锘� Everything about the Education Loan to Study in Australia

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Education Loan to study in Australia

Australia encourages innovation, creativity, and independent thinking through its excellent universities. A wide spectrum of international students looks forward to Australia for their higher education.  For those international students who complete their degree in one of the Australian Universities are sure to find themselves as a competitor in today’s international job market.

One of the biggest hurdles international students face for studying in Australia is an arrangement for funds. Not each student who dreams to study in Australia fulfils their dreams, as it is not much affordable.  So in this article, we are going to present you each minute detail of Education Loan to Study in Australia.

How to get the Education Loan to Study in Australia?

International Students planning to study abroad in Australia with the help of an education loan must start their process minimum 6-7 months before their classes begin. You may also choose to start your loan application process with your university admission application. Here are the steps you need to follow for applying for a student loan:

  1. Research about the banks providing international education loans to study abroad in the university in Australia, its eligibility and document requirements.
  2. Estimate the amount you will require for the studies. You should also calculate the loan amount and amount you will finance on your own.
  3. Get a letter of acceptance from the respective university in Australia.
  4. You should compare the different loan options provided by the different banks for covering expenses while studying in Australia and finalize the one which suits your needs.
  5. After deciding the bank and the loan amount, you should fill out the education loan application form.
  6. Submit all the documents such as your  Identification document, birth certificate, salary slip, residency proof etc.
  7. As soon as the bank approves your loan, it will issue a loan agreement that includes various elements of the loan. Read and sign it. 
  8. After signing your loan document, the bank will pay the amount to you as decided.

In the next part of this article, we will discuss the above-mentioned steps in detail. Go through each step thoroughly and take note of the important points, as it is a big decision which will affect your financial life.

Research about the banks and loan options

You should start your process by researching different banks and loan options. But before you research, there are few things you have to take into consideration.

Factors to consider for applying for education loan

Before applying for a student loan to study in Australia, you should have a clear idea about how much money you will require and how much you are going to manage by your fund. Other important factors to consider before applying for the education loan are:

  • Finalize the university you want to study in Australia and the course you want to pursue.
  • Calculate the amount you will require to study abroad in Australia.
  • Enlist all the documents you will require during the application.
  • Be ready with the guarantor or collateral. (as required)
  • Make sure to apply for the international educational loan before the three months of your student visa interview date.
  • Estimate the time of disbursement.

After taking into account the above-mentioned factors, check your eligibility for an education loan to Study in Australia. Here are the criteria:

Eligibility Criteria to apply for international education loan

Before applying, check your eligibility to apply for the education loan to study in colleges in Australia. Different banks have different eligibility criteria. The common eligibility criteria followed by most of the banks are:

  • The applicant must have outstanding academic results.
  • The applicant must have a confirmed seat at the Australian university.
  • The applicant must be enrolled in a course that has been accepted by the funding institution. Generally, job oriented professional degrees, technical degrees, and diploma courses are only accepted.
  • The applicant must be above 18 years of age otherwise his or her parents will have to apply for the loan.

Calculate the amount required to study in Australia

Here you have to estimate the amount you will require to study abroad in Australia. Generally, an education loan to study in Australia covers the total cost of a student’s education in Australia. However, this can vary depending on the chosen institution and study program. While calculating the expenses, you should include the following expenses:

  • Tuition Fee:- The university fee for each academic period.
  • Mandatory Fees:- This involves expenses like student centre fees, student activity fees, recreation fees, residence hall activity fees, new student fees, etc. 
  • Accommodation expenditure:- This expense includes on-campus university housing and the standard price of regular meals. If an international student chooses the option of living off-campus, then the expenses covered will be the rent, utilities and transportation expenses.
  • Purchase of books, stationery and  laptop/computer
  • Travel expenses:- Things like airfare, parking permit, monthly bus/ train pass etc.
  • Other reasonable expenses that would be required to complete the course

Estimating the Cost of studying in Australia is one of the crucial steps. Once you get your final amount, you have to check how much you will be able to pay on your own and how much you will require to take a loan from the bank. The loan sanctioned by a bank would entirely be for educational purposes and not to cover any of the personal expenses.

Letter of acceptance from the university in Australia.

