There is only one step between you and your ambition of study in USA now that you have achieved your target GRE/GMAT score and chosen your college. obtaining a student loan!
By eliminating the difficulties of financing, banks have made it easier for Indians to obtain an education loan. With the appropriate direction, students may successfully finish the loan application process without any difficulties.
While the application, approval, disbursement, and repayment processes for loans may vary amongst financial institutions, the majority of banks and NBFCs adhere to a straightforward process: -
Step 1: Determine the loan amount
Before the admission is officially verified, it is advisable to begin the loan evaluation process. The costs to be considered should include tuition, housing costs, exam costs, lab and library fees, the price of books and supplies, and travel costs. The loan amount is important because it can affect the interest rate. While an education loan application may be submitted before acceptance is verified, the disbursement will not begin until the student receives an I-20 form from the college, which includes information on the cost of living.
Step 2: Compare lenders to avail loan
Since it takes a lot of time and effort, evaluating several banks and NBFCs may appear overwhelming to students and their families. Instead of visiting many banks, you can apply through Credence, which offers a one-window platform that allows students to compare and select from a variety of banks and NBFCs.
On the following variables, banks and NBFCs can be compared: -
INTEREST RATE: The borrower should compare school loans and consider the interest rate the bank is offering. Lower interest rates make the loan offer more attractive. Different banks use different standards to determine loan interest rates; among the variables that might be negotiated are the borrower's academic standing, college attendance, family background, the amount of collateral offered, etc.
LOAN AMOUNT: A borrower must take into account the loan amount the bank is willing to provide. The applicant should look into loans offered by other banks if the loan amount the bank is offering is less than what the borrower requires.
REPAYMENT PERIOD: The repayment time has an impact on the interest rate, therefore the borrower should select a repayment period that would result in an EMI that he or she is comfortable paying after finishing their course.
MORATORIUM PERIOD: While some banks may not even give a moratorium period, others may do so for a period ranging from six months to a year. To select the finest offer for them, the borrower should take into account all of these variables.
Step 3: Apply for student education loan
By completing the application form, the application process begins. To complete the application process, you should have the necessary paperwork.
The documents required are: -
• University-issued letter of offer (proof of admission)
• The completed loan application form;
• The I-20 form's anticipated cost of attendance;
• The completed loan application form;
• Original transcripts and/or diplomas;
• Proof of passing any required examinations (GRE, TOEFL)
Student and co-borrower proof of residency, IT returns, PAN cards and other identity documents, co-borrower income documentation, and a copy of their passport are also required.
• Information regarding the parent’s or co-applicants’ assets and liabilities.
The loan is disbursed once the lender receives the I-20 form from the university, which includes details about the school (address, university code), the course and department details, the duration of the course, the fees associated with the course, living expenses, and the SEVIS number.
Step 4: Repayment
Once the moratorium period (EMI holiday) is over or the borrower secures employment, the student loan repayment for the USA begins. However, interest is still incurred during the study and moratorium periods. Simple Interest is the type of interest charged during the research period, whereas compound interest is the type of interest charged after this time.
There are usually 3 modes of repayment-
SIMPLE INTEREST: In this instance, the borrower keeps paying the Simple Interest while he is a student. As a result, simple interest does not keep increasing the principal, and the EMI simply includes the principal amount plus compound interest.
PARTIAL SIMPLE INTEREST: The borrower pays a small percentage of the simple interest in this mode, and the remaining interest is added to the principal amount over time. Thus, the principal amount as well as the remaining simple interest are ultimately subject to compound interest.
EMI: In this instance, the borrower waits to make any payments until the moratorium term is up. Due to this, the interest is paid in EMIs and is compounded on the principal plus the simple interest.
Education Loan , Education loans are a very useful tool with which you can shape your dreams of higher education.
Varthana aims to satisfy the requirements of affordable school owners by providing loan capital in order that they can expand their infrastructure, invest in teacher-training, and introduce new learning methods into their classrooms.Varthana was founded with a vision to rework affordable education in India by supporting the country’s many school leaders.We do this by providing timely loans and support, specifically catered to the needs of affordable private schools, so school leaders can secure valuable resources without having to go through a long and difficult process.Varthana also supports schools with academic and management solutions that help school leaders deliver a superb education to their students and be recognized because the top school in their community.https://varthana.com/Varasiddhi, 3rd Floor, No.
5BC-110 Service Road, 3rd Block HRBR Layout, Bengaluru - 560 043Tel: 080-68455777
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