New Zealand has a very small population, barely 4.6 million, yet it has many students from foreign countries. It has a large pool of international students, which makes it a favored destination for students wanting to pursue higher education. India has the second-largest pool of students among the international students studying in New Zealand. Indian and international lenders willingly lend for education loans for New Zealand’s universities. The cost of education varies from one university to another. This is something that has to be kept in mind before choosing New Zealand as the place for higher education.
Cost of education in New Zealand
The expenditure incurred on the cost of education has a great deal of variance when it comes to different universities. Some universities have a low fee structure, while others have high fee structures due to their reputation over the years. The fee structure varies from college to course. For some colleges, the fees may be lower for a particular course while it may be high for some other courses. For professional degrees such as MBA, the tuition fee is anywhere between NZD 31,000-50,000. The tuition fee is usually higher for courses like Engineering and Medicine than humanities. However, it’s better to visit the university website for a detailed fee structure for the course of choice.
The cost of education also involves the cost of living, and precisely this is why almost all the lenders provide education loans that include the living cost too. The cost of living in New Zealand for an Indian student is approximately NZD 1000-1200 per month.
Loan options for studying in New Zealand
Students have a lot of options when it comes to taking an education loan for New Zealand. All the leading lenders provide education loans for universities in New Zealand. Both secured and unsecured loans are available to the students, and they can choose what suits them. For secured loans, it’s always advised to go with Public Sector Banks as they provide low-interest rates on loans, the terms of repayment are also conducive to students’ finances, and many other benefits.
Those students who don’t have an asset to back their loan application can approach Private Banks, NBFCs, and International lenders. These institutions are willing to provide unsecured loans with much more value than public sector banks(e.g. SBI gives an unsecured loan of max INR 7.5 lakhs). The processing of loans is also fast with NBFCs and International lenders, but the interest rate is usually high. The loan amount is also less than public sector banks. So for unsecured loans, NBFCs and International lenders are the best possible options, and if not, then one can approach private sector banks.
The right time to approach the lenders for a loan
The first and foremost thing is to secure a seat at a university of choice. After getting a letter of acceptance from the university, the process of loan starts, and then only one can approach the university to complete the admission process. In some countries, the admission and visa process can be done before getting a loan, but in countries like Australia, New Zealand, Canada, etc., the visa process begins after the disbursal of the loan.
The right time to approach a lender is approximately 1-1.5 months prior to the likely date of admission. Since different lending institutions have different timelines for sanctioning a loan, it may take around 15 days to disburse the loan. Also, collecting all the documents and checking for discrepancies can be a bit time-consuming. In general, a public sector bank takes anywhere between 10-15 days for processing the loan. While in the case of private banks, it is around 10 days, and in the case of NBFCs, the time taken is relatively less(approx 5-7 days). But these are not fixed times, and there might be some delays too due to unforeseen reasons.
Many financial services companies are working in the space, and they have direct tie-ups with banks. The banks or, for that matter, any other lender tend to connect with these financial services companies more quickly than an individual borrower. Also, getting help from experts helps better understand the nitty-gritty of the loan as they explain the relevant fine prints that a bank executive might not explain.
Visa and sanction of loan
Getting a study visa for New Zealand consists of getting a loan and showing the liquid funds available for financing the cost of living at the time of the study. So, in a nutshell, a student seeking admission at a university in New Zealand needs to have these two things in order:
- Depositing at least one year of living expenses in a Bank situated in New Zealand.
- The payment of the tuition fees has to be done prior to the visa process.
Getting a loan sanction letter from the bank can also be used as proof of finance for studying in New Zealand. This helps authorities in ascertaining the financial position of a student wanting to study in New Zealand.
Education loan disbursal for studying in New Zealand
Once students get a letter of acceptance from a university, they start the loan application process. This may take a while, but certain expenses have to be paid for securing admission and the visa process. This can be a taxing task for students, so there is a provision to help students with the conditions put forward by foreign governments. The provision is called pre-visa disbursement. It helps students in meeting the payments that a country may prerequisite for applying for the visa. These payments are made to initiate the process of visa application at the embassy.
So, usually, banks don’t make the loan disbursal easily, but in those cases where the foreign government mandates prior payment, the payment is made.
Repayment of education loan
Repayment of education loans is usually not a big deal for students studying at top universities in New Zealand. However, there are certain things that a student may wish to do to ease the burden of loan payment post the completion of the degree. Once a student starts studying at the university, they can work part-time or do a summer internship to earn some amount utilized for loan repayment. Most of the public sector banks don’t penalize prepayment, while NBFCs or international lenders may put some penalty for prepayment.
Also, the moratorium period or the repayment holiday is usually one year for public sector banks and private banks, while for NBFCs, it is anywhere between 3 months to 6 months. The repayment period is also less with NBFCs (around 10 years) while it is around 15 years for public sector banks. Private sector banks have the maximum repayment period, and it can extend up to 20 years. However, a longer repayment period also implies more amount to be paid in interest. For loans of such high value, a longer repayment period may not be the best possible option. So, it’s advised to have a relatively shorter repayment time period.
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