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Dos and Donts of Student Loans in India

Dos and Donts of Student Loans in India

Increasing career benefits of a foreign education coupled with an enriching global exposure has increased the number of students who aspire to pursue their higher education abroad. In spite of a plethora of advantages of studying abroad, the exorbitant expenses involved discourage students from following their dreams. Although many scholarships and financial aid options are available, all students do not become eligible for them. As a result, educational loans become significant to the study abroad plan for the student. Education loans for studying abroad are provided by almost all the major banks in India, but parents and students are apprehensive about the complicated and cumbersome loan application procedure. With easy repayment options and reasonable interest rates, securing funding for study abroad plans has become much simpler than what is perceived. Below are a few tips to obtain student loans. Dos and Donts of Student Loans in India

  1. Be proactive

While you are anxiously awaiting the offer letter from your dream University, start applying for an educational loan. For this, you must research the available loan options thoroughly. Make use of this period effectively to study the various loan options. Being proactive will give you sufficient time to properly weigh all your option before you choose the most suitable loan scheme.

  1. Compare Interest Rates

As you research on loans from leading banks, you will find that they offer loans with varying rates of interest. Compare the student loans that are on offer and make a thorough comparison. State-run banks normally have lower interest rates as compared to private ones. The current interest rates usually fall between 11% to 14%; however most of these are offered on a floating rate basis. This means you should be prepared to face an increase or decrease in interest rates later depending on market conditions. With respect to security requirements for the loan-

(a) Loan up to Rs. 4 lakh- No collateral security is needed, parents are the joint borrower. Dos and Donts of Student Loans in India

(b) Loan amount between Rs.4 to 7.5 lakhs- along with parents as joint borrowers, collateral security in the form of a third party guarantee must be given.

(C) Loan amount above Rs.7.5 lakhs- Parents must be joint borrowers plus tangible collateral security of suitable value is required.

  1. Apply to more than one bank Dos and Donts of Student Loans in India

Do not depend on just one bank for your loan. It is advisable to apply to multiple banks, in case your loan application gets rejected by one.

  1. Eligibility criteria
  • The applicant should be an India citizen Dos and Donts of Student Loans in India
  • The applicant has secured admission to a professional or technical course through an Entrance Test or Selection process
  • Secured admission to foreign university/ Institution Dos and Donts of Student Loans in India
  • Banks generally offer educational loans for long-term programs by prestigious institutions. Short-term ones (such as English language programs) are usually not covered. For those planning to study vocational courses, educational loans do not cover these either. MBA, engineering graduate and medical students are among the top choices for banks. Banks usually do not provide loans to students with a bachelor’s or masters in Arts. Also, for courses where employment prospects are less (as per Bank’s evaluation), loans are sanctioned by considering the parents’ income.
  1. Cosigner

When a loan amount exceeds Rs 5 lakhs, you must indicate who your cosigner is. A cosigner (usually parent) is a person who must sign the loan agreement with you, will be responsible for your debt and agrees to pay your debt, in case you fail to repay the loan. Dos and Donts of Student Loans in India

  1. Prepare Application Checklist

Contact the bank and obtain a checklist from them in advance to have all documents and papers ready for the loan application. You must find out if the University has any tie-ups with banks for educational loans as it could expedite the loan process. Dos and Donts of Student Loans in India

The Application Check List should comprise of-

  • Identity Proof- driving license, passport, pan card, voter identity card, and Aadhar Card.
  • Address Proof- Passport, Bank account statement, Ration card, Aadhar card, Voter’s ID Card and Telephone bill/ water bill/ electricity bill
  • Signature Proof- The banker’s signature verification, Driving license, PAN card, and Passport copy.
  1. Loan Amount

For an overseas study, loan worth Rs 7 lakhs and above are approved against fixed deposits or property worth the loan amount, NSC certificates and a margin of 15 percent (means you get 15 percent less than the amount sanctioned as a loan). Also, if a loan below Rs 4 lakhs comes at a particular interest rate, the loan over Rs 4 lakhs is usually charged at one percent higher. This is a general overview but for more specifics and schemes on the amount, the rate of interest and repayment options, you must check the individual bank websites.

