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Education Loan: Frequently Asked Questions

 
 

What are the common issues faced about Education Loans?

Education Loan is a priority sector lending. Most of the banks have education loan programs. However, the common issues faced by most students include:


Which banks should I go to?
 
Why do I have to go to the native bank branch?
 
Check if the community funds are available to support higher education
 
Why do I keep getting requests for more and more supporting documents?
 
Why does it take such a long time to get the education loan approve?

 

Most students and parents want the education loan approval in time. If loan approvals don’t come in time, students risk losing out on the admission or the visa to go abroad.

 
 

Why do I get asked so many questions when I try to get Education Loans?

Education segment is quite complex. There are tens of thousands of colleges and courses. It’s not easy for officers and managers to keep track of educational institutes. There are so many colleges and courses getting added every year. It’s therefore, quite confusing for officers to find out validity of courses, colleges and Universities.

Also, typically education loans are required for colleges which are in cities other than the branch location. It’s therefore, seen as high risk by some officers.

However, some lenders are education loan specialists. Their understanding of the education loan segment is quite high. They use their own databases and knowledge to offer much quicker processing.

 
 

Should I take Education Loan?

It depends on your requirements.  Typically speaking, there are a lot of hidden costs while pursuing higher education e.g. fees for coaching classes, fees for additional entrance exams, fees for some extra courses, additional living expenses like cell phone bills, internet charges, trips to native city or native country, cost of books, laptop computers. In today’s environments, most of colleges typically raise fees every year. In some colleges fees are increasing quite dramatically.

 
 

How will I know how much Education Loan will I get?

The most important thing to remember is to be prepared for education loan well in advance. So, if you have completed all formalities for your admission and waiting for the final admission letter from the college/University, it might be a good idea to start your education loan application process. There is an Education Loan focused lender called Credila Financial Services, which provides education loan application form online at:

http://www.credila.com/apply_for_loan.html

Dear Students, Credila Financial Services, an education loan lender has a series of cartoons related to lives of students. It’s quite funny. Students can even rate those cartoons and also students can win prizes by referring friends to Credila. Rate cartoons, refer friends and win prizes at: www.credila.com/……

 
 

What’s the Processing Fee/Origination Fee for Education Loan?

While processing your education loan form, the lender has to put in a lot of efforts, which include some costs such as:


Which banks should I go to?
 
Title Search Fees
 
Document preparation fees
 
Fees for lawyers
 
Fees for CIBIL report
 
Cost of employment verification
 
Cost for general validation and verification
 
Underwriting costs
 
 

Does your course qualify for a loan?

Banks typically have their own lists of courses, which are eligible for loans. These lists may not be comprehensive for study abroad. Since there are thousands of new courses coming up every year, it gets confusing for officers and managers.

It might be helpful to have an education loan option with a non bank education loan option if you have some questions or are not sure about your course, while you work with banks.

 
 

Is guarantors or collateral required?

Almost every bank requires a cosigner/guarantor for every loan. Parents or relatives typically act as cosigners or guarantors. A guarantor has the responsibility to repay the loan if the student defaults on the loan repayment. Typically, banks look at the employment details and financial details of the in relation to education loan amount.

The usual security that banks accept are Non Agriculture Land, House, Property, Fixed Deposit Receipts, National Savings Certificates (NSCs), bonds, gold, etc.

There are some possibilities in which some specialized lenders like Credila Financial Services might look at education loan applications where the value of the collateral guarantee might be lower than the required loan amount. They have online loan application feature.  Students can at least try that option at

http://www.credila.com/apply_for_loan.html

 
 

Borrower Responsibilities

Golden Rules of Education Loan Management


Being responsible with your credit and your finances saves you money.
 
Know what you owe.
 
Live within your means (to keep your debt level low).
 
Borrow only what you can afford.
 
Maintain a good credit rating.
 
Check your credit report annually.
 
Use credit wisely.
 
Recognize the warning signs of financial difficulty.
 
Know a scam when you see one.
 
Don’t share your credit card details and internet banking passwords with unknown entities
 
Guard against identity theft.
 

Dear Students, Credila Financial Services, an education loan lender has a series of cartoons related to lives of students. It’s quite funny. Students can even rate those cartoons and also students can win prizes by referring friends to Credila. Rate cartoons, refer friends and win prizes at: www.credila.com/……

 
articles by Credila