ABOUT EDUCATION LOAN

● Education loan has been the most procrastinated thing that students do.
● Students always rely on their parents, especially their dad, to get this sorted.
● Then what does your parents do? They go to a nearby branch where they have their
savings account and apply for Education loan. Parents for the sake of Child’s future
pledge their property to get the loan sanctioned.
● Even if the Rate of Interest is high people go for it, without checking the details about
the loans.
● Guys, please don’t do that. Get to know about the Education loan which you’re
applying. Don’t just rely on one source.
● Just tell me one thing how do you shop online? Do you just check on one platform,
no...we check multiple platforms like Amazon, Flipkart, Myntra etc etc to name a few.
● We at Yocket have tie ups with multiple loan providers, which include Banks, NBFC’s
and Other Pvt Lenders. With Banks we have SBI & AXIS Bank, with NBFC we’ve
tie-ups with HDFC Credila, InCred & Avanse & with Other Pvt Lenders we’ve Prodigy
Finance & MPower Finance. You must’ve heard about Prodigy Finance in our
previous Webinars held by us.
● Most of the students don’t know if non-collateral or the other term to it, which is,
unsecured loan exists. As the study abroad Education Loan are almost equivalent to
Home loans there are Loan providers who on the basis of your profile can grant you
a non-collateral loans upto your required amount, be you go anywhere like USA,
Canada, Germany, Ireland, Australia.
● Education Loan has some terms attached to it, which I would be discussing in this
webinar. Obviously they are not Rocket science but are easy to understand and thus
you will be capable to examine the loan product well. So be responsible guys...You’re
taking a giant step towards your career, you can’t remain blind towards this detail of
financing your Education and leave this responsibility to your parents.

COST OF EDUCATION LOAN

● Across the timeline of studying abroad there’s a common topic of discussion among
students & their parents saying that Education in the USA is expensive. I would say
that just don’t go by what others say and would tell you to do your own diligence
towards the actual requirement and not just rely on the whole no. which is displayed.
● Some people even drop their plans of studying abroad due to the no.s. And they
don’t do the research which needs to be done. Don’t do that, look out for how much
is the requirement by the University and then you’ve to break down accordingly.
● As most of you belong to USA for the country of study, on an average for the Masters
student to graduate there is a credit system which exists and generally it goes from
30 to 39 credits.
 ● Each subject has 3 credits and you’re studying 10 to 12 subjects that means on
average ballpark we can take it as 33 credits to complete your masters. So each
credit costs anywhere between 500$ to 2500$ and if you take the average then we
would conclude at 1500$. So to sum up all this we can deduce all this at 50K$ and
cost of living generally goes at 500$ per month on a sharing basis. So summing up
both the tuition fees and living expenses would go in the range of 60000 to 65000$
for total completion of masters, if you would plan it out wisely. There are students
who even have compressed this amount.
● So from this you must have calculated the whole expenses which would range to 45
to 50 lacs of rupees for Masters Education.
● Now I will tell you how to reduce this amount furthermore,
● You are allowed to work for On-Campus jobs part time 20 hrs per week. Wherein you
can utilize that for your living expenses and also save the rest later for next semester.
● Plus you can also lookout for research assistantship which would further reduce the
cost of loans.
● If you are eligible for scholarships then nothing better than that, part of your fee or
your entire fee can be waived off under that. Scholarships and Financial Aid can
make your MS studies cheaper.
● If your parents are in Higher Income bracket then you can get funds through them.
But I will tell you one secret which might help you to opt for loans instead of going for
self funding. You are logically eligible for Interest Free loans, so stay tune till the end.
I’ll be discussing that part when I come to part of all Loan terms.

Types of Education Loans

Education loans are categorized in two types:

1. Secured Loans | Collateral Loans
2. UnSecured Loans | Non-collateral Loans

1. Secured Loans are the Loans wherein you’ve to mortgage your property, which
can be a House property, or shop property or Land which should be a N.A Land (Non
Agricultural Land) or you can also pledge your Fixed deposits. The value of the
collateral can be less than, equal to or more than the loan amount, but generally
more the property valuation better the chances of getting a high sanctioned amount.
Before applying for an education loan, you must analyze and compare education
loan products offered by various financial institutions since each financial institution
has its own set of terms and requirements when it comes to collateral. Secured loans
are generally provided by Banks be it PSU or Private.