You have to get admission in the University of Australia. You have to show the proof while applying that you are admitted to the Australian University. There are plenty of universities in Australia open for international students. Here are the top universities in Australia:

  1. The Australian National University 
  2. The University of Sydney
  3. The University of Melbourne 
  4. The University of New South Wales (UNSW Sydney) 
  5. The University of Queensland 
  6. Monash University 
  7. The University of Western Australia
  8. The University of Adelaide 
  9. University of Technology Sydney 
  10. University of Wollongong 

Not only the above-mentioned universities, but you also have a spectrum of options in Australia where you can pursue your higher education. You will get full information here: Universities in Australia

Comparison of Education loan options

Now your task is to compare the different loan options provided by the different banks for studying in Australia and choose the one which benefits you the most. Here are the factors on basis of which you can compare the loans options 

  • Interest rate
  • Expenses covered such as tuition fee, books, travel etc.
  • Processing Fee
  • Loan margin
  • Loan duration 
  • Income tax exemptions
  • Loan processing time
  • Prepayment terms
  • Repayment Period

Each factor plays an important role, so decide properly after comparison. If you decide on careful planning and comparing you can save a few dollars. 

International Education Loan application form.

In this step, you will legally start the process of applying. After deciding the bank and amount of loan you will require, you have to fill the loan application form. It can be done online or offline according to the bank. Make sure to fill correct details in it.

In the application form you will have to fill your name, parents name, address, date of birth, age, ID proof, course name, duration of the courses, university name, Income, Liabilities, employment details, type of security, tuition fees, other expenses etc. Fill everything you are asked in the form correctly and recheck it before applying.

Submit the documents

Every loan applicant needs to submit some common and important documents along with the Loan Application Form while applying for an education loan for studying in Australia.  The list of these documents required are listed below:

  • A copy of a valid passport.
  • Academic documents of the student
  • Proof of Admission at the University of Australia. 
  • Documents on the cost of studies
  • Applicant’s latest passport-sized photos
  • Identification proof such as Aadhar Card, Voter’s ID Card, Valid Passport or PAN Card.
  • Proof of Residence. For example Driving License, Aadhar Card, Telephone /Electricity bill.
  • Proof of Age. You can present your Birth Certificate as evidence.
  • Photograph, Residence proof of guarantor
  • Guarantor/ co-borrower/ student's bank statements
  • Guarantor/ co-borrower/ student's statement of assets
  • Guarantor/ co-borrower/ student's proof of income. For example Salary slip.

Other Optional Documents

  • Official Certificate of Minority Caste.
  • Certificates of Extra-curricular activities 
  • Documents regarding any disability or illness

Education loan agreement to study in Australia

As soon as your loan application gets approval from the bank, it will issue a loan document that includes various terms and conditions of the loan along with the basic details. It includes the borrower name, agreed loan amount, the period of repayment, interest rate, the signature of both the parties, collateral security etc. Read the terms and condition properly and then sign it.

Disbursement of education Loan Amount

After signing your loan document, the bank will pay the amount to you in instalments or lump sum as per your and university requirement. It will also be mentioned in your loan agreement. Once you receive your amount, spend on the necessary expenses such as tuition fee, books and supplies, accommodation etc. Don’t waste your money on the non-essential expenses. 

Security for the international education loan.

Generally, banks do not ask for collateral security for loans which include less amount. However, for a high amount of loans, most banks require collateral in the form of a satisfactory third party guarantee.

What is Collateral?

Any property either movable or an immovable, which can be kept as a security in the bank for an education loan is collateral.  Most of the banks demand collateral as security to reduce the risk involved in paying off the credit.

Instruments used as collateral: 

  • Land/building. For example house, commercial place.
  • Government Securities and public sector bonds
  • LIC policy, gold, shares, debentures,
  • Fixed deposits in the name of the student, parent/guardian with a suitable margin.

There are some of the important things bank inspect before granting loan:

  • The repayment capacity of the student's parents/family/Sponsor.
  • The representative of the bank will verify your property used for collateral and prepare a report.
  • Additionally, the value of Collateral Security is calculated. Banks usually get the valuation of the collateral done from an approved Valuator only then process the loan application.

Repayment of Education Loan to Study in Australia

The loans taken to study in Australia are to be paid in instalments, as decided in the loan agreement. Pay the instalments on time with the agreed amount. Make sure you do not delay in paying the instalments.

The loan can be repaid within a period of 10 -20 years after taking the loan. The repayment period starts from 4- 12 months after the end of the course. Moratorium time varies with different loans providing banks. 

You should also read these articles:
Best courses to study in Australia to Get a Good Job
How to Choose the Right Program to Study in Australia?
Admission Requirements for Australian Universities

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