Happy to share that we’re launching the most comprehensive youtube web series on study abroad education loan called “Loanflix- Education loan Simplified”. The motive is to make sure every student gets to know their study abroad education loan very well and takes an informed decision. The speaker of this episode is Damini Mahajan, CoFounder & CEO, WeMakeScholars.
Welcome to the first episode in this series. Today I’m here to just give you a sneak peek on the topic “Introduction to study abroad education loan” covering:
First, we’ll start with the very very basics. What is an education loan? That’s really easy, it’s simply a loan student takes to fund their education. Depending on the product, it can cover everything from your tuition fees, living expenses to your travel expenses, books, health insurance etc.
So let me tell you about what are the types of study abroad education loan. Basically there are 2 types. First is a collateral or secured loan and second is, you guessed it right, a non-collateral or unsecured loan. Going into some more details, a collateral or secured loan is the one where you have to pledge some security or collateral to mortgage to the bank for taking a loan against it.
The other type is an unsecured or non collateral where no security or collateral is needed but keep in mind that there are a lot of factors taken into consideration before you can receive a non collateral loan, primarily the student’s academic profile, the country they are heading to and another important parameters are co-applicant details like if they are your blood relatives, their financial profile and if they are filing for income tax returns.
Here at WeMakeScholars, we are associated with various nationalized banks and NBFCs for both secured and unsecured loans and we help out students in the study abroad education loan process.
Now let’s look at the various terms you’ll come across while applying for an study abroad education loan.
COLLATERAL: It’s something that you mortgage to get a loan against, it’s just a security to the bank for providing a loan.
There are two types of collateral: An immovable collateral like a house, flat, land etc. Second is liquid security- like Fixed deposit, LIC policies, govt. bonds, NSC
CO-APPLICANT-CO-SIGNER or CO-BORROWER: All three are actually the same. In simple terms a co-applicant is someone who will pay your loan if you won’t. They can be your parents, in-laws, relatives or your siblings.
MORATORIUM PERIOD: It is the grace period you get before repaying your study abroad education loan. This is something which is only in education loan but personal loan or car loan or home loan, you start repaying from next month itself. This grace period is generally taken as your course duration plus 6 months or 1 year. Repayment period you fill in your loan application starts after moratorium
PROCESSING FEE- The amount to be paid to the bank towards processing your loan. In case of govt banks, you pay while the processing is going on but in non-collateral loans from NBFCs, you pay it after the loan is provisionally approved. At WeMakeScholars, we always have refund or partial waivers of processing fee for almost all the banks.
LOAN INSURANCE- Insurance to cover your study abroad education loan in case something happens to you. It usually covers death, permanent disability or serious medical issues. It is always good to read your insurance agreement before you pay for it.
Now you must be wondering when should one start with the process of applying for a study abroad education loan?
So generally it is always better to start collecting information about the process just after you are done applying to colleges, so I hope all you guys watching are done with that process. The actual education loan application process can start a week or 2 before the expected date of receiving an admit, or even just after an admit is fine.
In the end, it’s all about planning and keeping some buffer at every step because people do come 10 days before visa date and they want a sanction.
The Hack: There is one hack or jugaad which I’m going to share in every video, a trick I learned in this journey. Many people find it easy to go for home loan top-up or personal loan for funding their studies abroad, but you should always choose education loan as the option because there is a moratorium period of almost 2 and half year when you are charged only simple interest, to be paid later, but in other loans it is compound interest to be paid immediately.
Hope this video was helpful and you could get a general idea about education loans. We plan to make this series as an in-depth information resource for everything related to education loans. So stay tuned for the next episode on “What is a secured education loan?” in which we would be covering in and out of secured loan, it’s rate of interest and its pros and cons.
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Timezone : (GMT+05:30) Chennai
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Damini is the Cofounder & CEO of WeMakeScholars.com. It’s a BITS start up supported and funded under the IT Ministry, Govt. of India. The organisation’s motive is to offer unbiased collateral/non-collateral based education loan support to students who are planning for studying abroad. As this initiative is under the digital India campaign, it's at free of cost. WMS works with 14+ banks (public/pvt) in India and help you get the best edu loan matching your profile.
Prior to launching WeMakeScholars, Damini had done her masters from the University of Sheffield, UK. Her education was funded under the Developing Solutions Masters Scholarship which covered her full tuition fee ($ 38,000). Damini is also a gold medalist in her Bachelors and also won the outstanding student award from the Vice president of India.
She was the speaker at TiECon 2016 at Silicon valley, San Francisco in the social entrepreneurship segment. She was also covered in the Asian Entrepreneur magazine in the “Women on Top in Tech”, a global series of Women Founders, CEOs & Leaders in Tech.