2. Un-Secured Loans
 Un-secured loans are the loans where in there is no requirement of pledging the
mortgage property. Unsecured loans are especially beneficial for students who are
unable to offer collateral but have an extraordinary academic track record. Students
with confirmed admission in a top ranking university can also get unsecured loans
since their employment probability and loan-repaying capability is enhanced.
Moreover, students whose co-borrowers have a good credit score, stable income and
clean financial reputation may get eligible for Non collateral loan.

Factors associated to approval of Non-collateral loan:

a. Past Academic Profile - If your past academic scores are good then that
would help a lot.
b. GRE score- This is the most important factor for any loan provider to grant
you an unsecured loan. It even is the most important thing to get an Admit
from your desired University.
c. TOEFL / IELTS score -
d. University - This is helpful for providers to decide the Rate of Interest, which
means better the University, lower would be the Rate of Interest. So this
another important thing to consider.
e. Course - Generally non-collateral loans are given to STEM courses wherein
the job prospects for these courses are good and thus getting an unsecured
loan is easy.
f. Parents / Coborrower Financial Background - This depends upon the Credit
score of the parents / coborrower / guarantors.

TYPES OF LENDERS

Basically there are three types of Lenders, those are

1. Banks - For banks we at Yocket have tie-ups with SBI i.e. State Bank of India
& AXIS Bank
2. NBFCs (Non Banking Financial Companies) - For NBFCs we have tie-ups
with HDFC Credila, InCred & Avanse.
3. Other Pvt Lenders - For Other Private lenders we have Prodigy Finance &
MPower Finance

1. State Bank of India - They generally provide you with Collateral & Cosigners based
loans.
2. Axis Bank - Cosigners is compulsory with Axis Bank, but you can avail Collateral or
non-collateral loan too
3. HDFC Credila - Cosigner is needed here too. But you can avail both collateral or
non-collateral loan
4. InCred & Avanse - Same as HDFC Credila
5. Prodigy Finance - They can provide you with non-collateral & non-co borrower loan.
6. MPower Finance - It's the same as Prodigy finance
WHEN TO APPLY FOR LOANS

This is the most important question where you've to deeply think about, but you end up
believing words of people who don’t have knowledge about it. So please don’t do it,
Why...because

Firstly, I would speak of the advantages of applying for loans early

Advantages of early application -
1. When there is fund assurance the chances for getting admission to your dream
university increases.
2. Allows you to know your loan eligibility in advance.
3. The most preferred way to declare 'Assured Funds to Universities'
4. Loan Sanction letter has better acceptance over the solvency letter.
5. Assures no last minute issues especially during Visa / fee payment time.
6. You can even get a better deal with Rate of Interest if you apply early.
7. You can apply for multiple loan providers and also compare the quotes from them.

Now coming to the disadvantages for applying late:

Disadvantages of applying late -
1. Last minute rejection can be a cause of worry. Students have deferred their
admission due to this.
2. Last minute hassle while Visa interview. As during Visa Interview you’ve
3. You aren’t able to negotiate the ROI and Processing fees.
4. As you don’t have the liberty of time, there are only limited options left and you thus
can’t check quotes with multiple providers.

So now coming to the next part, When to start for loans?

You should start for loans when you’re done with your University Applications. Because
that’s the time you actually know the true cost of fees required for that particular University.
Also while applying to Universities you would be more busy with the applications, SOPs,
LORs, & that won’t be the right time to start for the loans. So once you’re done with your
University Applications you can start for loans.

There are NBFCs which Yocket have good tie-ups with & with whom you can check your
quotes through them. These are HDFC Credila, InCred & Avanse. We also are associated
with International lenders such as Prodigy Finance & MPower Finance. So all these which
I’m telling you are the providers with whom you can start your loan process even before your
admits. As discussed in advantages about why to start early, there you go. Generally all
these loan providers have a TAT (Turn around time) of 5 to 10 days. So once the loan is
sanctioned & when you obtain your loan sanction letter then that can be helpful to obtain
your i20 form easily. This would also be helpful while you go for Visa Interview and mind it
this is equally important to lookout for.
Students Timeline of studying abroad-
1. You complete your Bachelor’s Degree with flying colours from a reputed college in
your Hometown.
2. Then you dream of doing your Master’s abroad and in the meanwhile you also take
up a job related to your field.
3. Then you start researching about Master’s Education.
4. Then you prepare for the necessary tests i.e. GRE / GMAT, TOEFL / IELTS and takes
the necessary ones.
5. You then apply to the Universities for the desired course and then wait for the admits.
6. You then apply for an Education Loan or go via Self Funding.
7. You receive Admits from one or many Universities which you’ve applied to and then
make an informed decision finalize the desired University.
8. For the I20 you’ve to show the source of funds to fulfill the cost of Education, this
includes Tuition fees and Cost of living.
9. You then book your Visa date and go for Visa Interview and thus your Visa is
approved
10. You fly abroad for your Master’s study.
11. You then complete your Master’s and find a suitable job.
12. Your Education Loan repayment starts 6 months after course completion, thus you
start repaying your loan.
13. You can even prepay your loan earlier without any extra prepayment charges.

