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Finance is, perhaps, one of the most important elements to consider while planning to pursue a management programme, given the high cost. However, the presence of various options, most popular of which is an education loan, has helped ease the process of studying in the most sought after business schools across the country. Banking and financial companies are, in fact, taking it a step further by collaborating with institutions to smoothen the education loan process. For instance, HDFC Credila, one of the widely known loan disbursement organisations in India, has collaborated with NMAT by GMAC- a national level MBA entrance test conducted by the Graduate Management Admission Council- to offer customised loan services to test takers.
In an interview with Careers360, Chandini Sehgal, Head- Marketing & Channels, Credila shares the nitty gritties of availing education loan through HDFC Credila. Sehgal also shares the criteria and procedure to be followed in order to be eligible for loan.
Read the excerpts of the interview below.
Careers360: HDFC Credila is one of the well-known agencies for education loan. What are the criteria which have to be fulfilled by the applicants?
Chandini Sehgal: The borrower and co-borrower(s) must be Indian citizens. Both must meet Credila’s credit and underwriting norms, which evaluates the application holistically. Multiple parameters get evaluated which include, but is not limited to, academic background of the student, co-borrower, collateral security offered, course, college and university selected for higher education etc.
Careers360: What kinds of programmes and institutes do you cover in India and abroad?
Chandini Sehgal: Credila takes a holistic call based on the overall candidate profile, when the student or the parent applies for education loan. Each country has its educational system and university structure. There are universities and institutes which are fully or partially funded by various Government of semi government agencies, but even they have many components where fees and expenses are chargeable to students. Typically, each university has multiple courses offered by various ‘Schools’ or ‘Departments’ at each university. In many cases, they have lots of operational autonomy. Other than sharing the same university or the same Institute, these courses and schools have their own nuances. It is, therefore, important for Credila to evaluate each case separately. Till date, Credila has funded students studying over 1000 courses in more than 2100 Institutes across 35 different countries.
Careers360: Credila would be collaborating with NMAT by GMAC test to offer exclusive product for the students taking the exam. Please share some details about it.
Chandini Sehgal: This is first of a kind partnership between the loan provider and management entrance test conducting body in India. Over 45 per cent of the NMAT by GMAC test takers have expressed interest in availing education loan to fund their management education. This association will help test takers to focus on taking the exam and take help of Credila to finance their MBA aspiration. This will also help NMAT by GMAC accepting institutions to select candidates through NMAT by GMAC score without worrying about providing education loan solutions to their prospective students.
As a part of this collaboration, MBA aspirants taking the test will have the liberty to fund their education with Credila customising their loan package at reasonable interest rates. Students can also avail tax benefits under Section 80 E of the Income Tax Act. Credila will also refund the fee paid to register for the exam.
Careers360: Which stream of education do you receive maximum loan applications for?
Chandini Sehgal: Credila receives applications for a variety of courses. We have funded courses ranging from MBA, M.Tech, MS, MMS to PGDBM; numerous undergraduate courses and are now witnessing a surge in unconventional and unique courses like Bachelor Of Arts-Sports Management, Bachelor Of Media Arts-Commercial Music, Bachelor and Masters Of Physiotherapy, Bachelor Of Science-Music, Sports Events Management, etc.
Careers360: Please mention the ratio of national and international institute/programme applications?
Chandini Sehgal: Credila is popular for its education loan offering for programmes in both India and overseas. The ratio is about 50:50. For studies abroad, the cost of education is comparatively higher. Therefore, a large percentage of students planning their education abroad require education loans. However, for studies in India, depending on fees and cost of education, not every student requires education loan.
Careers360: What are the ROI factors of an institute which you assess before sanctioning a loan and how do you gauge it?
Chandini Sehgal: There are many parameters and dynamic factors which affect credit analysis of education loans. There are over 650 universities and over 30,000 educational institutes in India. Each institute offers courses, which present varied employment opportunities to students. Accreditation is assigned at the course level. Within the same university, various institutes might have different accreditations. In addition to this, different credit variables need to be applied when reviewing for a loan for studies overseas, too. Depending on the country of study, laws related to international students, immigration policies, state of the economy at the time of graduation, employment opportunities of the industries are taken into consideration. While evaluating education loan application, multiple parameters get evaluated which includes but not limited to academic background of the student, co-borrower, collateral security offered, course, college and university selected for higher education etc. Credila doesn’t have one fixed interest rates fits all kind of an approach. Depending on the holistic credit evaluation of each education loan application, loan approval decided.
Careers360: What are the eligible expenses covered through the education loans offered by Credila?
Chandini Sehgal: Credila's Education Loan covers up to 100 per cent of the cost of attendance, including tuition fees, living expenses and other expenses like books, laptop, mobile tools, cost of travelling, etc. Credila has no upper cap on the quantum of loan it can sanction and does not take margin money either. The loans are structured in easy EMIs making it convenient for students to pay back the education loan.
Careers360: What is the procedure to apply for loan?
Chandini Sehgal: Credila has a student friendly education loan application process and offers a simple convenient and quick service with the facility to apply online. Post this, Credila offers door step service to clear queries and pick-up documents.
Careers360: What are the points which a student should keep in mind while applying for loan?
Chandini Sehgal: The education loan product must be thoroughly evaluated on multiple parameters to choose the one best suitable for you. Cost of attendance is rising. It is, therefore, important to see that the education loan covers the entire cost of attendance and not just tuition fees. Most students end up spending lots of money for entrance test preparations, application process related expenses etc. It is also important to find a lender which does not require any margin money. Also, it is critical to find a gazetted lender to ensure that the interest paid on education loan can qualify for Income Tax deduction. Long tenured education loan results in lower EMIs, thus reducing the burden on students. The ease of applying and processing the application is an important one. It is quite a delight for the applicants when education loan is literally ‘home-delivered’ to them. It is also good for students to evaluate the online web support during the repayment period.
Stay tuned to bschool.careers360.com for more updates on MBA education loan.
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Following overall minimum percentile in the CAT 2018/ XAT 2019/GMAT entrance exam should be scored by the applicants to get shortlisted for the final admission process by TAPMI Manipal. These TAPMI Manipal cutoff 2019 are applicable for the candidates with less than 24 months of Work experience.
For the candidates with work experience of two years or more TAPMI follows a Profile-Based Shortlisting. Following are the parameters for shortlisting:
Students will be informed on the shortlist decision through email / SMS to their registered email id and mobile number.
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