 Why does the repayment of education loans taken for school/high school/graduation studies start immediately? |
| Answer |
In the case of educational loans taken for school/high school/graduation courses, the student is not the borrower; his/her parents or guardians are. And since it is assumed that they have a steady source of income, the loan repayment can start immediately without any holiday period. Hence the repayment starts immediately.
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| Is there any special privilege for students in the Scheduled Caste/Scheduled Tribe (SC/ST) category who avail of educational loans? |
| Answer |
Yes, special privileges, in terms of eligibility and margin money, are given to Scheduled Caste/Scheduled Tribe students availing educational loans. The eligibility criteria are lowered from first/second class to pass class for SC/ST category students. Further, the margin money for them is sometimes nil or lower than the normal amount. Only nationalized banks offer these privileges to SC/ST students, and not private or foreign banks. Even with nationalized banks, one needs to properly check out these privileges beforehand.
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| When do I need to apply for a loan? |
| Answer |
One major criterion that banks seek is confirmed admission. So, once the student has secured a confirmed admission in an institute, along with a break-up of fees and other related issues from the college, he/she can approach a bank for an educational loan.
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| I don't have a continuous track record of First Class, but I have secured admission in a reputed institute. Will I get an educational loan? |
| Answer |
Yes, a good academic record is essential, but not compulsory. A lot depends on one's relations with the bank, and the bank has a sole discretion over the disbursement of the loan. Also, a lot depends on whether you are able to provide the collateral required by the bank. If both of the above factors are in your favour, you could be the lucky one to get an educational loan from the bank for your further studies
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| Why are guarantors required? |
| Answer |
Guarantors are essential for sanctioning of loans. Usually, a guarantor is required so that if the applicant fails or becomes incapable of repaying, the guarantor will be responsible for clearing the debt. Usually, a guarantor so chosen is a person with a net worth (i.e., annual income) equivalent to, or more than, the loan amount.
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| Will I get an educational loan for `payment seats' also? |
| Answer |
Yes, one can get an educational loan for payment seats too. Usually, the banks have a ceiling for each course, and, based on that, they decide the loan amount. So long as the loan amount does not cross that ceiling, the student can be assured a loan, provided he/she satisfies the other eligibility criteria.
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| What are `professional courses' and `other courses'? |
| Answer |
Professional courses are ones that are very specialized, like M.B.A., M.C.A., M.B.B.S., Engineering, C.A, Architecture, etc. These courses are usual graduation courses spanning three to four years, but since they deal in very specialized fields, they are termed `professional courses'. `Other courses' are those that are not included in any other category, like school/graduation, post-graduate and professional courses. These could include courses like fashion designing, computer courses from reputed institutes or courses affiliated to the Department of Electronics, etc, commercial pilot's courses, and courses for fine arts.
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| What is the margin amount and how is it calculated? |
| Answer |
A margin amount is the amount that the applicant pays through his/her pocket. A bank can either pay 100 per cent of the cost of studies or a certain percentage of the total cost. The margin is usually the amount not covered by the bank for the payment of the essential and necessary fees to the college/institution. Consider an example: Bank XYZ offers a loan for an M.B.A. course, and the margin is 10 per cent. Here, 90 per cent of the cost of the course will be borne by the bank and the balance 10 per cent has to be borne by the student/applicant.
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| Is the student's age a major consideration while applying for an educational loan? |
| Answer |
This again depends on the bank and its discretion. Quite a few of the nationalized banks follow the criterion of sanctioning loans to students falling in a particular age group, e.g. 15-25 years. But this is not so with private and foreign banks. It is always safe to check with your bank first for all the details regarding eligibility.
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| Will air travel fare be given by the bank as part of the educational loan? |
| Answer |
That depends on the bank concerned. Some banks provide for air fare, applicable only once, and one-way, at the time of joining the course. This is given to students going abroad for further studies, and is not applicable for students going for domestic studies. The money for the one-way fare is given directly to the airline concerned, and not to the applicant.
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