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You are an engineering graduate and want to pursue higher studies overseas. Do you know how to get an education loan for this purpose?
Which banks offer these loans and what is the maximum amount that they can lend to you for studying abroad or in India? What documents do you require for this purpose?
Do you need guarantors to avail of education loans?
In a chat with Get Ahead readers on August 23, education loan expert Harsh Roongta answered these and several other queries related to education loans.
For those of you who missed the chat, here is the transcript.
feroze asked, hello sir, i am an engineering graduate currently working in a SW MNC. I m planning to do my PG diploma in a UK university. The cost of the programme is around Rs 15 lakhs. I don't have any immovable property. Can I get a loan for this loan amount without pledging any immovable property? Please help me by providing the info... thanks, Feroze.
Harsh Roongta answers, Feroze - currently no Indian bank [Get Quote] is likely to provide a loan of the order that you need without a tangible security. However you can try for one of the following 2 options:
1) If you have somebody with sufficient net worth and regular income to stand as a guarantor for your loan some bank may possibly agree to provide a loan (degree of difficulty - difficult)
2) Check with the university in which you have got the admission. Sometimes they have a tie up with a specific bank for a loan (eg. Instead with HSBC bank). These kind of arrangements normally do not require a tangible collateral.
Cool asked, Am a 30 year young working professional. Have a housing loan with EMI of about Rs 5 lakhs per annum. Want to do my MBA from Europe. Cost about Rs 35 lakhs. Wife working. Will not be earning during the one year course while doing MBA. No children as yet. Hopefully will have one by the time i go/do the course - God willing. How should i plan my loan? Which is the best?
Harsh Roongta answers, The best option for you is to raise an additional education loan on top of the existing home loan. In fact a PSU bank will be happy to take over your home loan (if your repayment track record has been good) and provide a top up education loan which you need not service during the peirod when you are in the course. That will still leave you with 2 issues:
a) Living expenses during the course period and
b)How to repay the home loan during the course period. I think from the cost mentioned by you it must be a top rung institute in Europe in which case it will have a specific tie up with an international bank for loans. Your best bet is to take such loans as even though it will be in foreign curency as it will be friendly in terms of non servicing during the course period.
Also you can take a top up loan on your existing home loan to pay for the EMIs during the course period as well as to take care of living expenses during the course period.
askbalancer asked, Good a/noon sir! I want to study MBA in Singapore. I can finance first and partly second trimester from my funds. My spouse will accompany me there and shall try for an on or off campus job there. I have Q 1. Can I avail loan from local banks there? Based on my spouse's jobcard.(OCBC has a branch in campus there) Thank you.
Harsh Roongta answers, What you are planning is fraught with several risks:
1) Please check if the visa will allow your wife to work when she is in Singapore
2) You cannot be sure that she will indeed get a job at Singapore
3) Without demonstrable proof of income it may not be possible to get a loan from a local bank there.
4) Check with OCBC beforehand -- preferably through the university -- whether thay can consider a loan based on your facts and circumstances. Lending in Singapore is heavily regulated and so you may want to to be sure of these facts before proceeding ahead. A better alternative is to try and obtain an education loan from Indian Banks here.
ManishR asked, Hello, Can I get tax benefit on interest and principal replayment of education loan?
Harsh Roongta answers, Tax deduction is available only on interest paid on a loan taken to:
1)Finance a higher education course which is full time
2)The course has to be undergone by yourself, your spouse or your children
3)The loan has to be taken from a scheduled bank. The deduction is available for a fixed number of years after you begin repayment. for a detailed answer click on this link http://www.apnaloan.com/primers/education-loan-india/tax_benefit_education_loan.html.
ajey asked, my son has 700 in GMAT. Can he hope to get in Ivy League? Loan available from citibank in US? Graduate with four years work experience, excellent scores in class 12, average score in undergraduate.
Harsh Roongta answers, I am unable to answer this question. You should consult an education counsellor for this. At Apnaloan we can provide advice on the best way to raise funds for your son's eductaion. Here's wishing your son the best of luck.
feroze asked, CAN A PERSON IN THE FAMILY WHO IS WORKING ABROAD , BE THE GUARANTOR ?? hello sir, thanks for giving the answer to my previous question. you have said that if i don have any immovable property to pledge, i can show a gurantor for my loan who has sufficient net worth. my dad is retired and only my elder brother earns money . can he be my guarantor? but he is not in india. he is working abroad ? thanks, Feroze.
Harsh Roongta answers, You can try Feroze. It will help if he is an Indian citizen.
KLNARASIMHAM asked, I am a CA from Vizag. I know that Educational Loans upto Rs 4.00 lakhs can be given without insisting on any security or guarantee. But many banks are insisting on Third Party guarantee. I know many bright students whose parents are not even Income Tax assessees. How can they get loans?
Harsh Roongta answers, You are very right. However for this purpose the bank is normally not supposed to insist on a guarantor. Please shop around among the public sector banks to ensure this happens. The education guarantee fund (not the exact name) is being set up by the Government of India to partly guarantee education loans to banks and then these kind of loans should be more easily available.
Harsha asked, Hi Harsh I am planning International MBA which could cost me about Rs 25Lakhs .What is the max. amnt I can get as loan? I am presently working in an MNC with Rs 8 lakhs per annum salary . Do I need a guarantor for Loan? Would my brother with Rs 4 lakhs salary be acceptable as a guarantor? Which banks have provision for payment of interest after employment ? Could u Please answer my Question?
Harsh Roongta answers, Most banks will cap the loan amount ot a maximum of Rs. 15 lacs. almost all public sector banks will allow you to defer payment of ineterst till 6 months after the course is completed (or till you get a job whichever is earlier). You will need to provide some tangible security to be eligible for a loan amount of Rs. 15 lacs.
srin155ath asked, hello sir, this is Srinath, and here goes my question: What is the maximum possible loan amount available in India across most banks that can be taken for studying abroad? Is it a percetnage of the total fees or is it a fixed amount?
Harsh Roongta answers, As education loan - maximum Rs. 15 lacs . Normally margin amount will be at least 5% fo the total course cost.
vikas asked, How much Educational Loans can be given without insisting on any security or guarantee?
Harsh Roongta answers, Rs. 4 lacs.
ravis asked, I completed my B.Tech and want to do my MBA abroad. What type of loans can i get and what is rate of interest for that?
Harsh Roongta answers, you can get statndard education loans or go for a loan against property or any other security. Normally fro loans above Rs. 4 lacs the banks insist on a collateral security.
MALAVIKA asked, HELLO SIR IT WAS MENTIONED BY THE BANKS THAT NO SECURITY IS REQUIRED FOR AVAILING LOAN UPTO RS 4 LAKHS. WHAT DOES IT MEAN? AN ADMISSION LETTER FROM A MANAGEMENT INSTITUTE?
Harsh Roongta answers, for docunments required http://www.apnaloan.com/primers/education-loan-india/document_list.html.
Brandon asked, I am doing my executive MBA from XLRI, however i was denied an education loan saying that i am not elligible, though my income more that covers the cost. and i was given a personal loan.
Harsh Roongta answers, You should approach a public sector bank in this in which case this would not have happened to you.
Tomorrow: Part II
Harsh Roongta is the CEO of apnaloan.com. It is a guide to education loans in India. Apnaloan also enables consumers get best education loan rates by making banks compete for their loan.
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