Getting admitted into a renowned foreign university is a dream of many meritorious students to get a high-quality education. For this purpose, one needs finances and proper financial planning and in the case of no scholarships or grants, a student will have to look for an educational loan or family support to fulfil their dream of studying abroad.
Below are ways with which students can manage their finances so that their aspiration to study abroad comes true.
Scholarships and grants: Students must work on acquiring scholarships and grants to which they may be eligible in the universities to which they have applied.
Financial planning: Part of a diligent financial plan is a good loan application designed for optimal costs for funding foreign education. Students must work on finding the right amount of loan by balancing it with redeeming the investments.
Many people do not know the fact that the entire interest component of an education loan is deductible under Income Tax Provisions. This may help in repaying the education loan at a rate of 10-12 per cent interest rather than paying a tax of 30 per cent on the income.
Total outlay: One must look at the total outlay per lakh which could include insurance charges, processing fees, foreign exchange rate, one-time charges, etc., rather than keeping in mind the lower rate of interest.
Loan structure: It is necessary to look into the loan structure which includes the Rate of interest and repayment tenure. Many students think that if they opt for a longer tenure they would have to pay a longer interest which is not the case.
If the student opts for a loan to be repaid in 10 years and later on, opts for paying higher EMIs, the interest component of the EMIs would be reduced and adjusted for the actual time of repayment. Moreover, a lower EMI at the beginning of the career reduces the risk of default.
Other key components: Other key components include foreign exchange rate and insurance coverage which is crucial to compare different service providers to assess the best option.
Processing time: Processing time involved for a loan sanction plays a vital role considering the fact that many universities ask the students to reserve their seats on time. One must have a clear understanding of the process of disbursals as the situation must not happen such that the next term becomes due and the students are in the middle of the assessments and losing the crucial time chasing disbursals.
Try different options: Students should apply to more than one lender as it reduces dependency and uncertainty. In many cases, new-age platforms allow students to get collateral-free loans within 15 days.
Post disbursement support: One must analyze their post disbursement support and service which includes the issuance of interest certificate, prepayment penalties, address change, EMI changes, etc.
Other products offered: One must explore the availability of other products and services provided by the lender such as credit cards, savings bank accounts, investments, remittances and foreign exchange.
Referrals: An easy way to supplement one’s funds is through referrals and therefore, it is necessary to check whether there are any referral schemes being run by the finance partner. Parents and students must start thinking about finances long before applying to a university or for a loan which can be done through investments and smart savings as early as possible