As a student who applied for and received a significant scholarship for education abroad, the financial pressures of a foreign education are all too well-known. Not everyone has enough finances to support their pursuits in education in countries abroad and studies even suggest that the cost of attending institutions abroad increases by as much as 15% every year. Scholarships are one significant way to finance education abroad. There are various different types of Scholarships that an MBBS Student can receive. For more information on this visit our scholarship page (this part to be hyperlinked to a page I could possibly write about scholarships since this is quite lengthy already)
Another way to ease some of the financial pressures are student loans. These are an increasingly popular option, allowing students to pursue their degrees in foreign institutions.
What has however become increasingly uncertain in these unprecedented times is the availability of these loans at reasonable interest rates. Currently, there are two types of loans that are available: secured loans and unsecured loans.
Secured loans have something called as collateral attached to it, and if the loan fails to be paid off the asset/s offered as collateral are seized by the bank or entity offering loans. The entity applying for a secured loan has to pledge some sort of security, which may be tangible or intangible. Ideally, this type of loan requires a longer time to be approved and has more documents that need to be verified. However, they offer considerably lower interest rates than unsecured loans and this hence means that overtime you spend less time and money covering a secured loan.
If a student opts for an unsecured loan, he or she doesn’t have to pledge any form of security to the entity giving the loan. This is ideal for students who do not have any collateral to offer. However, the major disadvantage of this type of a loan is that interest is considerably higher and hence uses more funds to repay the full amount with interest.
Both of these types of loans are viable options depending on the situation of an individual student. The main risk with secured loans is the risk of the collateral being seized by the government shall the student fail to repay the loan. With unsecured loans, the main disadvantage lies in the fact that interest rates are high and hence is the more expensive option. Before a student chooses which type of loan to go for, options and situations of that student must be evaluated since both of these are long-term financial commitments that must be met with.
Required Documents for applying for a Student Loan:
Another question that often bugs parents and students are the documents that are required to apply for a loan. The procedure is quite complicated in itself and one of the ways to ensure ease of procedure is to keep the documents readily submissible to the entity (government) giving the loan. Given below is a list of general documents that are needed to apply for a student loan.
|Secured Education Loan||Unsecured Education Loan|
To apply for a student loan, students need to do a number of things:
- First and foremost, the student needs to check their eligibility for loan schemes that are offered by a multitude of lenders.
- The student will then have to finalize their lender after keeping in mind the interest rates and pay back period for each different scheme and weighing the different options.
- After that, the student will have to apply for the loan to the particular lender and give all necessary documents (specified in the table above).
- Once the loan application along with the documents has been submitted, the bank will assess the application and finalise the loan, provided it meets all the requirements.
- Once the application is approved, the student (applicant) and their parents (co-applicants) will have to accept the loan offer and pay any outstanding processing fee.
- After the loan application has been signed by all parties, the bank will give out the loan.
Applying for and processing a loan is quite a daunting task for both students and parents. Hence there are a couple of things to look out for when applying for a choosing a loan scheme:
- Rate of Interest
- Loan Repayment Period
- Tax Benefits
- Margin Money
- Prepayment Penalty
- Expenses Covered
- Moratorium Period
Keeping in mind all the given information, and doing some more detailed research on the types of loans available for MBBS students wanting to pursue education abroad, students and parents should carefully consider their options and then choose the option that sees the most financial benefits.