Hello Reader,
The fact that you have landed on this page shows that you are interested in knowing the minute details of overseas education loan. This obviously means that you have made up your mind to achieve a foreign degree and are looking out for student loans for studying abroad.
This article will focus on those questions which are not asked very commonly but are very essential to understand the depth of the study loan process. Having complete clarity of any process helps you gain confidence in it.
So, read on and know the answers to the questions that you might have never thought of, or would have thought but never asked.
Question: 1
Can you explain what does it mean by interest free or moratorium period? Also, what happens if there is a break in my studies?
Answer:
The time given by the finance institution which lends you loan for abroad studies before you start the repayment of the loan is known as the Moratorium or Interest Free Period. This is basically Study Period + Job Search Period in which you need not pay the EMI to the bank. You can start paying the Simple Interest of the Loan Amount on the monthly basis which will heed you tax benefits as well.
In case there is a break in the study period, it is entirely up to lending bank’s discretion on whether to add a few months to the holiday period or to let it be the same. Again this depends on the type of loan availed as well; Secured Overseas Education Loan or Unsecured Overseas Education Loan.
Question 2:
To avail of an overseas education loan is it necessary to have an account with the bank?
Answer:
In the previous day, when the study abroad loan was not this common, the banks had this criterion but now it is no longer a mandatory requirement. The only this is that the processing becomes easier if you have an account with the particular bank but that doesn’t mean the other bank will not give you any loan.
Question 3:
Is it possible to borrow another education loan and if yes, then when will the repayment of the new loan commence?
Answer:
Well, the answer is, yes. In case you are planning to pursue Master’s then you can borrow another loan for the same without completing the repayment of the previously taken loan for Bachelor’s. This loan is known as a top-up loan which can be taken against the already existing loan. However, it is subject to the internal rules and regulations of the lending bank’s discretion.
The repayment period will begin as per the new moratorium period which will take effect once the student has joined a new course.
Question 4:
Are the education loans accepted in foreign exchange by the Banks? Can I pay the Bank in Dollars although my Bank is in India?
Answer:
The loan that is availed by the student in his or her home country is paid to the educational institution directly in the local currency (Dollar/Pounds/Euro etc.). On the loan amount disbursed, as per RBI regulations the lender may charge an additional currency conversion fee.
Question 5:
Are banks open to education loan requests from NRIs?
Answer:
Go through the criteria below where the bank accepts the requests received from NRIs:
- If the student is an Indian passport holder and fulfils all the education loan eligibility
- If the bank can hold any documents such as security or any collateral which is enforceable in India
Hope these set of questions and the answers were useful.
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Related URL:
Overseas Education Loan: Tax Benefits
Overseas Education – 3 Basic Ways of Funding and Tips to Repay
