Indian students are going abroad for higher studies and day by day the number is increasing. The main hurdle that comes in the way is finance, students have two options to look up and they are- loan and scholarship
Students who consider applying for loan scholarships are known as fellowships or trust loans. The Aga Khan Foundation, Inlaks Scholarships, Rotary Ambassadorial Scholarships, JN Tata Endowment and KC Mahindra Education Trust are some popular options among students. The terms and conditions of every aid vary.
In case of JN Tata Endowment, the selected students need to start repaying the loan scholarship (which is interest-free) from the fourth year of the scholarship (being granted), or once s/he secures employment, whichever is earlier. It has to be repaid by the seventh year.
Similarly, overseas aid is available depending upon the course and the university. “For MBA courses below the twentieth rank, students get 30% to full funding on an average. 10-20% of the students take up campus jobs which aggregate to 20 hours per week, which adds to their financial aid,” Vishwanathan adds.
Banks are the second option that most of the scholars opt for, offer education loans but the collateral and the terms are more stringent for overseas degrees. The collateral could be in the form of fixed deposits (FDs), National Savings Certificates (NSCs), insurance policy or even a house worth the loan amount. You may also require a co-borrower depending upon the bank and the loan amount you borrow. The maximum loan amount is capped at Rs 20 lakh but, students have to pay 15% of the cost of the course out of their own pocket.
What if, you get cheaper aid once you get to the foreign institution you decide to study in? There are always two stages to the loan. One is the approval stage and another is the disbursal stage. Although, the total loan amount gets approved in principle, it’s disbursed on an annual or semester basis, depending upon your requirement.
The repayment period varies between five years and seven years, and starts a year after the completion of the course or six months after securing a job, whichever is earlier. “Before you finalize the bank, please check how they compute the interest rate. Some banks, especially many public sector banks, offer an EMI holiday during the study period,” says Harsh Roongta, CEO, Apnaloan.com.