  1. Documents required for applying for a Student Loan

1) Mark sheet of the last examination for school and graduate studies in India

2) Proof of admission to the course

3) Schedule of expenses for the course

4) Copies of the letter confirming scholarship, etc.

5) Copies of foreign exchange permit, if applicable

6) 2 passport size photographs

7) Bank account statement of the borrower for the last six months

8) Income tax assessment orders not more than two years old

9) A brief statement of the assets and liabilities of the borrower (usually the parent or guardian) and proof of income.

10) In case you are not an existing client of the bank from which you wish to avail the loan, you will also need to establish your identity and give proof of residence.

  1. What the education loan usually covers

Education loans usually cover tuition fees, books and any other supplies, room and board fees, transportation costs, health insurance, as well as other living and education related expenses. The bank usually does not hand over the money to you, but will credit it to the University’s account at the start of each year or semester as required.

  1. Read the Fine Print

Take time to go through the loan agreement’s fine print before you sign it. You should check for the interest rate structure, the pre-payment details, and any options to extend loan repayment in case of unemployment after graduation. Understand the entire loan disbursement process, its various clauses and clear any questions that you have with the bank officials.

A list of banks that provide education loans for study abroad in India

  • State Bank of India
  • Allahabad Bank
  • Axis Bank
  • HDFC Bank
  • Credila (a non-banking finance company, subsidiary of HDFC Ltd. exclusively focused on education loans.)
  • Punjab National Bank (PNB)
  • IDBI Bank
  • HSBC India
  • Indian Overseas Bank (IOB)
  • Avanse Financial Services
  • Syndicate Bank
  • Canara Bank

Thus, by preparing for an education loan application well in advance, gaining a clear understanding of the moratorium period and repayment options and conducting an extensive research about the various loan schemes available, you will ensure that the loan application process is smooth and you will be that much closer to fulfill your dream of studying at a prestigious university abroad.

STEM OPT Extension and its implications

In order to improve and expand the training opportunities, the Department of Homeland Security (DHS) is all set to issue a new rule regarding the student visa regulations on optional practical training (OPT) for students who are earning degree in the fields of science, technology, engineering or mathematics (STEM) from the US universities. As per this new rule, international students who are pursuing 12 months of OPT in the United States can now enjoy an extension period of 24 months, i.e 36 months of OPT in the U.S. This 24 month extension effectively replaces the 17 month STEM OPT extension that was previously available for the STEM students. Read More

STEM OPT

A new rule is going to be issued by the federal government which is all set to change the future of many international students for the better! In all likelihood, the period of Optional Practical Training (OPT) which was extended from 12 months to 29 months for non-immigrant students who were on F-1 Visa and pursuing a STEM degree (Science, Technology, Engineering or Mathematics) will now be 36 months.

As a result, of this new rule which will come into effect on May 10, 2016, foreign students who have earned degrees in the fields of Science, Technology, Engineering and Mathematics will now become eligible to stay for three years for on-the-job training, i.e., seven months longer than the 2008 rule. This new rule is sure to bring a new light of hope for those students who wish to work in the US. Apart from offering graduates more experience in their respective fields, this extension will also aid students who aspire to work within the country. If their work visa (H-1 visa) gets denied, they still have the opportunity of applying again and at the same time, they can continue to work within the country.

This new regulation, however, has given rise to a boiling controversy. It is no doubt a cause of celebration for international students, but it has also sparked an outrage amongst American workers. Many American workers view the training program’s extension as a threat to their work rights. However, the new rule clearly states that a STEM OPT student will not replace a full or part time, temporary or permanent US worker and also the terms of the pay package for the US and a foreign worker will be based on a common measure and divisor.

