A guide to education loans for a doctoral programme

Essential tips on what students need to know before opting for an education loan to fund their Ph.D

Updated - November 25, 2023 04:41 pm IST

Published - November 25, 2023 02:38 pm IST

A student loan also helps keep the family savings for emergencies.

A student loan also helps keep the family savings for emergencies. | Photo Credit: Freepik

Embarking on a Doctor of Philosophy (Ph.D.) study programme marks the pinnacle of the academic journey for an aspiring scholar. A Ph.D. programme ranges from three to six years, depending on the specialisation and university. Navigating this academic journey involves a judicious choice of institution with a comprehensive curriculum tailored to one’s research focus. However, the pursuit of excellence often comes with financial considerations. Many students opt for education loans to fund their Ph.D. endeavours. Here is some essential information on educational loans for a doctoral programme.

Why take a loan?

An education loan helps cover expenses like tuition fees, travel expenses, accommodation costs, price of learning devices, living costs and other education-related expeneses. This initial foray into borrowing also works to create a positive credit score through repayment. This can help unlock multiple benefits later in life during other financial transactions such as getting a credit card or taking a car or home loan. A student loan also helps keep the family savings for emergencies.

Financial institutions typically offer two categories of education loans: secured (with collateral) and unsecured (without collateral). The collateral can encompass various assets, with residential property and non-agricultural land often being acceptable forms. Irrespective of the type of loan, the financier will thoroughly evaluate the student’s profile to determine employability potential. Therefore, variables will include academic performance, entrance exam scores, university pedigree, continuity in education, and so on.

Eligibility criteria

To qualify for an education loan for a Ph.D. degree programme, certain prerequisites have to be met. First, the student should be an Indian citizen above 18 years of age. Two, he/she must confirm admission to the programme before disbursal. Finally, most institutions mandate a co-borrower who earns within India.

Documents required

Whether abroad or in India, the borrower and co-applicant must provide some essential documents:

For the borrower, the required documents include academic transcripts, proof of admission, the fee structure, valid photo ID, two passport-sized photos, residence proof, proof of date of birth, and a document verifying his/her signature.

The co-applicant has to submit photo ID proof, two passport-sized photos, residence proof, proof of date of birth, and a document verifying his/her signature. Additionally, income proof, such as salary slips or income-tax returns, will have to be submitted. In the case of a secured loan, collateral documents will also be needed.

Before submitting the application, it is better if the student connects with the lender to understand specific requirements and criteria. This can enhance their chances of success. In many cases, the application process is online.

Repayment process

There are a few methods through which the repayment can be done.

One is servicing the interest during the loan period. This involves paying off some portion of the interest during the moratorium period. Remember, the moratorium period offers time but is not interest-free. Therefore, the interest accrued during this time will contribute towards an increased overall repayment expense for the loan. Another benefit of starting repayment early is to develop financially prudent habits.

The second option is the Equated Monthly Instalment (EMI). This is a popular choice and involves making fixed monthly payments, which cover both the principal and the interest.

Once the student understands the basics of education loans, he/she can confidently pursue their doctoral programmes and unlock opportunities for advancement.

The writer is Chief Business Officer-Student Lending and Insurance Business, Avanse Financial Services

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