Quick Application in 3 Easy Steps
Our 3-step process enables hassle-free and quick approval of education loans
Once you complete our 2-minute education loan application, we automatically match your profile against our partner lenders’ criteria and determine the best education loan deal that you can get.
We will then get in touch with you to finalize your choice. We then define a customized list of documents that the lender will want. In most cases, you can submit the documents from the comfort of your home! We then follow-up with the lender to quickly process your loan application. In case of any roadblocks in the approval process, we resolve the issue by getting in touch with the relevant officials of the bank. In the case of private lenders, we also negotiate the interest rate on your behalf.
Once your loan is approved, we help to coordinate the disbursal to the university as per the fee schedule. We also enable pre-visa disbursal, which is mandatory for several institutions in Canada, Australia etc. Typically, banks do not disburse an overseas education loan without a student visa.
An investment in knowledge pays the best interest! And if the knowledge is attained at a top-tier and premium university then it is sure to elevate your career to the next level. However, the unfortunate reality is that the cost of studying in a reputed college is usually quite steep. And studying in a good college abroad is an even more expensive proposition.
Generally, parents prepare for this by investing in several long-term investment plans like ULIPs (Unit Linked Insurance Plans), FDs (Fixed Deposits), and MFs (Mutual Funds). But even then, with the continuously increasing cost of education, there remains a wide gap. Education loans help bridge that gap so that anyone and everyone, irrespective of their financial status, can realize their dream of studying in one of the best universities of the world.
Numerous banks and other financial institutions now provide education loans for students who want to study abroad. These lenders have different education loan schemes on offer, but to choose the one that is right for you is not an easy task. And that is where GyanDhan helps. We match you with that lender, which best suits your profile and needs, and then help secure the loan approval in the most seamless and hassle-free manner.
Making the Right Choice: Cost Impact of an Education Loan
Taking an education loan to supplant the cost of education abroad is the right choice. Depending on the amount and your profile, financial institutions can finance even 100% of the cost of the course. However, to the best education loan option, one needs to carefully analyze the following key aspects of the various options available. When you apply to GyanDhan, we do this analysis for you. In case you do the loan comparison yourself, consider these factors:
- Interest Rate: Even a 1% increase in the education loan interest rate has a substantial financial effect. Example - Loan Amount: Rs. 30,00,000, Loan Repayment in: 5 years after you graduate, Course Duration: 2 years; While at 10%, you’ll pay Rs. 9.7 lakhs in interest, at 20%, you’ll pay Rs. 10.9 lakhs - that’s a difference of 1.2 lakhs for just 1%!.
- Repayment Holiday/Moratorium Period: It is a specified period during the loan tenure in which the borrower is exempt from making repayments. Loans with moratorium period have a big plus, as you don’t have to worry about making repayments while you study.
- Tax Rebate: Education loans taken from Indian banks are special in that the entire amount paid as interest is exempt from income tax. This has a huge impact: Example - Loan Amount: Rs. 30,00,000, Marginal tax bracket: 30%, Repayment in: 5 years after graduation, Course Duration: 2 years, Interest Rate: 10%... If your loan has tax rebate, you can save Rs. 2.9 lakhs!
- Margin Money: The amount that you need to pay from your own pocket while the rest is paid by the bank. If a bank offers 0% margin, it means they’ll fund all your education expenses. Learn more in this blog.
- Hidden Fees: There are numerous hidden fees that your lender might be charging you and when accumulated these will cost you a considerable amount, such as:
- Forex Margin: Some lenders charge a forex conversion charge when the education loan is sanctioned in INR and disbursed in some other currency. This can be as high as 1.5%, which translates to Rs. 45,000 for a loan of Rs. 30 lakhs.
- Processing Fees: This varies from zero to as high as 2%. For a loan of Rs. 30,00,000, it can be as high as Rs. 60,000
- Cost of Credit Life Insurance: Some lenders make it mandatory for the applicant to go in for credit life insurance so that their loan amount is protected against any unfortunate eventualities. If the premium amount is on the higher side then it eventually increases the cost of the education loan as well.
- Mandatory Cross-Sell: Some lenders try to cross-sell other policies before sanctioning the education loan, even though it is not required on the applicant’s end.
- Interest Rate in Different Currencies: Often students face a dilemna of choosing over an education loan in USD with a lower interest rate or an equivalent amount in INR with a higher interest rate. By the previous trend of the rising prices of US$ to INR conversion rates, it is a smart choice to go for the loan in INR even though it may come with a higher interest rate.
As you can see, by selecting the right education loan, the reduction in cost can be as high as 5-6%..
Which is Better: Loan With Collateral or Without Collateral
Education loans are of two types, one that is taken with collateral i.e. a secured loan and one taken without collateral i.e. an unsecured loan. You need to understand the difference between the two before choosing the one that is right for you.
Secured Education Loan
- Requires the borrower to offer any collateral like immovable property, FD, Insurance Policy etc. against which the loan is offered.
- Lower rate of interest.
- The chances of approval is high.
- Longer repayment period.
- No repayment during study period.
- Parental income is not required for the approval.
Unsecured Education Loan
- The borrower does not need to offer any collateral to get this loan.
- Higher interest rate, usually 1.5% - 4% higher than the secured loan.
- Is a more risky proposition for the bank, hence is not so easy to obtain an unsecured loan from the bank.
- Comparatively shorter repayment period.
- Some repayment during study period.
- Parental income is required for the approval.
Our help is not limited to education loans. We also provide all the necessary information and help that you need so that you can successfully apply to your chosen university abroad.This includes..
Thus, GyanDhan provides a complete study abroad solution for you. Besides offering transparent, reliable, and up-to-date information related to everything in the higher education domain, we also supplement help in all areas that can make your relocation abroad easier, smoother, and cost-effective.
There are two ways,
- Students can check the eligibility on GyanDhan’s loan eligibility tool and get an instant loan recommendation. Post which, a GyanDhan executive will get in touch with the student to help in the documentation and further process, OR
- The students can request a call back on GyanDhan’s website and an education loan counsellor (ELC) gets in touch with the student to understand the requirements within a few hours. Our ELCs will ask a few detailed questions to further assess the profile and match the profile with the best lender. Often, students are not aware of the deals available for them, in which case we help them choose the loan with maximum benefits.