Specifically Education Loan… 📘💰
This is the most specific part of those who belong from a middle-class background🙇 and are looking to go for an M.B.A or their higher studies.🙍
You see, MBA has become like a king for students/graduates or who are looking to upgrade their careers and those who want a great earning job.😇
An MBA, that is not just on papers but actually has real worth. So for that, we all know that it becomes necessary for ourselves in the topmost colleges.🙆
Also if I talk about studying abroad and to go outside India and pursue your MBA or any other higher studies can be really a life-changing decision.🙇
But it’s not that easy! 🙅Those who are seriously wanting to study abroad/in India can find it difficult to arrange funds.💰
Students/Graduates or anyone looking to pursue an MBA, generally dream about getting admissions in top best colleges.😇
Yes! It’s a dream.😇
But remember, dreams have value and without that value, you yourself cant achieve your dreams.💁
”Now if I say, My dream is to have a Lamborghini. But if I don’t have money to buy it. Will anyone give me?😕
LOL!!! A BIG NO!…🙅
So my question is…
“You want to do an MBA, right! You are preparing for it and you very well know that the tuition fee charged for the top colleges are very high. On average, 15-25 Lakhs is the total spent if you are looking for a good MBA in India. And for middle-class people, it is difficult to poke out such an amount as they have other expenses as well.”
Unless you have any good family inheritance or any big shot to scholarships or any jackpot, it is very unlikely that you could go for the ‘Best MBA!’
So what will you do? Will, you do not do an MBA?😳 Or quit?😳 Or would you search out for ways to solve and get financial aid?🙍
After the GD/PI rounds and results get announced when all the and legal formalities such as offer letters from top B-schools are into your inbox, many MBA aspirant back out just because of heavy investment fees of the top B-schools.
It happens, Really!😥
“One case –
Aman, whose father left him when he was a child. So, Aman in a great desire to pursue an MBA from a top-notch college just wondered about how would he manage to afford all his expenses without having any back-support?
Interestingly, Aman got many calls from B-schools, but his mind was in thoughts that whether he should do MBA as he was lacking funds!!
Thanks to his best friend who told him about education loans offered by banks and financial institutions which helped him to get the financial aid throughout his course.”
What is the eligibility criteria to apply for an education loan?
To apply for an education loan first need you have to look upon is whether are you eligible or not?
Here are general criteria listed at which India banks undergo to check the eligibility of the loan applicant –
– The student shall be an India’s citizen.
– The student should have attained the age of 18 else his/her parents will have to take the loan.
– The student must have great academic records.
– The student must have secured admission at a recognised foreign university/institution/college.
– Some additional documents – admission letter of the institution, fee structure, marksheets(class X, XII and graduation if applicable). Along with it, banks may also require your income documents such as salary slips or income tax returns(ITR) of the co-applicant.
– The desired course for which the student is going to study shall be technical or professional one, as banks give preference to job oriented courses.
What Are The Documents Required?
STUDY IN ABROAD
STUDY IN INDIA
|1. Proof of admission to the course||1. Identity proof|
|2. Schedule of expenses for the |
|2. Age proof|
|3. Copy of letter confirming scholarship, if|
|3. Signature proof|
|4. Mark sheet for last qualifying examination |
for school and graduate studies in India
|4. SSC,HSC or Graduation |
mark sheets whatever
|5. Copy of Foreign Exchange permit ( if available)||5. Age proof|
|6. Two passport size photographs||6. Residential proof|
|7. Statement of borrowers bank account for |
last six months.
|8. Income Tax assessment order not older than two years||8. |
Application Form and Photographs
|9. Brief statement of Borrowers Assets and|
|9. Income Documents of parents/guardian|
|10. If not a customer of the lending bank provide proof of identity and residence||10. Collaterals in the form of Immovable Property/Fixed Deposits .|
What Are The Steps To Apply For An MBA Education Loan?
Now, applying a loan has become so easy. All thanks to Internet technology and Digital India.
You can apply for an education loan from anywhere in the country. Also within just a click, you can apply for a loan from your bank’s application or from net banking.
The process is very simple –
Step – 1. The student has to go through the education loan application form and fill it.
Step – 2. Then the bank will take follow up with students and ask some questions.
Step – 3. A representative of the bank will take a visit to the student’s house and collect the signed application form with the supporting documents.
