Different Terminologies Related to the Education Loan Process
As the world has opened doors for students to access global opportunities, overseas education loans have become a vital financial resource for aspiring international students. However, navigating the jargon-filled loan processes can overwhelm anyone. This blog compiles a comprehensive list of different terminologies associated with the education loan process to empower you with the knowledge you need to crack this jargon. So let us dive in.
Collateral Security:
Collateral security refers to an asset the borrower provides, such as properties, fixed deposits, or other valuable assets to secure the loan. This collateral acts as a safety net for the lender if the borrower defaults on the repayments.
Loan Margin:
The loan margin, also known as the “down payment,” is the percentage of the total education expenses the borrower must bear from their funds. Overseas education loans cover the remaining percentage. For instance, if the loan margin is 20%, the lender will finance 80% of the total expenses.
Repayment Tenure:
The repayment tenure denotes the duration the borrower must repay the education loan. This period starts after the course completion, and the loan can be repaid through monthly installments over the stipulated years.
Co-applicant/Co-signer:
In some cases, overseas education loan lenders may require a co-applicant or a co-signer to support the borrower’s application. This individual acts as a guarantor and shares the responsibility of loan repayment in case the primary borrower faces difficulties.
Processing Fee:
The processing fee is a one-time charge paid to the lender for processing and sanctioning the application. This fee may vary and can be either a fixed amount or a percentage of the loan amount.
Moratorium Period:
The moratorium period, also known as the “grace period,” is when the borrower is not required to repay any loan. This period typically spans the course duration and some additional months after completion.
Legal Opinion:
Before disbursing the loan, lenders may seek a legal opinion to ensure the loan agreement complies with all relevant laws and regulations. This step assures both lenders and borrowers.
Valuation Report:
For loans with collateral security, lenders may request a valuation report to assess the market value of the provided assets. This report helps determine the loan amount eligible to be sanctioned.
Final Remark:
Understanding the various terminologies related to the study abroad education loan process is crucial for making informed decisions and securing financial support for international education.
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Are you prepared to pursue your dream of studying abroad? EduLoans offers various options for overseas education loans. Our team is here to guide you through the entire loan process, making it smoother and hassle-free. So don’t let this opportunity slip away. Reach out to us for more information today.