The motive for introducing this new rule is to enhance the training sessions and not to unfairly disadvantage any US workers. This new rule is indeed in favour of skilled talent and has no intention of taking away any opportunities for American workers. It is an opportunity for ensuring innovation and economic growth. This rule will ensure that the foreign students who come to the U.S. and receive degrees in sought-after STEM fields, do not leave soon after finishing their programs due to visa restrictions but instead continue to contribute to the economy.

STEM OPT extension from 29 Months to 36 Months STEM OPT extension from 29 Months to 36 Months STEM OPT extension from 29 Months to 36 Months STEM OPT extension from 29 Months to 36 Months STEM OPT extension from 29 Months to 36 Months STEM OPT extension from 29 Months to 36 Months

Ten ways to avoid being homesick when studying abroad

Everyone expects studying abroad to be an incredibly exciting experience. However one phenomenon that can hamper the entire experience is “homesickness.” Mostly fuelled by the cultural shock, homesickness can be a little daunting to deal with. Here are a few valuable tips, which will help you overcome homesickness with ease. Ten ways to avoid being homesick when studying abroad

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University Insurance versus Indian Insurance

University Insurance versus Indian Insurance

|University Insurance versus Indian Insurance – This article states the pros and cons of health insurance purchased from India and US universities|University Insurance versus Indian Insurance

You have really slogged hard for this much awaited opportunity of pursuing your higher studies abroad and now you want to single-mindedly concentrate on your education. Taking a reliable student health insurance policy is an absolute necessity and should be the top priority for international students. Read More

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A new dawn awaits you as fly to your dream study destination — the US! Whether your start is a roller coaster ride or a smooth sail will completely depend on your interaction with the very first person you will meet on arrival.  Well, you don’t have a choice.  Meeting this person, the officer from Customs and Border protection (CBP) is your unavoidable destiny.  This guy is highly skilled and knows his job quite well.  His first and foremost concern is security, and you may need to cool your heels at the airport for a while till he checks your name against many computers.  Try and understand things from immigration officer’s perspective.  For him, you are an alien and all that they trust are your documents.  Make sure that your answers to the questions asked by the immigration officer are in resonance with the ones you affirmed to the US Consular officer.   Read More

culture shock

Culture Shock | How to adjust in a foreign country?

How to adjust in a foreign country? Culture Shock

With its gigantic size, geographical difference, varying climate and eclectic mix of  different ethnicities, USA like India is a  land of diverse cultures. Like any other country, USA too has its unique characteristics which make it exclusively “American”. When a starry-eyed student lands in the US with high hopes for future, the initial flurry of excitement   soon  gives way to the bewilderment of unanticipated cultural shock. Leaving the comfortable settings of the home country can be a stressful experience for many but if one is  forearmed with the wisdom to address cultural shock effectively, his/her  phase of transition can get less intimidating. Culture Shock

Why do international students undergo cultural shock?

Moving to a dissimilar cultural setting can be exhilarating as well as  disconcerting. Everyone reacts differently to the challenging process of cultural adjustment. Whether one’s transition is a smooth sail or a rocky ride will depend on his/her level of preparedness. Social customs, value systems, traditions and prevailing beliefs in the US may be quite different from the ones in India. Depending on their individual background and upbringing, different students will experience singularly unique adjustment curves. While some may find the process unendurably daunting, others may be able to adjust with relative ease.

Different symptoms of culture shock include: Culture Shock

  • Severe homesickness Culture Shock
  • A sense of gloom and melancholy Culture Shock
  • Sleep disorders and physical discomforts Culture Shock
  • Nagging fear and insecurity
  • Fatigue and anxiety
  • Bouts of anger and irritability
  • Strange headaches, allergies, and pain
  • Lack of confidence Culture Shock
  • Regret over your decision to study abroad Culture Shock

Tips to facilitate adjustment process:

1.Respect the other culture:

Try to acclimate to the new customs, beliefs and culture with an unbiased mindset. Rather than being an unyielding conformist, try and enrich your personality by accepting good things about the new country. One of the most significant aspects of cultural adjustment is identifying and shedding your cultural prejudices, and adapting to the new culture.