LOAN TERMS

1. Rate of Interest (ROI) - This is the most important function of any loan. Lower the
ROI lower is the cost of loans, Higher the ROI higher the amount would be repaying.
All Education loans are calculated on simple interest only and never on compound
interest. Secured Loans generally have lower ROI whereas Unsecured loans have
Higher ROI. If you apply for loans via Yocket you can even check your EMI which
you’ll need to pay. You can also find many loan calculators if you search on Google.

2. Processing Fees - This is the amount charged by the lender towards processing the
loan file. This generally range from 1 to 2% of the total loan amount, additionally GST
of 18% is added to it. Once your loan is sanctioned you’ve to pay Processing fees to
obtain your Loan sanction letter.

3. Moratorium - A moratorium is a delay / suspension / relaxation of time period

allowed to students for completing their Education and then securing a job to repay
those loans.
4. Prepayment Fee - As the name suggests, prepayment charges are the charges
additionally incurred on loans when you repay your loans earlier than your stipulated
term. There are no Pre-payment charges for repayment of Education Loans.
5. Expenses covered - Expenses such as Basic Tuition fees, Housing, Food,
Insurance & Books are covered into the loan amount granted. Some providers can
even cover your Flight expenses.
6. Co Signer | Coborrower - Co Borrower is compulsory if you’re getting your Loan
from an Indian Loan Provider. This is because there has to be someone who is not
leaving the country after taking loan, so here comes the co-borrower who is held
responsible for the loans just in case if there is a default while loan repayment.
7. Tax Benefits - Generally most Banks give you tax benefit under section 80(E). In tax
benefit under sec 80(E) your interest paid towards loan can be used as an exemption
of Income Tax. This exemption of Interest paid can be used for 8 long years.
Providers like SBI, Axis Bank & HDFC Credila provide you this Benefit. The rest
others (InCred & Avanse) provide you tax benefit under sec 80(C). Tax benefit under
this scheme has an upper limit of 1.5 lacs only.
8. Simple Interest / Partial Interest Payment - This is the payment which you’ve to
make while your moratorium period is going on. This goes around 1% of the
disbursed loan amount for e.g. SBI have this feature of Simple interest wherein they
ask for you to pay 1% of the disbursed loan amount. Other providers would also
tweak this process depending upon the financial capability of the cosigner.
9. Margin Money - The margin is the amount you need to pay from your own funds,
while the rest is paid by the bank. For e.g. SBI bank demands 10 to 20% as Margin
money from the borrowers.
10. CIBIL Score - CIBIL Score is a three-digit numeric summary of your credit history.
The score is derived using the credit history found in the CIBIL Report (also known
as CIR i.e Credit Information Report). A CIR is an individual's credit payment history
across loan types and credit institutions over a period of time. The score goes in the
spread of 300 to 900 and to qualify for loans your score have to be beyond 750.
11. Turn Around Time (TAT) - This is the total time taken to evaluate the documents and
Accept/Reject the loan. For this Banks generally take more time to evaluate the case,
because they mostly require Collateral to be attached and the valuation of Collateral
property takes time. Banks take around 15 to 20 days to sanction the loan. NBFCs
take 5 to 7 days, whereas International Lenders would require 2 to 7 days. These
days depend upon the submission of all the required documents.
12. Repayment term - Repayment term is the whole period allotted to the borrower to
repay all his dues to the provider.
 Why Yocket for Loans? Yocket Traditional way

Complete Online / on-call process Yes No

Apply to Multiple Providers Yes No

Follow Ups with Lenders Yes No

Time Saving Yes No

Free Loan Assistance Yes No

ROI & PF Negotiation Yes No

Highly Trained & Dedicated Loan Advisers Yes No

Faster TAT & Quick Loan approval Yes No

Refinance, Balance Transfer & Reimbursement Yes No

Complete Loan Product Yes No

Loan Terms, Ready Reckoner explanation, Yocket vs traditional way of getting Education
Loan