5 Mins Jan 10, 2022
Riya Pandit, 26-years old, is an engineer who had planned to enrol for an MBA programme in the United States when the pandemic struck and imposed travel restrictions. She has been working remotely for 18 months and saving up for her dream. Now
that the outbreak is receding and travel restrictions are being eased, Riya has started actively scouting for a suitable MBA programme.
The cost of the MBA and tuition works out to around Rs 40 lakh even after student aid. Since this is far more than her savings, Riya has decided to opt for an international education loan to finance her MBA. She spoke to her uncle, a banker, and
got all the necessary details crucial for obtaining the loan. Here is what he told Riya:
1. Ensure that she fulfils all the eligibility criteria required to get an education loan from a bank. These include having a certain percentage in her final examinations and opting for a
university and course recognised by the bank.
2. Ensure that the loan amount will cover all kinds of expenditures like study material, travel fees, purchase of laptop required for the course and accommodation charges.
3. Ensure that she has a co-applicant to apply for the education loan. The co-applicant can be one or both of her parents, who will act as the primary debtors.
4. Repayment of educational loans starts after a specified period of course completion. There is also a fixed tenure during which the loan has to be repaid. Riya should be aware of this.
5. Ensure that she has collateral or a guarantee for the loan. Banks might ask for some third-party security or even collateral based on the amount of the loan and the university. The collateral is generally fixed deposit or real estate (it can
be commercial or residential property). Banks also take out an insurance policy on the applicant, the premium for which is included in the education loan amount.
6. Banks also offer tax exemptions under section 80E. Riya must remember to look up information about the same in case she is eligible for tax exemption.
7. All documents required while availing of an education loan must be made readily available by Riya. These include:
- Loan application form.
- PAN card, Aadhar, passport, passport-sized photographs, residence proof.
- Academic records.
- GRE/GMAT/TOEFL/IELTS scores.
- Admission letter from the university.
- Bank statements for the last six months of the co-applicant.
- Income proof of the co-applicant.
- Income tax returns of co-applicant.
- Title deed (with all pages) of the home.
- Copy of all prior sale deeds of the home for the last 13 years. This is known as an Encumbrance Certificate.
- Latest property tax receipt.
- Possession certificate in case the flat is purchased from a builder.
Once all the documents are ready, Riya can go to the bank of her choice to begin the application process for her education loan and finally venture out for the next chapter of her life.
[Also Read: Eight Benefits of Taking an Education Loan in 2021]
Riya could consider availing an education loan from Axis Bank. The Prime Abroad variant include offers education loans for full-time premier courses abroad. The benefits include:
- Maximum loan amount up to Rs 40 lakh; no upper limit for secured loans which can vary on a case-to-case basis
- Loan tenure up to 15 years, which makes it easy to repay without undue burden on her finances
- Door-step services
- Multi-currency Forex Card using which she can easily manage her expenses during her stay overseas
Visit Axis Bank for more details on Axis Bank’s education loans.
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