books etc will also be funded by the loan. It can help you achieve your dream of the best education.
  • The main concern for most students is the pressure of repayment. In this context, you must know that student loans do not need to be repaid till you complete your educational degree.
  • Student loans are offered at a lower interest rate than other loans and hence, they are quite affordable.
  • You may have options of deferred repayment and grace periods may be offered to you by the bank for repayment. Thus, as you can see, student loans are much more lenient than other loans.
  • The terms and conditions of student loans are not as restrictive as other loans.
  • You can also avail of subsidized student loans if you meet the required financial needs. These are loans where the government agrees to pay all the extra interest that accumulates as long as the student continues to be enrolled in the university.
  • Private lenders also offer various kinds of benefits and offers.
  • In addition, did you know that timely payment of your student loan will contribute to a good credit score in the long run?

Are you all set to pursue your educational dreams through student loans?

Here are some important tips that you should keep in mind while applying for student loans.

  • First and foremost, try to get a fair idea about the all inclusive expenses in the institution you are applying to. Make sure that you know not only about the academic expenses but also the non academic expenses too.
  • Wisely calculate the assets you and your family possess which can be liquidated in case you are unable to repay the borrowed amount.
  • Make yourself well acquainted with the bank charges. There are different kinds of processing charges which you should know from beforehand.
  • Apply for loans but do not stop searching for scholarships. These scholarships may not cover all your expenses but they can cover part of your expenses.
  • Keep your expenses in check. Do not throw away money. Spend only what you absolutely need.