It has been a while since I wrote here.
I’d just finished my 2-week vacation and perhaps, this happens to be the most productive. I’ve completed the paperwork for the education loan and the change of address (in passport).
For international students, it’s almost impossible to find a loan in Canada, presently. One needs to posses a permanent resident-ship status, or at least have a Canadian Citizen willing to cosign the loan. Ivey does recommend international students to arrange for the funds in their home countries.
Having thoroughly researched various processes of banks, and compared the rates of interest and the guarantor requirements, I’ve decided to avail the loan from Corporation Bank of India. These Interest rates are decided by the Banks themselves, based on various factors recommended by Reserve Bank of India such as the Cash Reserve Ratio. Each Bank has its own prime lending rate (technically they call it BPLR or Benchmark Prime Lending rate) and the interest rate is arrived at using the BPLR(+ or -), which changes from time to time. At present, Canara Bank offers for the least interest rate (11% p.a.). However, they do need a guarantor who can cosign the loan, in addition to pledging a collateral security. Guarantor is required to be a working member and some banks do insist that guarantor be creditworthy (at least equal to the loan amount). On the other hand, Corporation Bank offers at 11.5% p.a. and there is no guarantor requirement. As long as one can manage the collateral, he is eligible to apply for the education loan. In my case, I’ve decided to pledge my Father’s house that is expected to have a value at least twice as that of the loan amount. He would also act as the guarantor.
Submitting the application papers was not as easy as I had originally expected. It took me almost 2.5 hours to fill in just the application form. Found things tough when gathering support documentation, especially the ones that involved Government Officials for documents such as the certificate of encumbrance. Managed to complete my part (paper work) within 2 working days. Thanks to my Father who had been organizing and archiving all sorts of papers from land documents to electricity bills. Bank authorities were more than helpful and patient enough to answer my concerns and queries.
Typically, the following documents are required to apply for an education loan in India:
1. Completed Loan Application Form
2. Address proof (Ration Card, Bank statements, Telephone Bills should do)
3. Proof of Date of Birth.
4. Degree certificates, transcripts and mark sheets (Class X, Class XII, Graduate Degree)
5. Proof of occupation of Parent/ pension certificates; Guarantor’s proof of income (salary slip or pension statements if retired)
6. Copy of passport and driving license
7. Passport sized photos
8. GMAT score report
9. Admission letter from University
10. Cost of Study/living expenses. Preferably an official letter.
11. Proof of funds for the remainder of expenses requirement (the amount that is not fulfilled by the loan). This amount is termed as “Margin”. If the cost of program+ living expenses is Rs. 45 Lakhs, and the loan applied for is Rs. 20 Lakhs, then margin is Rs. 25 Lakhs. This proof may be in terms of savings, investments/bonds, loan from Family/friends/employer, etc.
12. Employment contract, if any,
13. One would also need to state the expected income/expenditure statement, post-MBA. This is essential to calculate the percentage of EMI to repayment ability.
14. Proof of collateral securities. In case of house property, following are needed:
The application is currently under progress. I expect receiving the sanction letter as soon as the bank receives reports from the property valuation team, and the advocate for legal opinion. Things are looking positive at this time.
I’d just finished my 2-week vacation and perhaps, this happens to be the most productive. I’ve completed the paperwork for the education loan and the change of address (in passport).
For international students, it’s almost impossible to find a loan in Canada, presently. One needs to posses a permanent resident-ship status, or at least have a Canadian Citizen willing to cosign the loan. Ivey does recommend international students to arrange for the funds in their home countries.
Having thoroughly researched various processes of banks, and compared the rates of interest and the guarantor requirements, I’ve decided to avail the loan from Corporation Bank of India. These Interest rates are decided by the Banks themselves, based on various factors recommended by Reserve Bank of India such as the Cash Reserve Ratio. Each Bank has its own prime lending rate (technically they call it BPLR or Benchmark Prime Lending rate) and the interest rate is arrived at using the BPLR(+ or -), which changes from time to time. At present, Canara Bank offers for the least interest rate (11% p.a.). However, they do need a guarantor who can cosign the loan, in addition to pledging a collateral security. Guarantor is required to be a working member and some banks do insist that guarantor be creditworthy (at least equal to the loan amount). On the other hand, Corporation Bank offers at 11.5% p.a. and there is no guarantor requirement. As long as one can manage the collateral, he is eligible to apply for the education loan. In my case, I’ve decided to pledge my Father’s house that is expected to have a value at least twice as that of the loan amount. He would also act as the guarantor.
Submitting the application papers was not as easy as I had originally expected. It took me almost 2.5 hours to fill in just the application form. Found things tough when gathering support documentation, especially the ones that involved Government Officials for documents such as the certificate of encumbrance. Managed to complete my part (paper work) within 2 working days. Thanks to my Father who had been organizing and archiving all sorts of papers from land documents to electricity bills. Bank authorities were more than helpful and patient enough to answer my concerns and queries.
Typically, the following documents are required to apply for an education loan in India:
1. Completed Loan Application Form
2. Address proof (Ration Card, Bank statements, Telephone Bills should do)
3. Proof of Date of Birth.
4. Degree certificates, transcripts and mark sheets (Class X, Class XII, Graduate Degree)
5. Proof of occupation of Parent/ pension certificates; Guarantor’s proof of income (salary slip or pension statements if retired)
6. Copy of passport and driving license
7. Passport sized photos
8. GMAT score report
9. Admission letter from University
10. Cost of Study/living expenses. Preferably an official letter.
11. Proof of funds for the remainder of expenses requirement (the amount that is not fulfilled by the loan). This amount is termed as “Margin”. If the cost of program+ living expenses is Rs. 45 Lakhs, and the loan applied for is Rs. 20 Lakhs, then margin is Rs. 25 Lakhs. This proof may be in terms of savings, investments/bonds, loan from Family/friends/employer, etc.
12. Employment contract, if any,
13. One would also need to state the expected income/expenditure statement, post-MBA. This is essential to calculate the percentage of EMI to repayment ability.
14. Proof of collateral securities. In case of house property, following are needed:
- Land/House documents
- Parent document of the land/house, if possible
- Certificate of encumbrance on property (from date of purchase till date)
- Plan approvals by Government
- Property tax, Water, Electricity bills/receipts
- Re-conveyance certificate (this is required if there had been any previous loans on the same collateral)
- Past legal opinions, if any.
The application is currently under progress. I expect receiving the sanction letter as soon as the bank receives reports from the property valuation team, and the advocate for legal opinion. Things are looking positive at this time.
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