2. Be flexible and broad-minded

Please understand there is nothing right or wrong, it is only the perception that varies in different countries. Try to be broad-minded, tolerant, and neutral by embracing the new culture, customs and ideologies without prejudices. Adapting to a new culture does not infer that you shift your value system; it only implies that you are prepared to accept and respect the new culture with an open mind.

3. When in Rome do as Romans do

Try and observe others by paying close attention to their body language and communication approaches. This will not only help you in getting acquainted with people but will also help in easing and simplifying your phase of transition.

4. Do your homework well

It is imperative that you gather relevant information on local culture and custom before arriving in the host country. Visit Web sites and read books about the history, geography and customs of the US; study maps; read newspapers with good international news coverage.

5. Understand and accept new Social behaviors and customs

You may not find people in the US to be as warm and friendly as your home country. They may appear to keep a deliberate distance or act formal. Rather than feeling left out, drop your judgments and strive to find common ground.

6. Take care of your physical wellbeing:

Exposure to new environment and unfamiliar weather conditions can have an adverse effect on your health. While maintaining healthy eating habits, make sure you get enough rest.  Relaxation and balanced lifestyle will help you in acclimating faster to the new place.

7. Share your concerns with fellow international students:

Discussing common concerns with fellow students undergoing a similar transition and undergoing a culture shock will provide you with fresh perspectives and different viewpoints to deal with unique issues related to new cultural adjustment.

8. Beat the homesickness:

Keep in touch with your family members through WhatsApp, Skype and Facetime. Dine in an Indian restaurant and make a random visit to your neighborhood grocery store to get a feel of being at home. Remind yourself that homesickness is a “transient emotion” and you are mentally equipped to overcome it.

Adjusting to a new culture may look like a daunting task to begin with, but with perseverance you will become more confident and better equipped to navigate through unfamiliar situations. By observing, understanding and accepting the new surrounding you will gradually develop a sense of belonging and slowly and steadily meld with the new setting.

 

OPT STEM Extension

17 months OPT STEM Extension revoked by Federal Court:

The federal court’s ruling on 12th August, 2015 has put the STEM OPT extension in jeopardy. This judgement has created quite a stir! There is a lot of confusion and bewilderment among the students who have a STEM degree from US Schools and are working on the 12 month OPT. In fact many students who are yet to take admissions in the US schools for the spring/fall 2016 are confused whether they should go to the US and if they do, will they be able to work there after their masters. Through this article we hope to bring some clarity on this matter.

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How to reduce the cost of the masters program

HOW TO REDUCE THE COST OF THE MASTERS PROGRAM

|How to reduce the cost of the masters program – This article discusses ways to cut costs of Ms in USAHow to reduce the cost of the masters program
Have you ever dreamt of going abroad for further studies and then almost instantaneously given up on the idea due to financial concerns? Well, studying abroad does have its fair share of expenses right from the time you set foot on foreign shores! Admission fees, tuition fees, airfares, insurance, food, transport, and accommodation -all these expenses are definitely going to pinch your pocket. But the good news is that studying abroad is not as uneconomical as it seems! Make your distant dream of pursuing further studies abroad a definite reality. Here are some pointers on how to minimise cost while studying abroad.

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First Semester in USA

FIRST SEMESTER IN USA

|First Semester in USA – This article explains how to tackle homesickness while studying in USA|
Everyone expects studying abroad to be an incredibly exciting experience. However one phenomenon that can hamper the entire experience is “homesickness.” Mostly fuelled by the cultural shock, homesickness can be a little daunting to deal with. Here are a few valuable tips, which will help you overcome homesickness with ease. First Semester in USA 

Read More