6 Terms Associated With The Education Loan For Abroad Studies

By Author: james carter
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Education loans help students with money to fund their higher education, and thus, helps them in becoming excellent professionals and achieve success in their trades. Even though education loans have become accessible, many students still don’t have knowledge about the terms associated with education loans. They often search “education loan abroad” or other associated phrases to know about terms related to such loans. In this article, we will shed light on 6 such terms.

1. Eligibility criteria

Lenders will give you an education loan for abroad studies if you clear all their eligibility criteria. These conditions that govern whether or not lenders give an education loan to a student are called eligibility criteria. Some of the most common points in the eligibility criteria for a student to get an education loan abroad are being an Indian citizen, attaining minimum 18 years of age, and possessing a reasonably strong academic record.

2. Co-borrower

Lenders do not give education loans directly to students. They draft the education loan in the name of the student’s co-borrower. A co-borrower is ...
... an adult who repays the education loan if the student defaults on the repayment. A student’s co-borrower can be their father or mother or legal guardian or spouse. A co-borrower is also called a co-signer.

3. Processing charges

Every time a lender processes an education loan for abroad studies, they levy various charges on it. Those charges are pre-processing charges, processing charges, service fees, statement of accounts, and so on. Choose a lender that levies a lesser number of these charges on your education loan. And also keep in mind that you get a loan that has a lesser amount of money charged under the name of these charges.

4. Moratorium period

Lenders do not expect students to repay their education loans as soon as they earn their degrees. They offer a grace period to help students prepare themselves for the responsibility of repaying their education loans. It is called the moratorium period. Usually, a moratorium period lasts up to 1 year from the time the student completes their education, or up to 6 months from the time the student starts working at their first job, whichever happens earlier.

5. Repayment tenure

Most students cannot pay back their loans in one single installment. This is why lenders devise a repayment tenure for the student to repay the education loan gradually. The repayment tenure of education loans taken in India can last as long as 15 years; but not beyond that.

6. Equated Monthly Instalments or EMIs

The small, fixed amount of money that students pay every month to clear off their education loans gradually is called Equated Monthly Instalments or EMIs. Some lenders offer a service called step-up EMIs. Here, the student pays a lesser amount of money as EMI initially, and as they start earning handsomely, the EMI value is increased to help repay the education loan swiftly.

So, these are the 6 terms associated with education loans for abroad studies. We hope that now you have finer knowledge about education loans. All the best!