Step – 4. Then the student will have to provide completed education loan application form with all the required supporting documents.
Step – 5. Then after all this, the credit team from the bank will review and underwrite the education loan application.
Step – 6. The bank will then approve the education loan or also might ask for any additional information required from the student’s end.
Step- 7. Once the student’s signature is acquired on the education loan agreement, all the loan disbursement formalities are completed.
Step – 8. The education loan amount is deposited in the student’s or institute’s bank account electronically (whichever is required).
What are the Expenses covered under MBA Education Loan?
In an MBA course, apart from tuition fees, there are many other expenses are also there being encountered by the student. Interesting part!Almost, an education loan covers 100% of the basic course fee. Generally, the bank may also cover other related expenses while granting a loan, like:
- College Tuition fees and Hostel Accommodation fees.
- Library, Examination and Laboratory fee
- Books, instruments, equipment and other study material
- Building fund, Refundable deposit, Caution deposit supported by Institution bills or receipts.
- Travel expenses, passage money for studies abroad.
- Purchase of Laptops, computers.
- Any other expenses required to complete the course- like project work, thesis study tours etc.
- Even the cost of a two-wheeler is covered as part of an education loan by some leading banks.
MBA Education Loan financing and collateral requirement
If you compare the fees of the top colleges in India, you will see that on an average an MBA college and expenses range between Rs. 12- 24 lakh whereas overseas its Rs. 20 – 70 lakh or more depends on the country and rankings of the colleges.
Banks or financial institutions generally can finance up to 100% of the loan depending on the amount required. There is no money margin required for loans up to Rs. 4 lakh.
No collateral security or any third party guarantee is required for loan up to Rs. 4 lakh.
If you desire to study in India, then 5% of the required money has to be financed by the applicant.
If you desire to study overseas, then 15% of the required money has to be financed by the applicant.
For loans which are above Rs. 7.5 Lakh, banks usually ask for collateral security.
Third party guarantee is required for the loans above Rs. 4 lakh up to 7.5 lakh.
After all the formalities, once the lian application is accepeted, then banks simply disburse the amount directly to the college/university as per the fee structure.
However, some banks do not ask for any collateral security for certain top-notch colleges such as ISB, IIM.
How is the Repayment of MBA Education Loan Can Be Done?
After that you have known all about education loan, you must also be wanting to know about how the repayment could be done?
It’s simple! Trust me!
When you avail for your loan till the time you are pursuing your course, forget all about education loan and concentrate on your career.
When you are completed with your course and got placed in a good company, here in repayment of loan can start after six months or one ever, whichever is easier.
This relaxation period is termed as a moratorium!
Repayment can be generally between 5yrs. and 7 yrs and can also be extended beyond that as well, depending on the bank’s terms and conditions.
What are the Benefits under the Income-tax Act?
An education loan can not only fund your higher studies but also will help you to save tax. Interesting part; the interest paid on the education loan can be claimed as a deduction, as per Section 80E of the Income Tax Act, 1961.Check out – Top 10 things you must know about Income Tax Deductions Under Section 80E
Section 80E of the I-T Act allows for deduction on the interest paid on the repayment of the loan. This deduction is allowed only if the loan borrower is paying interest on loan himself, spouse or children or for the student to whom you’re a legal guardian.
You can deduct the entire interest amount paid from your taxable income and keep in mind that this deduction is allowed at max. of 8 years. The principal amount of the is not qualified for any tax deduction.
Who can apply for the loan?
A student who is pursuing higher education is the main borrower. Student’s parents, spouse or sibling can be the co-applicant.
Whom is the loan offered to?
The loan is offered to the students who want to pursue their higher studies in India or overseas. The maximum amount offered for studies is different and varies from one bank to another.
Types of courses covered under the loan
Those who are willing to pursue a full-time, part-time or vocational course and graduation or post graduation in the fields of – engineering, management, medical, hotel management, architecture, etc
Usually the banks use the Marginal Cost of Funds based Lending Rate (MCLR), plus an additional spread to set an interest rate.
Here are some precautions which you have to keep in your mind
When you are looking forward to applying for an education loan, always keep in mind; the bank charges which are related to processing, pre-payment, late payment of EMI’s, etc. Most lenders charge around 0.15% of the processing fee of the loan amount.