A whopping number of more than 125,000 Nepali students went abroad in 2022, a stat revealed by ICEF Monitor, suggesting the growing interest among students to consider abroad for their better study, the most popular being Australia, Japan, India, and the United States.
Have you ever thought about what might be the challenging aspect to consider while choosing a foreign as your study destination?
The answer could be different based on individuals like loneliness, cultural differences, different lifestyles, and so on. One answer stands common among all and that is financial challenge.
To ease such hurdles, there are some options available for the student such as scholarships (discussed in the previous blog), securing educational loans, and so on.
Here, we discuss the procedure needed to secure educational loans and ease the pathway to study abroad.
Obtain the Offer Letter:
First thing first. If you are thinking about studying abroad, the first task to do is to obtain an offer letter.
To receive an offer letter from the universities, we need to apply for admission and the documents needed for this are generally transcripts, English proficiency scores, test results (SAT/GRE and so on), Resume, Work Experience, Passport, Application fees, and so on.
Once the application is placed, the admission committee reviews the documents and usually decides within 7 days to 1 month (depending on universities, processing time might change) after receiving all the required documents.
NOC (No Objection Certificate):
Now you have your offer letter in hand. The next important task you need to do is to make NOC.
This is a government-issued certificate and you can visit https://noc.moest.gov.np/ and follow the instructions (usually required to sign up in the portal, upload the documents such as transcripts, and so on) to receive this.
After the verification is done, the students need to pay the fees through either the online portal (esewa) or Rastriya Banijya Bank and must appear in front of an officer with an original transcript at Nepal Education Board (NEB).
After the final verification is done, NOC will be available online to download.
Understanding the Cost:
It is crucial to understand the amount of loans students need to study. The minimum amount corresponds to the total tuition fee for one year along with living expenses that will incur during this period of stay.
Note that the living expenses vary greatly according to the country and the city where the university is located.
So, it is advisable to research the living expenses and know about the tentative loan amount needed. The loan amount will have direct consequences on your visa.
Therefore, consider this section with utmost care, or in case of any confusion, you can reach our experts.
Appointment at any ‘A’ class Bank:
Now the most important task begins. The student along with their parents should make appointments with the branch manager/loan officer of a nearby bank to discuss the possibilities of educational loans.
You must take your offer letter with you to initiate the process. The educational loan requires collateral from the student’s sponsors (usually parents) and the collateral could be any valuable properties (such as land and buildings) deemed suitable by the bank.
After agreeing upon suitable collateral with the loan officer, the bank will verify the worth of it usually by hiring the engineers. The Certified Engineers will visit the site and evaluate the worth of those properties.
Please keep in mind, the cost incurred during this field visit should be paid by the applicant himself. Depending upon the bank, disbursement can be made ranging from 40% to 80% of the total valuation made by the engineers.
Now we know the amount that bank is willing to give us as a loan, the bank requires the applicant (parents who are the owner of that collateral) to sign the terms and conditions of the mortgage, including the amount of loan, the interest rate, repayment schedule, and other relevant terms.
This legal document (called a Mortgage deed) is registered with the government authority (Land Revenue Office) and this document protects the rights of both the borrower and the lender.
After signing the agreement, the Bank will finally issue a sanction letter where the details of the student (name of the university, course name, student ID number) along with sponsors (details of collateral kept for obtaining a loan) are mentioned.
Other relevant terms and conditions are also mentioned in the sanction letter. This is an important document that is assessed by a visa officer and therefore, the student must look at the minor details such as name, address, student ID, etc. on it.
This letter is issued by the bank, once the sanctioned loan amount is disbursed into the applicant’s bank account. But, remember not all countries require the disbursement letter for this visa lodgement.
So, before disbursement, we strongly suggest knowing the visa requirements of respective nations or consult our experts.
This is bank issued letter that shows the transactions conducted by the applicant with the amount and purpose. Once the loan is disbursed, the applicant can ask for the bank statement to show any necessary transactions conducted by him.
In general, if the tuition fees are paid by the disbursed amount, then this document might be highly relevant for visa officers. Again, this is country-specific, and therefore make an informed decision before obtaining a bank statement.
There are costs associated with obtaining an educational loan from ‘A’ certified Bank in Nepal.
It is difficult to generalize the exact amount but the cost is mostly incurred during valuation by Engineers, the Interest rate of the Bank, the Service fee of the Bank, and any administrative costs depending on the bank.
Kindly Note: Every bank has its own loan departments and interest rates. So, to understand the particular processes and costs associated with the bank, kindly visit nearby branches with appointments and discuss the potentiality of securing the loan.
Also, not every bank follows the same procedure and therefore, makes the decision only after visiting the banks.