« on: April 16, 2007, 01:05:00 am »
Almost anyone and everyone who goes for an international MBA uses an educational loan. Here are some facts about educational loans that might be of help.
In India, educational loans are provided by SBI, SBT, Corporate Bank and Vijaya bank. These banks give you a loan up to 15 and in the special cases up to 20 lakhs for a period of a maximum of 8 years after the course.
Some basic things you have to know before hand are that the rate of interest at all these banks are 12.5% (ouch!!) per annum. This rate is compounded semi-annually at Simple interest during the period of study and at compound interest after the course. (I ll leave the mathematics for the comments)
You can take up to 6 months of delay after your course to start repaying the loan. If you do not have a job, then this time is extendable up to 1 year.
All these loans require collateral security deposited at the bank. (documents of house/land/LIC etc) and the loan processing time is 25 days at SBI. So plan accordingly.
Also bear in mind that the American visa consulate looks not only whether you can afford the studies, but also the repayment capacity. So if you are taking a huge loan from India , then the consular would assume that you are returning to India , and hence the repayment capacity of this loan for a person who is earning in Indian Rupees would be quite low. Hence be prepared for questions like 'what your parents do etc.'. These questions are aimed at measuring your repayment capacity. Be careful with what you tell them.
In US, there are several loans that are available and the usual rates are around 8 - 9.5%. These loans mostly require co-signers of American citizens or green card holders. If you have someone like this, then applying to US becomes a better option than India.
A special mention to banks in Singapore: If you have a relative(family members) in Singapore who is a citizen or a Permenant resident, then you can get the person to apply for the loan in your behalf and banks like Citibank can give you a student loan upto 6 times the total monthly gross salary of all the joint applicants. You can rope in upto 4 joint applicants. The rate of interest is 6%. This is by far the lowest I have seen anywhere. So I thought i'd just mention it.
If you have any inputs or questions please feel free to add them as comments.
