Education loan transfer : All you need to know
While deciding on a loan provider, it is very important that you conduct thorough research of their terms and conditions regarding abroad education loans. But what if you end up borrowing education loan from a lender whose interest rates are very high or if their loan repayment policies are not convenient for you? If you are stuck in such a situation, there is a way out- education loan transfer. Today’s article will tell you all about how switching your education loan provider is one of the solutions in such a situation and how it will help you ease your education loan baggage.
Or better yet, hear all about it from Damini Mahajan, the co-founder of WeMakeScholars and the speaker for the 13th episode of our web-series, ‘Education loan transfer: Things to know’.
So let’s move on to the obvious question here.
What is education loan transfer?
Here’s a small peek into how education loan transfer works.
Let’s assume that you took an abroad education loan from an NBFC because of their shorter processing time and a year later, you are not satisfied with their education loan repayment policy and would like to opt for a student loan refinance from a public bank.
- Once you decide to opt for an education loan transfer, your old lender gives you a statement of the pending loan amount to be repaid.
- This statement has to be submitted to the bank providing the student loan refinance.
- Once the new bank receives this statement, they begin your loan process as usual.
- Once your loan is sanctioned, the new bank issues a cheque with which you can clear your pending dues with your former lender.
So how does an education loan takeover help?
- Most of you who are currently reading this article may not know this. The interest rates of takeover loans are always less as compared to the interest rate of a fresh loan. For eg. let’s consider the case of a major bank like SBI.
- The interest rate for male candidates applying for a new education loan is 10.33%. This is along with the loan insurance concession. However, in the case of an education loan transfer, the interest rate is only 10.05% for male candidates.
- Similarly, for female candidates, the interest rate for a fresh abroad education loan is 9.8% with the loan insurance concession. However, if it is a takeover-loan, the interest rate for female candidates comes down to 9.55%.
- Takeover loans are cheaper because the risk factor for the new bank is really low.
What is the eligibility criteria for an education loan transfer?
A loan applicant may opt for an education loan transfer only when
- There are no more disbursements to be taken from their current lender’s loan by the loan applicant. It means that whatever loan amount had to be disbursed from your previous bank has already been disbursed and the loan applicant cannot borrow any more money from the previous loan.
- Repayment towards your old loan has already started in the form of EMIs.
Some other terms and conditions for an education loan transfer
- While transferring collateral education loans, If you plan on transferring your current education loan from one bank to another, the new bank will take over your existing collateral.
- If you have an existing non-collateral loan with your current lender and you wish to transfer education loan to a public bank, which mostly lends collateral-based loans, you may have to place valuable collateral with the particular public bank.
- There is no loan margin. The public bank to which you wish to transfer the education loan will give you a 100% loan on the collateral value.
The rest of the terms and conditions are similar to those of a regular abroad education loan. If you are still facing any doubt regarding your eligibility for a takeover loan, Please feel free to request our financial team for a callback. Our team will respond at the earliest.
How does WeMakeScholars help?
- Along with providing support for regular abroad education loans, our financial officers also help you with education loan transfers.
- Our team has processed close to 20,000 student loan applications in the past year itself. No one in the market has as much expertise as our team in the market, due to a large number of loan applications processed by us.
- We can proudly claim this because if you happen to walk into any of the bigger branches of a huge organization like SBI, you may observe that they do not process more than 20-30 abroad education loan applications annually.
- Our team’s expertise is built on the knowledge acquired from processing huge volumes of education loan applications every year.
So, if you are someone who is stuck with the wrong lender who is charging you a bomb in the name of interest, do approach our team to help you get an education loan transfer to a bank which charges you a relatively small amount as interest. Even if you are studying abroad and if you wish to switch your lender, our team can help you with your loan takeover by coordinating with the respective bank on your behalf and with a little help from your parents.
We hope this article helps you solve your doubts regarding education loan transfer. For any further assistance, feel free to contact the financial team at WeMakeScholars. Our team spends a lot of time explaining each and every aspect of the loan process to our students. Even banks do not spend that much time trying to explain every single detail of the process. In our next article, we talk about one of the most important aspects of an abroad education loan – Loan margin. This concept is something which despite having an ample amount of knowledge, candidates often tend to overlook and banks often fail to explain. So stay tuned!
Note: WeMakeScholars is an organization funded and supported by the Government of India that focuses on International Education finance. We are associated with 10+ public/Pvt banks/ NBFCs in India and help you get the best abroad education loan matching your profile. As this initiative is under the Digital India campaign, it’s free of cost. The organization has vast experience dealing with students going to various abroad education destinations like the US, Canada, UK, Australia, Germany, Sweden, Italy, China, France among others